• Like
New models for NHS delivery
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

New models for NHS delivery

  • 1,020 views
Published

Driving efficiency and contestability. …

Driving efficiency and contestability.
Mr. Matthew Custance, Director - Public Sector Healthcare, KPMG

Published in Health & Medicine , Business
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
1,020
On SlideShare
0
From Embeds
0
Number of Embeds
1

Actions

Shares
Downloads
18
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. CORPORATE FINANCE New models for NHS delivery Driving efficiency and contestability 19 May 2010 HEALTHCARE
  • 2. Outline  Structure of Health and Social Care in the UK  Moving from a state-run NHS to a patient-led NHS  A bumpy ride  Templates for change © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 1
  • 3. Overview of Provision of Health and Social Care Department of (Public) Health DH Social Local Authorities DH - NHS Care Policy (Social Care) Strategic Health Public Sector Private Sector Authorities Providers Providers Commissioners Public and Private Sector Providers © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 2
  • 4. A new market The NHS has changed… System Management Oversight New NHS Providers Market Commissioners £100bn pa 380+ NHS trusts, 152 PCTs GPs, GP fundholders Private providers, Patient choice Third sector … Markets come with a regulatory framework. This framework needs to be reliable and enforceable. It needs to enhance competition and help deliver integrated, value for money end to end services. © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 3
  • 5. Outline  Structure of Health and Social Care in the UK  Moving from a state-run NHS to a patient-led NHS  A bumpy ride  Templates for change © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 4
  • 6. Moving from a state-run to a patient-led NHS Key policy drivers  Efficient procurement introducing real risk transfer  PFI  NHS Shared Business Services  Creating/commissioning a patient-led NHS (March/July 2005)  developing the idea of choice and contestability  tasking PCTs as commissioners, not providers Implications  The state operates primarily as the champion of the user of public services (the patient, the pupil, the infirm, the offender, the traveller)  Where the state is involved in delivery of public services, it is a “means” to achieving good, stable, value-for-money public services; it is not an end in itself James Stewart, Infrastructure UK, Nov 2008 © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 5
  • 7. The increasing role of the private sector 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 PFI Hospital Programme LIFT ISTC Waves 1-2 NHS shared business services Pathology outsourcing Increasing breadth of service delivery © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 6
  • 8. Outline  Moving from a state-run NHS to a patient-led NHS  A bumpy ride  Templates for change © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 7
  • 9. The rise and fall of PFI Number of deals to close by year 20 15 10 5 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Capital value of deals to close by year 2,500 2,000 £ million 1,500 1,000 500 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 8
  • 10. The Private Finance Initiative Features:  Private sector design, build, finance and maintain the facility  Payment mechanism rewards availability of facility  Transfer of lifecycle cost risk  Hard FM included  Soft FM included to varying degrees in some deals Key issues:  TUPE  Constraints on changing use of facilities  Initial overscoping of many facilities  Exhaustion of pipeline © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 9
  • 11. The rise and fall of central clinical contracting Independent sector treatment centres 800 Five year scheme value (£m) 700 Fairness in Primary Care 600 500 400 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 Year of full service commencement Source: Department of Health © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 10
  • 12. Independent sector treatment centres Features:  Initially take or pay contracts  Transfer of all construction (where applicable) and operating risk  The first major programme of private sector clinical provision in secondary care in the NHS Key issues:  Attracting new players  TUPE  Demand risk – estimating demand, NHS perception, new entrant issues  Clinical negligence coverage  Contract specification © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 11
  • 13. The rise (?) of NHS-led contracting Ongoing devolution to local NHS organisations has meant a loss of focus but a broader range of opportunities with greater local buy-in  Transactions of note:  Back office outsourcing  PCTs  Acutes  Pathology outsourcing – acute led  Radiology/imaging outsourcing – acute led  Community health provision  Clinical pathway management  Hospital management © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 12
  • 14. Outline  Moving from a state-run NHS to a patient-led NHS  A bumpy ride  Templates for change © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 13
  • 15. Templates for change – case studies  Guys/Serco Pathology  Great Yarmouth and Waveney Community Services  Hinchingbrooke Hospital Franchising © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 14
  • 16. GSTS pathology Guys and St Thomas NHS Foundation Trust  Improve efficiency of service delivery esp back office  Improve patient care  Develop the business Serco  Beachhead for a market leading pathology business  Opportunity to extend into a growing market  Access to NHS “family” Features  Serco control of JV  Outsourcing arrangement between Guys and JV for delivery of pathology services  Secondment of Trust Staff Allowed Serco the opportunity to enhance NHS provider efficiency, rather than to compete directly with that provider © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 15
  • 17. Great Yarmouth and Waveney Community Services Policy Background  All PCTs required to have a plan for separating provider arms by Oct 2009  Deadline then dropped…  … then changed to 31 March 2010 Great Yarmouth and Waveney (GYW) PCT  A pathfinder for externalising provision of community health  Initially planned as a procurement open to the private and third sectors  October 2009: Andy Burnham states that the NHS is the “preferred provider” of services and should be given two chances to improve poor performance before contracting out  GYW therefore switched tack and allowed only NHS organisations to bid  Challenge by ACEVO  Procurement cancelled by the DH Transactions in the NHS are rarely smooth and frequently politically complex © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 16
  • 18. Hinchingbrooke Next Steps Project Background  Hinchingbrooke Healthcare NHS Trust has a £40 million accumulated deficit on annual revenues of around £100 million  Strategic Health Authority has agreed to guarantee the future of the hospital – but on the basis that the status quo is not an option The Transaction  Operational Franchise  The Trust remains an NHS organisation but with management outsourced  Current bidders: Ramsay Health Care UK, Circle, Serco  Transfer of all financial and operational risks to the successful franchisee, subject to total liability caps and profit share arrangements  7-10 year term If successful, this transaction provides a genuinely new model for transforming performance in the NHS © 2010 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. 17
  • 19. Presenter’s contact details Matthew Custance KPMG LLP (UK) +44 (0)20 7311 8140 matthew.custance@kpmg.co.uk www.kpmg.co.uk