NWSCCG HQ, 58 Church Street, Weybridge, Surrey KT13 8DP Date: 14th September Procurement Services (ICES)

Transcription

1 Agenda Item: 14. Report Number: GB Venue: NWSCCG HQ, 58 Church Street, Weybridge, Surrey KT13 8DP Date: 14th September 2015 Meeting: Governing Body North West Surrey CCG Governing Body Title of Report Purpose of the report Re-procurement in Surrey Integrated Community Equipment Procurement Services (ICES) This report is on the agenda for the Governing Body in order to ratify a decision made by the CCG to participate in the reprocurement in Surrey Integrated Community Equipment Procurement Services (ICES) in accordance with Clause of the CCGs constitution, Reason for presentation to the Governing Body For Information For Discussion For Decision To ratify decision Describe A request to agree to participation in the procurement of integrated Community Services Equipment Prepared and Presented by: Relative Legislation & Source Documents: Tim Cowles, Surrey County Council Procurement legislation and guidance applies:- Care Act 2014 Freedom of Restricted Open

2 Information: This report has previously been presented to the following Committee/Group/s (please state date) Clinical Executive Operational Leadership Team Audit and Risk Committee Quality Committee Contracts and Finance Committee Remuneration and Nominations Committee The outcome of previous presentation/s or reviews This item has been discussed and agreed in accordance with Clause of the CCG constitution Executive Summary The Integrated Community Equipment Service (ICES) was established in Surrey in 2003 following recommendations from The Audit Commission Report, Fully Equipped (2002), with a pooled fund. The contract, and its re-procurement, is managed by Surrey County Council on behalf of all commissioners. The service is jointly funded via Clinical Commissioning Groups (CCGs) and social care on a 50/50 basis. The contract is currently providing around 85,000 pieces of equipment to 26,000 people per year. This represents an increase in demand from the original agreed joint budget of 4.2m p.a., which is now supplemented via the Better Care Fund, as shown on page 13 of the paper. The annual value of equipment and services provided currently is around 5.8m. The request to participate in this procurement did not come to the July meeting of the Governing Body. Given a requirement to provide agreement to participate in the procurement to Surrey County Council this decision could not be deferred to the Governing Body meeting in September. This was due to the August meeting being a seminar and not held in public. As such the CCG is able to rely upon emergency powers afforded to both Chair and Chief Officer under clause of the CCG constitution. That is: The powers which reserved to the Governing Body may in an emergency or for an urgent decision be exercised by the Chair and the Chief Officer, after consultation with at least one (1) Lay Member and one other Locality Lead. This shall be reported to the next meeting of the Governing Body for ratification. This power was enacted on 10 th August 2015 and it was agreed to participate in the ICES procurement.

3 Recommendations: In the light of discussions held on 10 th August 2015 and in accordance with Clause of the CCGs constitution, the Governing Body is asked to: Ratify the decision to include North West Surrey CCG in the re-procurement of Surrey Integrated Community Equipment Service (ICES), led by Surrey County Council. Health Impact: Financial Implications: Legal Implications: Equality & Diversity Communication & Engagement To ensure residents living in Surrey who have a required need for community equipment are able to gain access to the service to maintain and/or improve their health and wellbeing, enabling them to continue to live as independently as possible. The estimated value over the full contract term is 28.5 million with an annual agreed joint budget of 4.2m. Procurement legislation and guidance applies. Also, Care Act 2014 (part 1) State here whether an Equality/Diversity impact assessment has been done & Outcome Stakeholder engagement via the Surrey Equipment and Adaptations project provided user and carer feedback, to inform new service specifications. CCG Finance and Contract leads are members of the ICES Commissioner Board and engaged procurement project groups. SCC Adult social care, children s services and CCG commissioners have been engaged in re-procurement planning process. Community health and adult social care professional are engaged in the specification review process. Reputational Implication: Risk Register: Re-procurement to ensure on-going provision of ICES is essential for NWS CCG residents. Refer to any risks on the register

4 Briefing Note Contract Title Integrated Community Equipment Service Directorate/s Adult Social Care Contract Start Dates Contract Terms Extension Term Procurement Specialist Contract Manager Key Stakeholder Contract Categorisation 01/04/ Years 2 x 1 Year Tim Cowles Tony Draper ASC - Liz Uliasz NW CCG G&W CCG SD CCG SH CCG NEH & F CCG Strategic

5 Gateway One - Business Case Note - to be completed with the Key Stakeholder/s 1.1 Business Need The Integrated Community Equipment Service (ICES) was established in Surrey in 2003 following recommendations from The Audit Commission Report, Fully Equipped (2002). Surrey and NHS set-up a pooled fund, equipment is no longer badged as Health or Social Care, the new arrangement removes barriers and inefficiencies. Since 2003 Surrey County Council (SCC) has previously led the commissioning and procurement on behalf of the NHS s commissioning function and has procured a service twice. The existing ICES contract is due to expire on the 31/03/2016 and there is no more extension periods available. The service has a comprehensive specification for all of the logistical support services required to operate and deliver an equipment loan service to children and adults across Surrey. The service is jointly funded via Clinical Commissioning Groups (CCGs) and social care (Surrey ASC) on a 50/50 basis. The contract is currently providing around 85,000 pieces of equipment to 26,000 people per year which is an increase in demand from the original agreed joint budget of 4.2m p.a, with the value of equipment and services provided currently trending at around 5.8m p.a. The ICES contract is currently funded through multiple budgetary streams due to the historic complexities and changes that have been undergone since The interdependencies are complex 1. The original pooled budget arrangement. 2

6 2. The introduction of Health Care Providers 3. The re-structure of the original PCT into the seven CCG s that access the ICES contract 3

7 4. The current position following the realignment of Adult Social Care to mirror the CCG s.? This is a statutory service requirement and SCC will be leading the commissioning and procurement on behalf of the six (seven) Clinical Commissioning Groups (CCG s) who access this service: East Surrey Guildford and Waverley North East Hampshire & Farnham North West Surrey Surrey Downs Surrey Heath (Windsor and Maidenhead) Both Surrey County Council and NHS organisations in Surrey face significant financial challenges. This service will be required to be cost effective and offer best value as there is an increasing demand for the service. The Care Act 2014, together with a range of regulations and statutory guidance, is the base upon which social care will be developed. Local authorities functions relating to provision of care and support for adults are set out in Part 1 of the Care Act Services delivered must enable SCC to comply with the key requirements of the Care Act These are: A duty to promote wellbeing A legal requirement to take a person centred approach to care planning and support at all stages of planning and provision; including taking all reasonable steps to actively involve the person in the planning process, their carer and relevant others Arranging services, or taking other steps to prevent, reduce or delay peoples need for care and support Provision of information and advice that helps people to understand what help, care and support is available and how to access it Undertaking preventative activity which involves promoting wellbeing; early intervention; and maximizing independence 4

8 Put in place arrangements that enable people to use personal budgets and direct payments To collaborate and cooperate with other services to facilitate a vibrant, diverse and sustainable market of care and support provision Take a holistic view of a person s needs Support smoother transition of young people to adult care and support Protect adults from abuse or neglect A duty of candour - to be open when things go wrong and to take action 1.2 Project Objectives To ensure residents living in Surrey who have a required need for community equipment are able to gain access to the service to maintain and/or improve their health and wellbeing, enabling them to continue to live as independently as possible. To ensure compliance with statutory and legal Requirements as set out in the Care Act The Care Act 2014, together with a range of regulations and statutory guidance, is the base upon which social care will be developed. Local authorities functions relating to provision of care and support for adults are set out in Part 1 of the Care Act To maximise value for money, and achieve the best possible social, economic and environmental outcomes for the money spent. Social Value will apply to this specification and procurement approach. In addition, Commissioning and Procurements will focus on collaborative and partnership working relationship with CCG partners. We will be looking for: Agreement on a contract that will deliver core KPIs within budget and in compliance with National Standards and quality measures Agreement on outcome based results that will enable us to measure the performance Implementation of a robust Supplier & Contract Management Framework which has an established baseline for service delivery, relationship management, exit planning and contract administration A specification that is fit for purpose which was jointly drafted by commissioner, prescribers, service user groups and potential providers and Procurement. 1.3 Scope In Scope: The community equipment contract is a comprehensive specification which is made up of multiple elements. This re-tender will focus on: Sourcing Procuring Storing Delivering Servicing Maintaining Collecting Cleaning Refurbishing Providing Information and Support to Commissioners/Prescribers/Service Users In addition, we will be working with wider partners such as District / Boroughs (D&B s) and Residential Homes to potentially develop income generation into the contract by giving access to the purchase and supply elements of this contract. Out of Scope: Due to a number of synergies with the purchase, supply and maintenance of equipment with the ICES contract a number of services were identified to be reviewed for suitability to be included within the ICES re-tender. However, 5

9 due to complexities the following services have been deemed out of scope: Telecare Home Improvement Agencies Handyperson Services Wheelchair services 1.4 Key Timescales This section can be copied and given to the stakeholders (including finance) to help them plan their resource for support in evaluating etc. Milestone Date Tenders returned End/Early Sept/Oct 2015 Tender evaluation (Including Financial Appraisal) Mid Oct 2015 Cabinet Approval Mid - November 2015 Award Contract Early December 2015 Contract implementation and handover Early January 2016 Contract Starts 1 st April

10 Route to Market 2 - BUDGET 2.1 Summary The ICES contract is equally pool-funded by SCC and Surrey Health CCG s. The funds are held centrally by SCC and paid directly to the Provider. There is a growing demand for community equipment in Surrey due to an increase in people over 65 that have specialist needs to remain in their own homes, which is leading to a repetitive overspend for the pooled budget. The ICES contract is funded through multiple budgetary streams. As part of the contract moving forward one of the objectives is to agree a realistic budget and finance model to be flexible enough to allow for fluctuations in funding within the LJCG areas. The original financing model was a 50/50 split between Health and Social care. This pot of money added up to a budget of 4.2m ( 2.1m from both parties) per annum. Over the course of the contract due to the increase in demand there is in addition a 1.5m pot of money allocated from the Better Care Fund to cover the estimated overspend. There is also added complexity with each party (Social Care & Health) having 50/50 cover any overspend on the contract. At present, there is no clear way to attribute this cost fairly to our CCG partners since the single PCT was restructured part way through the existing contract into three and subsequently restructuring into six partners of the contract. In addition, under the finance model that the contract operates which is a Purchase Model ownership of the equipment belongs to the commissioners the first time it is purchased until it can no longer be recycled for use. The following diagram illustrates the purchase model: 7

11 The existing financial contributions from each CCG partner are allocated on an indicative volume basis but also having to factor in the shared equity of equipment recycled across the contract. For example: 1. Prescriber A within CCG A requests Equipment X. 2. Prescriber A has to purchase Equipment X at brand new for the full cost. 3. Cost of Equipment X and delivery is charged back to CCG A budget code. 4. Equipment X is no longer required by the Service User A. It is collected, recycled and placed in warehouse. 5. Prescriber B within CCG B requests Equipment X. 6. Prescriber B receives Equipment X at a nil charge. 7. Cost of delivery for Equipment X is charged back to CCG B budget code. At present there is no clear method to share the benefits across all the individual CCG and Social Care areas. It is likely; under the new contract the proposed financial model would allow for more flexibility for all parties fluctuate their contributions alongside their wider programmes of work. The following diagram outlines out this model could look. 1. One invoice comes in from Provider centrally to SCC. 2. Total invoice is broken down by LJCG area. 3. SCC sends out seven invoices to a local level. 4. Payment sent to SCC centrally from each area to pay the Provider. 8

12 At present this model would offer increased transparency, local accountability and clear risk share between SCC and CCG at a local level. Unfortunately, as already described this model doesn t address the issue around sharing the equity of equipment that has been purchased by one area and recycled for a zero charge within another. 9

13 Gateway 2 Capital Revenue Total Estimated cost of project over the full term 28,500,000 28,500,000 Cost per annum Funding Capital resources Government capital grant Third party capital contribution Approved current base budget 2,100,000 10,500,000 Government revenue grant Third party revenue contribution 3,600,000 18,000,000 Total funding available 5,700,000* 28,500,000 Provide budget code for capital and revenue *For breakdown of existing agreed funding contributions please see Appendix A at the back. 3 Sourcing Strategy 3.1 Options Considered Describe the options considered, the reasons for selecting/rejecting them, and the comparable cost over the full term. Options Selected? Capital Revenue Total Option 1: Do Nothing This is not an option as provision of community equipment is a statutory requirement the commissioners need to ensure a full tender process is completed to ensure provision continues from 1 st April Option 2: Tender under the existing Financial Model (Purchase) Positives: 1. It is a cheaper overall model because the equipment is recycled free of charge. 2. All else within the model is equal cost wise. 3. The initial prescriber pays the full cost. 4. This promotes recycling amongst prescribers. 28,500,000 28,500,000 Negatives: 1 Difficult to make local costs transparent 2. Reduces incentives in local control 3. Could use a rolling average only one way on dealing with Surrey wide approach. Option 3: Tender for a Credit Back Financial Model Positives: 1. Equipment issue same every time (new or recycle) 2. Last user pays the full cost Negatives: 1. Last user method may not result in local ownership. 10

14 2. The total cost of this service could be more if there is a high number of recycles through ancillary costs. 3. Prescriber always pays full contracted cost of equipment value. This doesn t include depreciation. 3.2 Market There are three key players in the marketplace for the Integrated Community Equipment Service. They are Millbrook Healthcare, Nottingham Rehab Supplies and Medequip Assistive Technology. With more Local Authorities coming to the market to outsource their internal equipment service provision it could lead to congestion in the market. However, an estimated 28.5 million contract over the full contract term will be very attractive to the market and it is likely that all three major players will bid for the contract. 3.3 Contract Term 3 years Staff implications No implications for SCC staff. Due to the Community Health Providers contracts coming to the end of the contract term over the next three years this may lead to some operational changes part way through the contract. 4 Savings and Efficiencies 4.1 Potential savings opportunities? There is unlikely to be any cashable savings on the budget achieved through this contract due to the increasing demands in pressure. However, it is possible that we will be able to claim cost avoidance on the tender process leading to the identification of more value for money pieces of equipment. In addition, one of the big drivers to move towards local invoicing is an increase in accountability within the local prescribing teams. It is recognised that there are more complex cases requiring increased number of equipment on average than a few years ago however this local accountability can influence prescriber behaviour through local scrutiny. There has undoubtedly been for various reasons an increase in over prescription through fear of consequences. For example: Associated penalties linked to pressure care. 4.2 Other Efficiency Gains /Benefits We intend to investigate the possible cost avoidance savings: 1. The cost avoidance for both the CCG s and Social Care by promoting equipment as an alternative to utilising accommodation with care. 2. The cost avoidance for the NHS CCGs through the service facilitating hospital discharges. 11

15 5 COMMERCIAL PERFORMANCE 5.1 Price and Cost Modelling As part of the tender exercise the commissioners would like to investigate the possibility of introducing price competition for the top items by value that are regularly prescribed. However, for this to be successful, the equipment that is specified as part of the tender bid will have to be extremely accurate with prescribers recognising that if a piece of equipment meets the specification and offers value for money then it will be selected. ICES There is a robust KPI incentive structure for the ICES contract for which the existing provider consistently achieves the required targets. Performance targets are currently set on: 1. Activities completed within specified times 2. Service failure reporting 3. Complaints/complaints response 4. Call answering 5. Stock holding/availability An incentive payment of 120,000 p.a. is paid if the service provider meets all of the above in all 12 months of the year. These KPI s are currently being reviewed as the commissioners would like more of an increase put on the provider to drive value for money through the contract. 5.2 Contract Development A contract will be developed through SCC legal team based on the existing version. 5.3 Innovation and Value for Money The commissioners are reviewing the following areas but not limited to for inclusion in the next contract: 1. Income generation through partners / Rental e.g. SCC Residential / Nursing homes renting equipment through this contract which is then brings income into the contract and reduces cost to those providers. 2. Incentivising the provider to lead on the recycle and collection. 3. Increasing service user led deliveries to minimise failed deliveries. 12

16 APPENDIX A Health 2,100,000 Social Care 2,100,000 Total 4,200,000 CES Governance Agreement Pooled Fund Investment BCF % Health % Social Care Total Recommended Included % % West Surrey North West Surrey CCG 31.88% 669, % 621,025 1,290, % 452, % 452,000 0 Surrey Heath CCG 8.18% 171, % 172, , % 129, % 74,256-54,744 Guildford & Waverly CCG 18.32% 384, % 365, , % 280, % 187,000-93,000 NE Hampshire & Farnham CCG 4.15% 87, % 78, , % 65, % 65,000 0 Windsor, Maidenhead & Ascot CCG % 20,252 20, % 10, % 10,000 0 Sub Total West Surrey 62.53% 1,313, % 1,257,900 2,571, % 936, % 788, ,744 Mid Surrey Surrey Downs CCG 21.60% 453, , % 429, % 429,000 0 ASC Mid Surrey 24.72% 519, ,120 Sub Total Mid Surrey 21.60% 453, % 519, , % 429, % 429,000 0 East Surrey East Surrey CCG 15.87% 333, , % 235, % 235,000 0 ASC East Surrey 15.38% 322, ,980 Sub Total East Surrey 15.87% 333, % 322, , % 235, % 235,000 0 TOTAL % 2,100, % 2,100,000 4,200, % 1,600, % 1,452, ,744 13

17 14