20082009 FINANCE AND PERFORMANCE REPORT Month 3 Board 24th July

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2008/2009FINANCE AND PERFORMANCE REPORT -
Month 3 Board 24th July
Jonathan Wise, Director of Finance Performance

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Contents

• Part 1 Finance report (slides 3-14)
• Part 2 Investment Programme (slides16-17)
• Part 3 Acute commissioning and PBC report
• (slides 18-26)
• Part 4 Performance report (slides 27-39)
• Finance Appendices (slides 40-48)
• Summary Operating Cost Statement and variances by
  budget heading
• 2. Balance sheet
• 3. Cash flow
• 4. Capital

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PART 1 FINANCE REPORT
Financial position - Summary

• Statutory duties
• Forecast underspend against revenue resource
  limit
• Achievement of capital resource limit
• Forecast underspend against cash limit
• Achievement of Operating plan surplus
• Improvement in ALE assessment
• Budget holder responsibilities / training

4
Overview of budget position at month 3

• Initial budgets agreed by Board at March meeting
  updated
• Initial Changes Month
  2 Changes Month 3
• 000 000 000 000
  000
• Issued budgets
  418,054 1,784 419,838
  227 420,065
• Contingency 4,200 (626)
  3,574 (227) 3,347
• Investment programme 9,500
  (670) 8,830 - 8,830
• TOTAL 431,754 488
  432,242 0 432,242
• Reserves/other allocation adj. -
  506 506
  (207) 299
• Surplus for investment 12,446 -
  12,446 - 12,446
• TOTAL 444,200 994 445,194
  (207) 444,987
• Access to contingency as agreed by CE
• Investment programme as agreed by Board

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Overview of allocation at month 3

• Allocation 000
• Total at Month 1 444,200
• New Allocations
• Dental 222
• Young peoples DAT 169
• Child death review processes
  60
• Moves from anticipated to actual
  434
• Anticipated changes 109
• Total at Month 2 445,194
• New Allocations / Adjustments
• 07/08 carry forward 1,700
• High cost area supplement 628
  
• Charge for excess 07/08 bank balance
  (5)

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Overview of month 3 position

• Aggregate surplus of 4,207k largely reflecting
  planned surplus for investment in 09/10
• Variances on all issued budgets net to 1,190k
  over spend
• Acute Commissioning overspend of 1,386k based
  on May activity for 16/22 acute providers
• Joint Commissioning underspend of 319k, mainly
  due to continuing care
• Primary Care underspend of 168k, due to
  slippage on GMS enhanced services and additional
  dental allocation
• Provider services overspend due to lower income
  (132k) and costs in respect of property
  disposals (125k)
• HQ underspend of 12k due to vacancies offset
  by use of interims to cover vacancies

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Acute CommissioningBased on May data where
available extrapolated ( other specific
assumptions) to 3 months

• Variances
• North West London Hospitals 592k over
• Trust is over on day cases, out-patients and
  emergency PBR in patient.
• Imperial Hospitals Trust 416 over
• Day case over by 145k, Elective over by 95k
• Excluded activity over by 93k and other drugs
  over by 83k
• Royal National Orthopaedic Hospital 329k over
• ITU over by 231k and excluded drugs over by
  89k in month 2
• University College London Hospital 102k over

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ACTIONS

• Review in detail out-patient overspend at NWL
• Further refined transaction analysis for non PBR
  activity/cost i.e. drugs, radiology, pathology
  SCBU (particularly NWLH Imperial)
• Solve data quality issue with Imperial
  (Hammersmith AE not reported month 2), 4 revised
  reports in month 2, still had indications of
  incomplete and missing data.
• Established trends and observed step increase in
  day case and elective (imperial), AE (NWLH) and
  other top SLAs.
• Investigating AE grouper for costing issues and
  appropriate assignment of activity due to
  de-hosting issue (NWLH).
• Other anomalies in trend at specialty level
  queried with relevant trusts.

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Joint Commissioning

• Variances
• Long Term Care 227k under due to lower than
  planned activity in Continuing Care.
• Children and Families 36k under due to lower
  cost per case activity
• Substance Misuse - 36k under due to vacant posts
  and training
• Learning Disabilities 53k under due to lower
  cost per case activity

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Primary Community Commissioning

• Variances
• Medical Contracts 71k under
• Under spends due to list validation savings in
  advance of budget profile
• Slippage on enhanced services
• Dental Contracts 26k under
• Dental development funding received and schemes
  not yet commenced
• Pharmacy Contracts 39k under
• Under spend for April June based on April 08
  PPA data
• Prescribing 30k under
• Under spend for April June based on April 08
  PPA data
• Actions
• Review enhanced schemes
• Review list validation savings profile

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PCT Provider Services

• Variances
• Income Shortfalls
• NWL Hospitals for use of Willesden 92k
• Catering 25k
• Harrow PCT 15k
• Expenditure
• One-off termination payment for disposal of
  leased property (13k)
• Costs associated with Brent outreach staff (may
  be transferable to CNWL) (15k)
• One off disposal and related costs of property
  (112k)
• Actions
• Resolve SLA income issues with NWLH and others
• Resolve responsibility for Outreach staff with
  CNWL
• Review potential to meet one-off costs with
  internal budget management/use of contingency

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PCT Management Costs

• Variances
• Underspends due to vacancies in primary care
  commissioning (46k), and clinical leadership
  (45k)
• Pressure in finance and performance (51k)
  includes interim staff
• Pressure in strategic commissioning (27k)
  includes interim staff
• CE budget pressure relating to legal fees (20k)
• Actions
• Review use of legal advisors

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Balance Sheet, Cash and Capital

• Balance Sheet
• 2008/09 indexation of 2.181m applied to fixed
  assets and added to revaluation reserve on 1
  April 2008 per DH guidance
• Assets under construction of 980k are deferred
  assets relating to the Willesden PFI scheme
• The sale of College Road Clinic was finalised in
  May 2008, following the impairment for that
  purpose during 2006/07
• Debtors down by 3.4m to date mainly relating to
  long outstanding Sure Start funding received
• Cash
• Drawings are above plan in June mainly due to
  creditor reductions
• Pilot three months of no in-month supplementary
  drawing facility will increase focus on cash
  management from July 2008
• Capital
• Slow capital spend to June of 124k (3.9 of
  budget)

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Achievement of Operating Plan surplus

• A full assessment of the forecast outturn is
  underway and will be presented (with proposed
  actions) at the July Board, building on the risk
  assessment presented to the March Board

Risk Assessment of Overall Financial Position
2008/9
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Other Corporate objectives

• ALE assessment
• Action plan to deliver the Corporate objective of
  achieving adequate or better across all
  dimensions being developed
• Update on high risk areas being considered at
  July EMT and July Audit Committee
• Budget holder responsibilities / training
• Budget sign-off letter plus Finance guide clearly
  set out responsibilities
• Training undertaken 12/5 (14 attended), 13/6 (12
  attended)
• Plan for July onwards to be developed in light of
  feedback etc

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PART 2 INVESTMENT PROGRAMME
Proposed delegation for investments

• Board delegates approval of items less than
  500k to the Investment Panel
• total of the non-recurrent and the annual
  recurrent costs
• Mirrors delegation to Capital Group
• Board would approve around 30 of the schemes
  planned for 2008-9
• Board would approve around 60 of the investment
  planned for 2008-9

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Investment Programme Phase 2 Schemes

• Stage Scheme 08/09
• Approved at May Board k
• 1 HPV Immunisation 88
• 1 PBC Exec
  100
• 0 Primary Care Strategy
  65
• 0 HCAI
  56
• 0 Health Visiting
  
  145
• N/A Programme Costs
  216
• Recommended for Approval
• World Class Commissioning
  647
• Childhood Obesity 112
• 2 BAME Management Development
  17

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PART 3 ACUTE COMMISSIONING PBC

• Summary by Provider
• 000s
• North West London (592) (2.89)
• Imperial College (416) (3.58)
• Royal Free 94 4.12
• UCLH (102) (7.4)
• RNOH (329) (69.3)
• Other ( 7)
• Acute sub total (1350) (3.3)
• Above based on month 2 data from 16/22 providers
  extrapolated to 3 months on a linear basis and
  adjusted for specific assumptions in relation to
  some Trusts.

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Validation and Challenges

• The PCT is strengthening its acute contract data
  validation processes. Challenges with Trusts for
  month 1 and 2 (cumulative) are
• k
• Patients incorrectly attributed to Brent PCT
  139
• OP Follow-up ratio 646
• OP multiple First Atts in same specialty 292
• OP multiple First Atts 271
• Emergency re-admissions 3
• Cancelled Operations (S22) charged 39
• T-Codes (Mental Health) identified as
  unadjusted 34
• OP Follow-up for procedures not commissioned
  6
• Low Priority Treatments
  11
• Other
  
  30
• Total 1,471
• The month 2 position assumes that of 1,471k of
  challenges, 771k are successful

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Acute CommissioningBased on May data where
available extrapolated ( other specific
assumptions) to 3 months

• Variances
• North West London Hospitals 592k over
• Day case specialty gastroenterology up by 48K
  rheumatology by 38k in month 2
• Emergency (short long stay) specialty general
  medicine up by 100K
• First outpatient is up by 19 Follow up by 31
  (see chart)
• AE up dramatically from month 1, minor up by
  49 standard and high cost up by 13 (see PBR
  variance charts)
• Pathology up by 100K and Radiology up by 56K
• Imperial Hospitals Trust 416 over
• Day case up by 145k, Elective up by 95k, First
  attends up by 53k Follow up by 114k
• Excluded and other drugs up by 83k, renal
  dialysis radiotherapy up by 30k
• Royal National Orthopaedic Hospital 329k over
• ITU up by 154k and excluded drugs up by 59k in
  month 2

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PBR Cost Variance
Month 2 (NWLH)
Represents variance for month 2 before challenges
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Practice Based Commissioning

• Budget and Reporting Process
• m
• Annual budget for Acute SLAs
  163.1
• less AE/GUM (10.3)
• Non PbR (54.7)
• PbR Budget assigned to PBC 98.1
• 70/71 practices have signed up to budgets
• Cluster plans being agreed
• Budget reports issued to Clusters and Practices
• PCT is working with Dr Foster to develop PBC
  budget reporting system further
• Action
• PCT to work with clusters in developing plans

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PBC Position by Cluster/Practice
Month 2 Summary by Cluster Budget Actual Vari
ance 000s 000s 000s
Harness 3,242 3,462 (220)
(6.8) Independent 700 771 (71)
(10.1) Kilburn 3,768 4,258 (490)
(13.0) Kingsbury 2,928 3,255 (327)
(11.1) PCT 279 606
(327) (217.2) Wembley 2,612 2,871
(259) (9.9) Willesden 2,250 2,358
(108) (4.8) Sub total 15,779 17,581 (1,8
02) (11.4) High Risk Pool 574 290
284 50.5 Total 16,353 17,871 (1,518)
(9.3) Above based on month 2 data from 16
out of 22 providers.
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Acute Commissioning/PBC Reporting

• Reconciliation
• Total acute 42,213
• Month 3 extrapolation/challenges (13,574)
• Non-PbR (9,373)
• SUS/SLAM difference 600
• AE/GUM (1,995)
• PBC expenditure 17,871

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Practice Based Commissioning

• High level reports issued to Clusters and
  Practices
• Further detail requested to be provided through
  Dr. Foster
• Data validation queries also issued
• - format and responses to be followed up with
  Cluster leads

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Part 4 - Performance Report 2008-09

• The 2008-09 Performance report is monitoring 4
  main target areas as set out in the 2008-09
  Operating Plan
• National Requirements - refers to national
  commitments where the requirements are very
  specific at a national level and must be cascaded
  to PCT level.
• National Priorities - refers to national
  commitments, but where trajectories are set by
  the PCT.
• London Priorities - as per national commitments
  but for the London SHA area.
• Local Priorities- Priorities and any
  corresponding targets agreed locally.
• Existing Commitments - PCT required to continue
  to achieve targets from prior commitments.
• The SHA is yet to release 2008-09 thresholds for
  many of the indicators, and therefore the RAG
  status has been calculated using 2007-08
  thresholds. Areas currently identified as RED
  are
• MRSA
• 4 week smoking quitters
• Diagnostic waits over 6 weeks
• Inpatients waiting 11 weeks
• Outpatients waiting 5 weeks
• Category B ambulance response rate within 19 mins

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Performance Report- Year end position as at March
08 and Current Status
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Performance Report- Year end position as at March
08 and Current Status (2)
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Performance Report- Year end position as at March
08 and Current Status (3)
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Performance Report- Year end position as at March
08 and Current Status (4)
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Performance Report- Year end position as at March
08 and Current Status (5)
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Performance Report- Year end position as at March
08 and Current Status (6)
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Smoking Quitters

• The 07-08 actual was 186 for the year, an
  average of 16 quitters per month
• The chart above shows the monthly plan to
  achieve the 2008-09 operating plan target of
  1756.
• The year-to-date May 08 actual is 57, 47.2
  below the profiled target.

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MRSA

• In 2006-07, NWLH reported 51 cases of MRSA, and
  in 2007-08, 33 cases were reported.
• This is a 35 reduction In MRSA cases between
  2006-07 and 2007-08.
• A further 15 reduction on 2007-08 is needed to
  achieve the 2008-09 target of 28 cases.
• In April and May, there have been a total of 10
  MRSA cases reported at NWLH, representing 36 of
  the annual target.

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National Requirements narrative

• MRSA (Owner Director of Public Health)
• Reasons for poor performance
• Root cause analysis of bacteraemias in 2007/08
  indicated a significant majority were line
  associated infections or were in fact
  contaminants.
• In the first 2 months of 2008/9, the majority of
  MRSA bacteraemias have been associated with
  wounds.
• Action taken
• Several of the cases in the first 2 months are
  subject to appeal by NWLH as it appears that they
  were transferred already septic from other Acute
  Trusts.
• high impact interventions around line care and
  the taking of blood cultures are being
  implemented to tackle this at NWLHT and this will
  be a major and challenging piece of work.
• Another key priority is ensuring those patients
  identified as positive on admission are
  decolonised.
• Admission screening rates are being monitored
  regularly.
• To support decolonisation of MRSA positive
  patients in the community prior to routine
  admissions to NWLHT, the HCAI group has now
  developed a consistent policy for decolonisation
  in primary care.
• Other key elements of the NWLHT action plan
  address hand hygiene, full implementation of the
  high impact interventions, antibiotic use,
  cohorting and isolation, surveillance, cleaning
  and decontamination, training, leadership and
  governance.
• As part of its action plan, NWLHT is launching an
  intensive hand hygiene campaign, with fortnightly
  hand hygiene audits in clinical areas. Progress
  against the action plan is being monitored via
  the Brent and Harrow HCAI group as well as each
  individual trusts Infection Control Committee.
  The HCAI group also continues to share and learn
  from results of Root Cause Analyses across the
  local health economy.
• In the investment plan there are 2 Infection
  Control Nurses  to look in particular at Control
  of Infection in Nursing Homes and Residential
  Care

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National Priorities narrative

• Smoking quitters (Owner Director of Public
  Health)
• Reasons for poor performance
• The discontinuation of the community advisor
  scheme at the end of March 2007 was a major
  contributing factor in the decrease in
  performance.
• Trained community advisors (mainly pharmacists)
  played a pivotal role in providing structured 11
  support sessions to clients on a drop-in basis at
  their local pharmacy.
• The payment structure was such that it was
  difficult to cap payments and this resulted in a
  large overspend which was unsustainable during
  the Turnaround process.
• Action taken
• The PCT has invested a further 520K in 08/09 to
  drive forward the Smoking Cessation initiative. 
  It has renegotiated the incentive payments to
  Pharmacists and has to date recruited 39
  pharmacists.
• It has also benefited from a report by the
  Regional Tobacco Control Group which suggested a
  3 year strategy and a broadening of smoking
  cessation work to a tobacco control policy. This
  may need further investment by the PCT and a
  Business Case for this will be developed.
• Childhood Immunisation (Owner Director of Public
  Health)
• Reasons for poor performance
• There are reported difficulties in maintaining
  services because of cut backs in staffing levels
  due to turnaround. 
• Problems  with the late recording and inputting
  of data of immunisations to the Community
  Information System.

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Existing Commitments narrative

• No of inpatients waiting over 11 weeks (Owner
  Director of Strategic Commissioning)
• Reasons for poor performance
• In May 9 of the IP waits were 11 weeks waits.
  This is a decrease on April which was 13.
• The breaches occurred across 11 providers with
  almost half being at NWLH and 12 at Barnet and
  Chase Farm
• 38 of the breaches were for TO and 14 for
  Opthalmology. For both specialties 2 thirds of
  these were at NWLH.
• Action taken
• Due to problems with theatre capacity NWLHT
  currently needs to provide theatre sessions out
  of normal working hours. Agreement has now been
  reached regarding working arrangements for TO.
  Plans are in place to address the backlog.
• We will continue to monitor all acute trusts.
• No of outpatients waiting over 5 weeks (Owner
  Director of Strategic Commissioning)
• Reasons for poor performance
• In May 12 of the OP waits were 5 weeks. This is
  a 50 increase on April which was 8. Almost a
  quarter of these breaches are in TO and
  Rheumatology and 11 in Opthalmology.
• The breaches occurred across 13 providers with
  half being at NWLH and a third at Imperial
  college NHS Trust.

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Existing Commitments narrative (2)

• Choose and Book (Owner Director of Primary and
  Community Commissioning Services)
• Reasons for poor performance
• There are still concerns regarding slot
  availability at Provider Trusts which affects our
  current performance.
• It is also apparent that initial IT training is
  not sufficient to ensure that Choose and Book is
  used routinely to deliver maximum patient
  benefit.
• Action taken
• EMT have agreed that we should look at improving
  the system with our current resource this would
  include
• reviewing the IT infrastructure with GP practices
  and upgrade any noncompliant system.
• review current training capacity.
• PEC engagement with raising the profile of CB,
  using the 18 week target as a lever.
• An in-year monitoring trajectory will be drawn up
  where the PCT will aim for 60 of OP appointments
  will be made using choose and book by September,
  building up to 70 in December and hitting 80 in
  February 09.
• Category B ambulance calls responding within 19
  minutes (Owner Director of Strategic
  Commissioning).
• Reasons for poor performance

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PRIMARY CARE SERVICES
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Appendix 5 Cash Flow Report to 30/06/08
Cash drawings in June were increased to reduce
creditor levels. The monthly cash plan profile
has been adjusted in December March to reflect
notified changes to the cash limit.