6 September East and North Hertfordshire NHS Trust Our Changing Hospitals Phase 4 Outline Business Case

Transcription

1 East and North Hertfordshire NHS Trust Our Changing Hospitals Phase 4 Outline Business Case Version September 2010

2 Contents 1 Executive Summary Introduction Strategic context Objectives, benefit criteria and constraints Options The preferred option Implications of preferred option Management arrangements Introduction Background and context Approach to the OBC Structure of the OBC Timetable for approvals Strategic Context Introduction East and North Hertfordshire NHS Trust Strategy for healthcare in Hertfordshire Demand and activity assumptions Objectives and Benefit Criteria Objectives Benefit Criteria Constraints Options The Long List of Options Shortlisting the Options Benefits (non-financial) appraisal of shortlisted options Financial appraisal of shortlisted options Overall conclusion of option appraisal Affordability of the Scheme Introduction Current performance Affordability of Options 3 and Detailed affordability of Option Preferred Option Model of care Design of preferred option Transition plan Enabling works Non-clinical support services Workforce Implications Approach to workforce modelling Assumptions used Workforce requirements Implications Estate Considerations Estates Strategy Equipment Strategy Site management plan Planning permission Design Review Panel and Design Champion Information Technology Implications... 97

3 10.1 Introduction Current Position Proposed way forward Management Arrangements Programme and Project Governance Procurement Strategy Benefits Realisation Risk Management Stakeholder Involvement Patient Experience List of Tables Table 1: Impact of variables /14 (excludes Mount Vernon)... 3 Table 2: Forecast capacity required... 3 Table 3: Benefit criteria... 5 Table 4: Shortlisted options... 5 Table 5: Summary of option appraisal results... 7 Table 6: Impact on I&E - summary... 8 Table 7: Breakdown of I&E implications and capital expenditure by project... 9 Table 8: Summary of Long Term Financial Model Outputs... 9 Table 9: Return on investment position... 9 Table 10: Workforce implications Table 11: Timetable for approvals Table 12: Objectives of the local health economy Table 13: Demand assumptions Table 14: Performance assumptions Table 15: Impact of variables /14 (excludes Mount Vernon) Table 16: Forecast bed capacity required Table 17: Forecast bed capacity by specialty Table 18: Forecast theatre capacity required Table 19: Required capacity: sensitivity to base demand Table 20: Required capacity: sensitivity to Length of Stay (LoS) Table 21: Sensitivity to Surgicentre transfers Table 22: Sensitivity to catchment changes non-elective Table 23: Sensitivity to catchment changes elective Table 24: Sensitivity to changes in occupancy Table 25: Sensitivity to changes in impact of demand management schemes Table 26: Benefit criteria and weightings Table 27: Long list of options Table 28: Strengths and weaknesses of longlisted options Table 29: Result of shortlisting assessment Table 30: Shortlisted options Table 31: Raw scores Table 32: Weighted scores Table 33: Inputs to GEM Table 34: Calculation of Trust baseline revenue costs for GEM Table 35: Summary of revenue cost changes for each option... 44

4 Table 36: Optimism bias of short-listed options Table 37: Capital costs for short-listed options Table 38: Equivalent capital costs for the GEM Table 39: Option risks Table 40: Evaluation Results Table 41: Sensitivities Table 42: Summary of option appraisal results Table 43: Summary revenue costs of Option Table 44: Ten year LTFM key outputs under Option Table 45: Option 4 Elements of the Financial Risk Rating Table 46: Summary Revenue costs of Option Table 47: Ten year LTFM key outputs under Option Table 48 : Option 3 Elements of the Financial Risk Rating Table 49: Cost Improvement Programme 2009/ / Table 50: Option 3 - Changes to I&E Table 51: Option 3 - Assumptions used in calculating changes in I&E Table 52: Option 3 - Allocation of I&E changes across individual schemes Table 53: Cashflow projections for 2010/ / Table 54: Impact of increased capital costs on the LTFM Table 55: Impact of reduced savings on the LTFM Table 56: Impact of MRI and CT relocating to QEII on the LTFM Table 57: Capital Expenditure Programme 2009/ / Table 58: Return on investment position Table 59: Clinical benefits from new model of care Table 60: BREEAM scores and ratings Table 61: Bed demand and capacity 2010/ Table 62: Bed demand and capacity 2011/12 post Surgicentre and maternity consolidation 74 Table 63: Bed demand and capacity end of 2012/13 in preparation for emergency department consolidation Table 64: Bed demand and capacity 2013/ Table 65: Summary of enabling works Table 66: Support services plans Table 67: Derivation of baseline for workforce modelling Table 68: Workforce implications Table 69: Backlog maintenance current ( 000) Table 70: Backlog maintenance 2009/10 to 2013/14 ( 000) (Indexed up by 3% pa) Table 71: Equipment allowances for projects Table 72: Key personnel Table 73: Projects within Phase Table 74: Procurement options Table 75: Procurement packages - Procure 21 or normal tendering Table 76: Resource requirements for procurement Table 77: Benefits Realisation plan Table 78: Risk categories and examples Table 79: Key risks and mitigating actions (2 September 2010) Table 80: Examples of stakeholder involvement activities

5 1 Executive Summary 1.1 Introduction East and North Hertfordshire NHS Trust is one of two acute trusts in Hertfordshire. We provide secondary and limited tertiary care services from four sites: The Lister Hospital Stevenage The Queen Elizabeth II (QEII) Hospital in Welwyn Garden City Hertford County Hospital in Hertford Mount Vernon Cancer Centre Northwood Middlesex We provide acute care services to a population of around 600,000 from the first three. Mount Vernon is one of the country s leading cancer treatment centres, serving a population of some two million. In 2007, a service reconfiguration strategy called Delivering Quality Healthcare for Hertfordshire (DQHH) was agreed by all parts of the local health community. East and North Hertfordshire NHS Trust is progressing its element of the DQHH strategy in a programme known as Our Changing Hospitals (OCH). At its heart is the consolidation of acute services on the Lister Hospital site in Stevenage. The economic downturn and revised NHS Hertfordshire (PCT) spending plans have resulted in significant work between the Trust and NHS Hertfordshire to agree jointly the activity and planning assumptions necessary to achieve the consolidation of acute services and the extensive clinical and quality improvements this drives. The election of a Coalition Government in May 2010 and the subsequent review of all service reconfigurations in the NHS has resulted in NHS Hertfordshire looking to commission enhanced services from the Local General Hospital in Welwyn Garden City. In late August we were informed of the emerging commissioning intention to provide endoscopy services from the LGH and the proposal to provide CT and MRI scanning at the site. Further work is required in a joint piece of work to determine the clinical and financial feasibility of CT/MRI provision at the new QEII. This piece of work will be completed during September. We have factored this proposal into the sensitivity analysis (table 53). The first three phases of the OCH programme are well advanced, and will deliver an independent sector treatment centre (the Surgicentre), a new maternity unit, and additional car parking on the Lister site during This document sets out the Outline Business Case for the fourth and final phase of Our Changing Hospitals, which enables the full consolidation of all acute inpatient services onto the Lister site in early Strategic context Fit with local and national policy The business case has been planned in close collaboration with local commissioners and within the framework of commissioning intentions and the DQHH strategy. As a result, we can say with confidence that: 1

6 Planned facilities are linked to decisions about primary and community care services and that the consolidation plans reflect the Our Health, Our Care, Our Say, White Paper Investment is compatible with a future in which, where safe and appropriate to do so, resources and services will move closer to home into primary care and community settings with increasing health system investment focussing on prevention This scheme is consistent with the reforms and changes required to meet the actions outlined in NHS from Good to Great The investment is consistent with Towards the best together with complex care centralised This is also consistent with the NHS next stage review The investment reflects the importance of integration of health and social care Plans can accommodate changing service requirements as set out within the sensitivity analysis (section 4) Fit with Trust strategy The Our Changing Hospitals programme (of which this business case is a cornerstone) is at the heart of our strategy. It addresses a number of clinical and financial challenges: allowing us to achieve best clinical practice and improve outcomes and productivity across the organisation providing the means for our response to the challenging economic conditions forecast for the NHS through enabling quality improvements alongside increased productivity (QIPP Quality Innovation Productivity and Prevention) 2 creating a critical mass of clinical and specialist staff to allow us to sustain a wider range of high quality services than would otherwise be possible and introduce new technologies enabling us to maintain viable 24/7 medical staffing rotas for all our services facilitating the modernisation of our facilities, improving our ability to attract patients through choice improve the experience of patients and their relatives who access the services we provide improving our ability to attract and retain high quality staff and allow us to prepare for a future in which more acute care is provided in the community enabling reductions in estate and related costs from the reshaping of the QEII site, to offset the income loss and support the revenue consequences of the capital investment on the Lister site Activity assumptions We have used the activity model originally developed for the DQHH business case as the foundation for our demand assumptions. It allows us to predict the impact of demographic changes in our catchment area, including the changes to our catchment area as well as the potential impact of demand management initiatives. It also allows us to test the impact of improvements in productivity and performance relating to length of stay, day case shifts, bed occupancy, and theatre utilisation. The model predicts inpatient beds, theatres and endoscopy rooms, changes to the capacity required have occurred with each refresh of the

7 model. Based on the activity model, informed by the PCT commissioning intentions we are confident that the provision will be adequate and enable some flexibility. The model predictions will remain under review by clinical teams. Applying these assumptions to our 2009/10 baseline activity, results in the following forecasts of demand for 2013/14. Table 1: Impact of variables /14 (excludes Mount Vernon) Impact item In patient ICU/HDU Endo Spells IP beds Theatres OBDs* beds** rooms Baseline activity 2010/11 83, , Demand factors/ Population changes 5,062 21, Work going to Surgicentre (10,183) (6,889) (0.2) (22) (5.6) (0.1) Catchment effect of no ED at (2,287) (8,796) (0.9) (28) (0.1) (0.0) QEII *** Demand management (11,573) (33,130) (3.6) (107) (2.2) (0.6) Performance factors Length of stay reductions 0 (40,550) 0 (132) Shift to day cases 0 (815) 0 (3) Occupancy reduction from 93.6% to 84.6% Total effect (18,981) (68,892) (3.0) (134) (7.1) (0.6) Net result 64, , *OBDs: occupied bed days **Excludes NCU/SCBU beds ***Assumes QEII ED closes end of May 2013 Inpatient beds for 2009/10 reflect current 94% occupancy rates. The table below summarises forecast capacity requirements for 2013/14 (the agreed planning year for Phase 4), and then onwards to Table 2: Forecast capacity required Year Inpatient Beds ITU/HDU Beds Day Surgery In-patient Theatres Other Theatres Endoscopy rooms 2010/ / / / Bed occupancy rates 94% in 2009/10 and 85% in 2013/14 As a result of our demand and performance modelling, and the sensitivity tests we have carried out, we have reached the following conclusions as to the capacity which should be provided on the Lister site. We will provide 602 inpatient beds (15 more than derived in the model to allow sensible design of wards). This will be sufficient to meet demand based on joint assumptions of activity and challenging benchmarked efficiency performance. We will provide 20 critical care beds. This will be sufficient to meet demand in nearly all the scenarios tested with the additional provision of the medical HDU beds in the new ward block. 3

8 The capacity requirements are sensitive to achievement of target lengths of stay. We have set challenging targets which place the Trust in upper quartile of performance. We are confident in our ability to meet the targets. If targets are not met in some areas, the additional bed-days will be accommodated by temporarily raising occupancy from the planned level of 85%. We are conscious of the risk inherent in some of our assumptions, particularly in that relating to the ability of the health community as a whole to deliver demand management. We will therefore set aside space equivalent to one ward of 30 beds so that it can be swiftly re-commissioned if these assumptions are shown to be overoptimistic. Any further significant increases in activity in the longer term would be managed by commissioning temporary wards. We will provide nine inpatient theatres. Our sensitivity tests indicate that this is the appropriate number in all reasonable scenarios. If activity increases we will extend operating sessions from eight to ten hours and consider Saturday working. We will provide two day surgery theatres, operating two sessions per day, and with some Saturday working. This will be sufficient to meet demand based on reasonable assumptions. If activity exceeds this capacity we will extend the sessions. There will be four endoscopy rooms. With the additional provision at the new QEII LGH we are confident this is adequate. If activity increases significantly we will extend sessions from eight to ten hours and consider weekend working. 1.3 Objectives, benefit criteria and constraints Objectives for the Phase 4 investment have been set with regard to our overall business objectives, the agreed strategy for healthcare in Hertfordshire, and the anticipated levels of demand for acute healthcare. They are as follows: To allow us to achieve best clinical practice and improve outcomes and productivity across the organisation. To create a critical mass of clinical and specialist staff to allow us to develop a wider range of services and introduce new technologies. To enable us to maintain viable 24/7 staffing rotas for all our services. To facilitate the modernisation of our facilities, improving their attractiveness to patients exercising choice as well as the working environment. To improve our ability to attract and retain high quality staff and allow us to prepare for a future in which more acute care is provided in the community. To enable reductions in estate and related costs from the reconfiguration of the QEII site, to offset the income loss and fund the necessary investment in new facilities on the Lister site To achieve all the above within available capital and revenue resources. The benefit criteria which we have used to evaluate options are identical to those initially established for the DQHH programme. The weightings used are the same as those agreed in that original exercise, and were set through an inclusive process involving clinical and nonclinical stakeholders from across the health community. This approach underlines the consistency of the Our Changing Hospitals Phase 4 analysis with the over-arching priorities of the health community. The benefit criteria, and their relative weightings, are as follows. 4

9 Table 3: Benefit criteria Criterion Weight (%) Quality of care 32 Accessibility 15 Sustainability 10 Feasibility and capacity 7 Quality of the physical environment 9 Deliverability 12 Human Resources 15 Total 100 The options were evaluated within the context of clear constraints. These were: The Trust could only borrow a further 60m for Phase 4 and still remain within its Tier 1 PBL. To maintain the Trust s income and expenditure position the programme must deliver savings over and above the loss of income and the additional costs of the investment. The programme must reflect the revised strategic commissioning intention of NHS Hertfordshire, as outlined in their revised commissioning intentions. 1.4 Options Options considered Options for the way forward to deliver the objectives of Phase 4 were discussed during the Strategic Review process in a series of meetings with a wide range of stakeholders. A long list of options was generated, which included a do nothing and a do minimum option, options exploring variations of a hot/cold split between the Lister and QEII sites, and options considered different implementation paths towards full consolidation on the Lister. The long list of options was considered in light of the investment objectives and the benefit criteria. As a result, a shortlist of four options was generated. These are shown below. Table 4: Shortlisted options Shortlisted Key features of option options Option 1: Do Nothing (benchmark) ED not consolidated and duplicated services on both sites Option 2: Do minimum (benchmark) Option 3: Consolidation at Lister with two new builds (two stages) Leave services as they are with maternity, Surgicentre and car park at Lister More split site working with Surgicentre Consolidation of Emergency Department (ED) Variations of hot/cold split, and split of medicine and surgery but surgery on both sites and some medicine as insufficient beds at Lister. Critical care insufficient at Lister and over capacity at QEII Movement of some services off site Refurbishment and movement of departments to maximise use of site Consolidation of gynaecology simultaneously with maternity Consolidation of ED and medicine at Lister Consolidation of surgery Leaves an area for future development 5

10 Shortlisted options Option 4: Consolidation at Lister with one new build (one stage) Key features of option New build containing all services required for consolidation Reduces all the moves required to enable areas to be refurbished Services can transfer in as soon as completed, minimal transitional planning Will require relocation of paeds and cath lab for the duration of the build No area near main ward block available for future development Non-financial (benefits) appraisal of options A benefits appraisal of these options was carried out with stakeholders. Options were scored against the criteria, and the scores were then weighted to give total weighted benefits scores. On this basis, Option 4 was the best way forward, with a score 19% higher than that of Option 3 (the second best option). Both Options 3 and 4 are substantially better than the two benchmark options. The rationale for this scoring is broadly as follows. Option 1 fails to meet the investment objectives and scores poorly against all criteria except Deliverability. Option 2 scores lower than Option 1 on nearly all criteria. Although it would consolidate ED and improve the physical environment to some extent, the continued use of two sites and the split of services across them would exacerbate current problems rather than solve them. In particular, there would be increasing numbers of patient and staff transfers between sites, impacting upon quality of care and patient experience. Options 3 and 4 both score highly, and both deliver all the investment objectives. Option 4 generally scores higher because it is likely to have a higher proportion of new build facilities rather than refurbishment. Scores for Deliverability and Human Resources are similar for the two options, because while Option 4 may be a simpler and less disruptive programme, Option 3 enables consolidation of services in a shorter timescale, and retains more scope for future flexibility On the basis of the benefit appraisal above, it was decided to use Option 1 (Do nothing) as the appropriate benchmark comparator in the financial appraisal. Option 2 scored less well in benefit terms and would be more costly, so it was excluded at this stage Financial (economic) appraisal of options All current guidance was followed in constructing the financial and economic appraisal, principally the Capital Investment Manual (CIM) and the Green Book. The DH Generic Economic Model (GEM) has been used to develop the economic appraisal of each option; optimism bias has been assessed and risk has been quantified. The options were evaluated over a 60 year period and Net Present Values and Costs (NPVs and NPCs) calculated. This analysis showed that the most financially advantageous option is Option 3, as a result of the same level of savings being identified in Options 3 and 4 (although the savings in option 4 will be delayed as a result of the longer construction period), with Option 3 having lower capital and lifecycle costs. The additional capital costs are offset by the level of net savings generated from consolidating services on to one site. 6

11 1.4.4 Conclusion of option appraisal The table below brings together the results of the non-financial and economic appraisals, including a cost per benefit point calculation for each option. Table 5: Summary of option appraisal results Option 1 (Do Nothing) Option 3 two stage Option 4 one stage Non-financial Scores 1,327 2,549 3,045 Total Net Present Costs (inc. Risk) 5,876,284 5,673,553 5,726,460 Cost Per Benefit Point 4,428 2,226 1,881 The appraisal shows that Options 3 and 4 are substantially better value than Option 1. On a cost per benefit point basis option 4 would the preferred option. However, affordability analysis shows that, in the current challenging economic climate, Option 4 is not affordable to the Trust nor to the local health system, and therefore cannot be delivered. Option 3 meets all the investment objectives, and provides a similar level of benefits to Option 4 at an affordable cost. It is therefore concluded that Option 3 is the preferred option. 1.5 The preferred option The preferred option is for a two-stage reconfiguration of the Lister site to accommodate all inpatient and necessary support services by 2013/14, with provision for appropriate support services off site. This option represents the best balance of benefit, cost and risk as demonstrated in the previous section. It comprises: A new ward block containing o 14 assessment trolley spaces o 62 beds (coronary care, medical HDU, medical assessment and medical beds) A new theatre and endoscopy block containing 2 day surgery theatres, 2 inpatient laminar flow theatres and 4 endoscopy rooms A new extension to the emergency department containing an 8 bed clinical decision unit, a CT scanner, an upgraded paediatric area and the Urgent Care function In addition: The tower block will be refurbished to provide 51 additional beds (plus space for 30 beds as a decant facility) The critical care unit will be increased from 12 to 20 beds The mortuary will be increased in capacity Health records and pathology will be relocated to off-site premises 7

12 The proposed site plan is shown below. Figure 1: Site plan Phase 4. September 2013 Endoscopy, DSU and Theatres Phase 2 November 2011 Maternity and Neonatal Phase 4 August 2013 Chemotherapy Phase 4. Tower Refurbishment Critical care July 2012 Ward 11a October 2011 Ward 7A April 2012 Ward 10a February 2014 Phase 3 Summer 2011 Car Park Phase 4 February 2013 New Ward Block Phase 4 May 2013 A&E Phase 4 December 2012 Ultrasound Phase 1 April 2011 Lister SurgiCentre The development is a combination of new build elements and substantial refurbishment, and requires a robust implementation programme. A clear and detailed implementation pathway to successful delivery has been developed, which identifies the impact of the changes on every element of the hospitals operation and sets out a transition plan to ensure that services are sustained throughout the programme period. 1.6 Implications of preferred option Financial implications Revenue affordability The affordability of the preferred option has been assessed. For the purposes of this analysis it has been assumed that the scheme is financed by a combination of Interest Bearing Debt (IBD) and internally generated cash and then written off over the life of the facilities. It delivers a financial gain to the Trust of 6.8 million per annum (after capital charges) as a result of an 71.5 million investment. The changes to income and expenditure as a result of the scheme are summarised below. Table 6: Impact on I&E - summary '000 Total Loss of income (5,045) Total Savings 17,424 Total Additional Costs (1,807) Impact on EBITDA of investment (Year 1) 10,572 Total Additional Capital Charges and Interest (3,698) Impact on Income and Expenditure (Year 1) 6,874 8

13 The breakdown of income and expenditure changes and the relevant outturn capital costs is as follows. Table 7: Breakdown of I&E implications and capital expenditure by project Scheme A&E Ward Block Theatres Pathology Therapies Wards ICU Medical Records '000 '000 '000 '000 '000 '000 '000 '000 '000 Capital Expenditure 19,104 20,099 18,664 2, ,458 2, ,541 Change in income (477) (3,541) (1,000) (27) 0 (5,045) Change in Expenditure 1,068 2,567 7,383 1, (560) (148) ,919 Impact on I&E 591 (974) 6,383 1, (560) (175) 122 6,874 Total These changes are reflected in the Trust s 10 year financial plan as follows. Table 8: Summary of Long Term Financial Model Outputs Mar-11 Mar - 12 Mar - 13 Mar - 14 Mar - 15 Mar - 16 Mar - 17 Mar - 18 Mar - 19 Mar - 20 Operating Income m Operating Expenses m (315) (302) (291) (280) (275) (278) (283) (288) (293) (297) EBITDA m Non Operating Income m Non Operating Expenses m (12) (13) (14) (39) (16) (16) (16) (16) (17) (17) Surplus/(Deficit) m (18) Surplus/(Deficit) exc. Impairments etc m Loan Repayments m (2) (3) (3) (4) (4) (4) (4) (4) (4) (4) Year End Cash Balance m FRR Strategic CapEx inc Maternity m All Loans Outstanding m (23) (47) (72) (69) (66) (63) (59) (56) (53) (50) PBL Tier 1 TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE TRUE Max liability to remain within Tier 1 PBL m (93) (70) (69) (65) ISTC Transitional Relief Profile m The Trust maintains a net normalised surplus until the consolidation is finalised. The normalised surplus in 2013/14 adjusts the position for an impairment of 22.8 million. The actual I&E position reflects a deficit in 2013/14 of 18 million. However the impairment loss is not expected to count against the Trust s break even duty. The plan reflects a consistent financial risk rating of 3 by between 2010/11 and 2014/15, increasing to a financial risk rating of 4 on final consolidation. Capital affordability The proposed scheme is assumed to be funded from IBD. The scheme will significantly reduce the level of backlog maintenance within the Trust; however it is clear that it will not address these issues entirely. It is also anticipated that the current inpatient theatres on the Lister site will need to be replaced within ten years of the Phase 4 development being complete. It is assumed that the proceeds from the QEII disposal, the cash generated from increasing surpluses and further loans will be used to fund this. Return on investment analysis Our analysis shows that the preferred option gives a return on investment of 16.4% per annum. This is illustrated in the table below. Table 9: Return on investment position Investment m Capital cost (before VAT) 60.9 Non recurrent 3.5 Total investment 64.4 Savings 10.6 Economic return on investment 16.4% 9

14 We have carried out sensitivity analyses on all our assumptions and have shown that the proposed solution is financially robust Workforce implications The planned workforce for 2013/14, using the assumptions set out above, is shown in the table below. These figures reflect both the changes listed above and other minor changes not covered in the commentary. Table 10: Workforce implications Staff Group (wtes) Revised Plan Difference Baseline* Actual % Consultants % Other Medical Staff % Nursing & Midwifery. Qualified 1,225 1, % Nursing & Midwifery. Non Qualified % Sci. Thera & Tech % Other Clinical Staff % Non Clinical Staff % Total 4,250 3, % * The revised baseline is 2009/10 less the impact of OCH Phases 1 and 3, and CIPs in the LTFM The implications of the preferred option for training, development, employment and engagement have been considered and reflected in our People Strategy and workforce plan Estates implications The Trust s estates strategy was updated in 2010 and this business case is fully consistent with it. In addition to consolidating acute services and increasing capacity on the Lister site, there are a number of other issues which drive our estates strategy. We perform well in terms of space efficiency measured in terms of income, activity and asset value per m² occupied. However, backlog maintenance is an area of concern, along with energy and utility costs. This is significantly addressed by the proposals in this business case, bringing the total value of backlog maintenance down from 39.3m to 19.6m in 2013/14. The development will be progressed in line with our Carbon and Energy Strategy which estimates that Trust carbon emissions will reduce by 14% upon installation of the CHP. The CHP will deliver in excess of the 2015 requirement and it is anticipated that significant further improvements will be achieved through site consolidation and the carbon reduction schemes identified within the 5 year carbon reduction strategy November The consolidation of acute services is estimate to reduce the Trust s water consumption by 32% by Whilst consolidation of acute services is estimated to deliver in excess of the 2013 required reduction it is anticipated that the 10 year water reduction strategy will identify further improvements to the Trust s water consumption. 10

15 A detailed Site Management Plan has been developed to ensure the smooth coordination of all works and minimum disruption to services on site throughout the building period. Outline planning approval for the site wide proposals was secured in July Information technology will be an integral part of all developments, maintaining wireless hubs in clinical and non clinical areas. Cat 5e will be installed in all new builds and be consistent with existing cabling. 1.7 Management arrangements The complexity and scale of the Phase 4 programme demands a reporting and management structure which Ensures transparency of decision making and accountability Is integrated within the overall DQHH and Our Changing Hospitals programmes Allows for flexibility and responsiveness within individual projects, while maintaining rigorous overall project control. The programme structure which oversees Phase 4 is illustrated below. The Phase 4 Programme Board focuses upon delivery of the programme overall. The individual Project Boards focus on their assigned service areas, together with critical paths to implementation and necessary transition planning. Figure 2: Programme structure Overview and Scrutiny Committee (HCC) DQHH Programme Implementation Board Trust Board PCT Board OCH Programme Board Finance and Performance Committee Phase 4 Programme Board Emergency Care Project Board Theatre Project Board Health Records Project Board Therapies Project Board ICU Wards Project Board Enabling Works Project Board Pathology Project Board A Risk Potential Assessment has been completed and a Gateway Review was carried out in October It concluded that the scheme should have a Delivery Confidence status of Amber/Red. This was primarily due to the fact that agreement on future activity levels is outwith the direct control of the Trust and accordingly the resolution of this issue was seen to introduce significant risk to the achievement of the necessary timetable for the approval. The Gateway team concluded that if this key issue were to be resolved then there were many factors in place that would support confidence in delivery of the Programme. Since the 11

16 Gateway review the Trust has been heavily engaged with NHS Hertfordshire on this issue and our assumptions are entirely consistent with PCT QIPP plans and commissioning intentions. We have a procurement strategy which outlines how we will move forward on each of the projects within the programme. We have developed a benefits realisation plan which is regularly monitored to ensure that all necessary action is being taken to deliver the benefits of the scheme. As would be expected for a project of this size and nature, a number of risks have been identified, some rated as high. We have a comprehensive Risk Management Plan and risk management processes to ensure that every risk has a mitigation strategy agreed, is monitored and managed, and that the programme overall is not significantly impacted. As Phase 4 has developed we have invited members of the public and/or patients, Foundation Trust members/governors and stakeholders to contribute to the Programme. Open communication, and involvement of people living in the communities we serve, is a key part of our vision and values. We will also undertake a rolling programme of community updates to engage the public, general practitioners and other stakeholders in the development of the Lister as the future acute hospital for East and North Hertfordshire. All project boards are led by clinicians and have a membership representative of the staff groups involved. There are named staff side representatives on each project board, as well as on the Programme Board. There are regular meetings between the executive directors and staff side, in addition to OCH being a standing agenda item at Trust Partnership meetings. Where there are groups of staff impacted by change joint management and union meetings are scheduled. For all staff there are regular state of the nation briefings conducted by the chief executive outlining the development plans. These meetings are well attended and copies of the presentation are published on the intranet. The intranet also includes a page dedicated to OCH which contains regular updates and progress reports on the schemes. 12

17 2 Introduction 2.1 Background and context East and North Hertfordshire NHS Trust is one of two acute trusts in Hertfordshire. We provide services primarily to the population of East and North Hertfordshire, Stevenage, Welwyn Garden City and Hatfield, from two hospitals: the Lister in Stevenage and the Queen Elizabeth II (QEII) in Welwyn Garden City. Hertford County Hospital provides outpatient based services and Mount Vernon Hospital in Northwood provides cancer services through a network approach. In 2007, after substantial public consultation, a service reconfiguration strategy called Delivering Quality Healthcare for Hertfordshire (DQHH) was agreed by all parts of the local health community. It has been accepted by the local community and Hertfordshire County Council s Overview and Scrutiny Committee (OSC), and commands widespread support from clinicians in both primary and secondary care. The DQHH strategy is now being taken forward under the auspices of the DQHH Programme Implementation Board (which includes representation from all the Hertfordshire acute trusts, NHS Hertfordshire (from 1 April 2010) and the SHA). East and North Hertfordshire NHS Trust is progressing its element of the DQHH strategy in a programme known as Our Changing Hospitals (OCH). At its heart is the consolidation of acute services on the Lister Hospital site in Stevenage. The first three phases of this programme are well advanced, and will deliver an independent sector treatment centre (the Surgicentre), a new maternity unit, and additional car parking on the Lister site during This document sets out the Outline Business Case (OBC) for the fourth and final phase of Our Changing Hospitals, which enables the full consolidation of all acute inpatient services onto the Lister site by the end of 2013 The Phase 4 business case forms our response to the challenging economic conditions faced in delivering a consolidated acute service at the Lister hospital. The programme of works will result in less acute activity overall carried out by the Trust, thus enabling the activity shift to primary care as planned within DQHH. As was the case throughout the original DQHH consultation, clinical engagement and leadership of the programme has been a key feature. 2.2 Approach to the OBC Relationship to Delivering Quality Healthcare for Hertfordshire (DQHH) The business case for Delivering Quality Healthcare for Hertfordshire (DQHH), which represents the strategic framework for Our Changing Hospitals and for this OBC, was consulted on and approved by the Trust and the health community in It set out a programme for consolidation of all acute services at the Lister site by The programme was planned to be in five phases. Phases 1-3 delivered a Surgicentre, maternity unit and car parking. Phase 4 allowed for the consolidation of the Emergency Department (ED) and specialised surgery in November 2011, partially addressing the problems of dual site working. Full consolidation would not be achieved until Phase 5 in 2015, which comprised a new ward, theatre and critical care block probably to be funded through a Private Finance Initiative (PFI) scheme. 13

18 Since the approval of DQHH, three significant factors have arisen in the environment to which we must respond: Demand for acute care has risen faster than anticipated in the DQHH forecasts, because demand management initiatives such as admission prevention and intermediate care have not developed at the rate outlined in DQHH. This is being addressed to reverse the national trend of increasing demand for acute care. New NHS commitments on infection control and same sex accommodation have changed a number of key design assumptions. In early February 2009 we were advised by the SHA and the Department of Health of the uncertainty surrounding PFI funding and approvals nationally. This OBC builds upon DQHH, and delivers its objectives. It responds to the three factors above in the following ways. Activity forecasts The comprehensive activity model (developed by Tribal Consulting) used for the DQHH business case has been adopted as the foundation for this OBC. However, in agreement with commissioners, it has been updated to reflect the 2009/10 activity and revised commissioning intentions. The performance assumptions within the model have been tested by comparison with current performance and are felt to be realistic. Informed by benchmarking data, the model has been used to test a number of demand and performance scenarios, to ensure that the capacity proposed in this OBC is appropriate and flexible to respond to different futures. We know we must strike a balance between providing adequate capacity to meet potential future needs, and avoiding over-provision of an unaffordable infrastructure. We believe that the facilities proposed in this OBC achieve this balance and have the flexibility to respond to different future scenarios. The detail of this analysis is set out in section 3.4. Design assumptions All new Lister Hospital facilities will be designed with patient privacy and dignity at their forefront, with single sex separation and private facilities for individual patients as laid out within the guidance Eliminating Mixed Sex Accommodation 1 and the Institute for Innovation and Improvement Checklist 2. All inpatient wards will have single sex bays and single sex toilets and bathrooms. Patients will not have to pass through opposite sex areas to reach their own facilities. Our designs and layouts for areas that are being refurbished have been achieved within the constraints of the existing infrastructure. Where significant derogations exist these have been subject to discussion and clinical engagement (from the Trust, NHS Hertfordshire and SHA) at a clinical workshop. The workshop participants supported our approach and plans. 1 Chief Nursing Officer and Director General NHS Finance Performance and Operations Letter, May Privacy and dignity, the elimination of mixed sex accommodation, good practice guidance and self assessment checklist, Institute for innovation and improvement

19 The admission units will be capable of delivering segregation for patients at all appropriate times recognising that in some emergencies (such as with access to critical care beds), mixing of the sexes can be justified in the patient s clinical interests. Additionally, Infection Control in the Built Environment 3 will be followed to ensure that the principles underpinning infection prevention and achieving designed-in infection control are adopted. This guidance will inform planning and design, and maintenance teams and infection control staff working on the new build and refurbishment projects. These design assumptions have been used within the outline project designs and capital costings presented in Section 6. Phasing of the development In light of the uncertainty over PFI funding, a Strategic Review was carried out between February and April 2009 to establish the feasibility of consolidation on the Lister site without dependence on a PFI scheme. The review confirmed that clinically safe and sustainable services can be delivered, in a shorter timeframe than that set out in DQHH (by early 2014), with no recourse to PFI. In order to realise its significant clinical benefits, the scheme must be delivered as early as possible. This has been a consistent focus of the programme to date. The revised plan represents the investment required to achieve the essential consolidation of services. It inevitably includes some compromises from the ideal (for example, retention rather than replacement of existing theatres; and a small number of sub-optimal layouts and some service fragmentation). It does however represent the best balance of quality, cost, and delivery given the constraints of the scheme 4. The consolidation is essential to maintain viable clinical services, and our senior clinicians are satisfied and remain clear that the priority must be to deliver safe, sustainable services. In future years we will be able to continue to invest in infrastructure and address the main deficiencies (including improving theatres, paediatric wards and main tower block wards). Phase 4 of the Our Changing Hospitals programme forms the basis of this OBC. It is consistent with the DQHH strategy, and delivers all the acute hospital DQHH objectives, within a shorter timeframe and without requiring PFI involvement. NHS Hertfordshire has been fully engaged in the development of the OBC, approving the models of care, patient experience aspects, and activity and financial assumptions through a series of workshops. Scope of the OBC The consolidation of services that takes place in Phase 4 requires a complex programme of work involving the majority of departments in the two existing hospitals. This OBC strikes a balance between the need to maintain a strategic overview of the development, and the need to ensure that each individual element of work is progressed to an appropriate level of detail. 3 Infection Control in the Built Environment A schedule of all the areas where the proposed design represents a derogation from HBN standards is attached at Appendix 8 15

20 The programme option appraisal reflects the most appropriate options for each project within the overall framework. Once the OBC is approved, Full Business Cases (FBCs) will be produced for each of the constituent projects within the overall programme. Where the capital costs of these schemes are within delegated limits, FBCs will follow an internal approval route; this will be linked to draw-down of an SHA-approved loan. An Our Changing Hospitals Programme Board has been established with strong executive leadership and membership. This oversees the work of the Phase 4 Programme Board, which in turn oversees the work of individual project boards for each element of work, and ensures that interdependences are addressed and coordinated (this is described in more detail in Section 11). Each Project Team is developing the business case for a distinct service area reflecting key patient pathways, as follows: Emergency care (including ED, UCC, wards, radiology and fracture clinic) ICU and wards (including Critical Care) Theatres and Endoscopy Medical Records Pathology (including mortuary) Therapies (a separate project as these are PCT-provided services located on the Lister site. The transfer of outpatient services to the community is complete and the internal changes at the Lister were also completed during May 2010). In addition, project management arrangements have been established to plan enabling works, comprising any department or area that needs to vacate to enable space for other developments. This project team co-ordinate the planning of those schemes not listed above that require additional space or relocation to deliver future services. A comprehensive stock take has been carried out to ensure that every relevant element of the hospitals operation is encompassed within one of the projects above, including the provision of effective operational services during the transition years prior to consolidation. Each project has clear objectives, and clear capital parameters within which to work. Initial capital envelopes were defined as a result of analysis carried out in the Strategic Review, benchmarked against previous DQHH estimates, local knowledge of past projects, and developments elsewhere (for example, the West Hertfordshire Hospitals NHS Trust AAU). These parameters have been kept under review by the Phase 4 Programme Board as the projects have progressed, and in some cases have been adjusted between projects to reflect emerging knowledge of requirements. A change control process has been implemented to ensure effective programme management. This is described in detail in Section Structure of the OBC The main body of this document sets out the OBC for Phase 4 at programme level (following the guidance established in the Capital Investment Manual 5 ). It intentionally limits the level of detail in each section to that required for an understanding of the overall programme. In addition to this OBC, detailed business cases have been developed for each of the individual projects described above. These are available as separate documents. 5 NHS Executive, 1994 Capital Investment Manual (Business Case Guide) HSMO 16