uk national audit office: health focus summer 2005 · guidelines to help people recognise and act...

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HealtH Focus

HealtH focus | issue one | summer 2005

HealtH focus | summer 20052

contents

Welcome 3

SavingMoreLives 4

HospitalAcquiredInfection 5

EmergencyCare 6

NHSDentistry 8

PatientChoice 9

ImprovingthePatientJourney 10

TheNHSCancerPlan 11

InnovationintheNHS 12

NHSFinances 13

Norfolk&NorwichPFIHospital 14

Forthcomingreports 15

Whatelse? 16

SteeringGroup 17

NAOPFIWorkshops 18

WHat’s neW?Sinceourlastbriefing,wehavepublishedtenreports,allofwhichareavailablefromourwebsite(www.nao.org.uk).Thewebsitealsocontainsotherinformationyoumayfindofinterestsuchastheresultsfrommanyofthesurveysweundertooktosupportourfindings.ThefollowingareaseriesofbriefsummariesofthetenreportspublishedinthepastyearalongwithkeyrecommendationsfromtheCommitteeofPublicAccountsreportifonehasbeenpublishedorkeyrecommendationsfromtheNAOreportifnot.TheCommitteeofPublicAccountsreportscanbefoundinfullontheirwebsite(www.parliament.uk/parliamentary_committees/committee_of_public_accounts.cfm).

WelcomeWelcometothisfirstissueofNAOHealthFocus,whichreplacesourpreviousChiefExecutivebriefing.Itsetsoutwhatwehavebeendoingoverthepastyearandwhereweareheadinginthefutureandwehopeyouwillfindithelpfulandinformative.ItwillalsoletyouknowsomeoftheimportantrecommendationswehavemadethatmayaffecttheareaoftheNHSthatyouareinvolvedin.

MuchhashappenedintheyearsincethelasteditionofthisbriefinginSpring2004.WehavepublishedsevenhealthvalueformoneystudiesandtwostudiesonPFIandPPParrangementsinthehealthsector.ManyofourreportshavebeenexaminedbytheCommitteeofPublicAccounts,theseniorselectcommitteeoftheHouseofCommons,whichproducesitsownreportandrecommendationsthatthegovernmenthavetorespondtointheformofaTreasuryMinute.Fullcopiesofthesereportsandrelatedmaterialsareavailablefromourwebsite(www.nao.org.uk)andthewebsiteoftheCommitteeofPublicAccounts(www.parliament.uk/parliamentary_committees/committee_of_public_accounts.cfm).WehavealsohostedconferencesonhealthandsafetyintheNHSandcancercareandspokenaboutourreportfindingsatnumerousevents.IhopesomeofyouhavebeenabletoattendtheseeventstoseeforyourselvesthepositivecontributionwearemakingtoNHSorganisationsandthedeliveryofpatientcare.

OneimportantrecentdevelopmentthatwebelievewillgenuinelybenefitNHSorganisationsistheJune2004Concordatagreementbetweentheorganisationswithresponsibilitiesforinspecting,regulatingandauditinghealthcare.Theaimsoftheagreementaretodeliveramoreconsistentandcoherentprogrammeofinspection,toimproveservicesforpatients,clientsandtheircarersandtoprovideamoreeffectiveapproachtoauditandinspection.WearesignatoriestotheConcordatand,asamemberofeachoftheConcordatworkinggroups,weareactivelyinvolvedinhelpingtodeliveritsaims.Youshouldbegintonoticetheresultsoverthecomingmonthsandyears.

WehaverecentlyundergonesomeimportantchangeswithintheNAO.Mostnotablymypredecessor,JeremyColman,hasbeenappointedasAuditorGeneralforWales.IhavetakenoverJeremy’sroleofAssistantAuditorGeneralwithresponsibilityfortheDepartmentofHealthandPFI/PPP.Iamreallyexcitedbythejointchallengeswefaceinmodernisingthehealthsectorandlookforwardtomeetingmanyofyouoverthecomingmonths.HereattheNAOwehavewelcomedChrisShapcotttotheteamasaDirectorofHealthVFMalongsideKarenTaylor.ChriswillalsohavesomeresponsibilityforPFIwithJamesRobertson.

Finally,asalways,wewelcomeyourinputandideasforareasthatyouthinkweshouldexamine,andwearekeentorespondtoyourneeds.IfyoufeelanNAOexaminationcouldimprovethedeliveryofaservice,helpidentifyandspreadgoodpracticeorhighlightareasofconcern,wewouldliketohearfromyou.Pleasedonothesitatetocontactmedirectlyatanna.simons@nao.gsi.gov.uk.

Anna Simons Assistant Auditor General

welcome

summer 2005 | HealtH focus �

HealtH focus | summer 2005�

value for money reports on HealtH issues

ThereportfoundthatcancerpatientsareincreasinglysurvivingthediseaseasaresultofthenewinitiativeslaunchedbytheDepartmentofHealthandtheNHSoverthelastdecade.Therecordedincidenceofcancerhasgrownby31percentsince1971,partlyduetomorecomprehensivedatacollectionandpartlyduetolifestyletrendssuchassmokingandincreasedexposuretosunlight.However,survivalratesareupanddeathrateshavefallenby12percentinthelast30years,althoughprogressvariesbytypeofcancer.

TheNHSneedstocontinuetodomoretoensureallpatientsaretreatedswiftlyandappropriately.Delaysindiagnosisareacontinuingproblemandtherearestillinequalitiesintheavailabilityofsometreatments,suchasapproveddrugs,andintimelyaccesstootherinterventions,suchasradiotherapy.ThereportcalledfortheDepartmenttoworkwithgroupsofpatientswhoarediagnosedwithcanceratanadvancedstageinordertounderstandwhytheydidnotseekmedicaladviceearlierandsoactioncanbetakentoencouragemorepatientstocomeforward

earlierwithsymptoms.ThosemoststronglysuspectedbyGPsofhavingcancerarenowassessedpromptly,butasignificantproportionofthosewithcancerhavenotbeenreferredurgentlyandhavethereforehadtowaitanumberofweekslongerforassessmentbyaconsultant.

TacklingcancerinEngland:savingmorelives(March2004)

saving more lives

the committee of public accounts report’s recommendations include:

n TheDepartmentshouldpublicisesomesimpleguidelinestohelppeoplerecogniseandactonappropriatesymptomsformajorcancers;

n ActionisneededtohelpGPsimprovetheirabilitytoidentifysymptomaticpatients;and

n Adeadlineshouldbesetforendingthecurrentwidevariationsinprescribingofanti-cancerdrugssuchasHerceptin.



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1 TheManagementandControlofHospitalAcquiredInfectioninNHSAcuteTrustsinEngland(HC230Session1999-2000).

Hospital acquired inFectionImprovingpatientcarebyreducingtheriskofhospitalacquiredinfection:aprogressreport(July2004)

Thebestavailableestimatessuggestthateachyearmorethan300,000patientsacquireaninfection,around5,000dieasaresult,ourMRSAratesareamongsttheworstinEuropeandhospitalacquiredinfectionscosttheNHS£1billion.Ourreport,whichwasafollowuptoourreportin20001,showedthatthereisstillalackofrobustcomparabledataoninfectionrates,otherthanMRSAbloodstreaminfections,andtheinformationthatisavailablesuggeststhatratesareincreasing.Theemergenceofstrainsofmulti-resistantbacteriahasincreasedthecomplexityofmanagingandcontrollinginfection.

Whilsttherehasbeennotableprogressinputtingthesystemsandprocessesinplace,widerfactors,suchashighbedoccupancyrates,continuetoimpedegoodinfectioncontrol.Therearewidevariationsincompliancewithgoodinfectioncontrolpoliciesandprocedures,forexample,onantibioticprescribing,handhygiene,cathetercareandenvironmentalcleanliness.Staffremainconcernedaboutthelackofsuitableisolationfacilitiesandtheincreasedfrequencywithwhichpatientsaremovedwithinhospitalsandthatthereisinsufficientseparationofelectiveandtraumapatients.PatientscontinuetohighlightconcernsaboutstandardsofcleanlinessandtheriskofMRSA.

Sincepublicationofourreport,HealthministershavemadeitatoppriorityforhospitalstoimprovecleanlinessandlowerbothhealthcareacquiredinfectionandMRSArates.Inparticular,theyhaveintroducedatargetforallNHStruststoreduceMRSAbloodstreaminfectionratesby50percentby2008.


n NHStrusts’implementationoftheseDepartmentalcleanlinessinitiativesshouldbeevaluatedbyanannualsurveytoseethattheyareactuallyimprovingcleanlinessonthewards.Alltrustsshouldalsoputinplacemeasurestoensurethattheytellpatientswhattheycanexpectandthattheyobtainpatientsviewsonwardcleanliness.TheDepartmentshoulddeterminewhetherhygieneassessmentsandcleaningmethodsusedbythefoodandhospitalityindustriescouldimproveconsistencyandreducethesubjectivityofcleanlinessassessments.

n StrategicHealthAuthoritiesshouldensurethatallNHSTrustshavecarriedoutariskassessmentoftheirisolationfacilities,inlinewithHealthandSafetylegislation,andworkwiththemtodetermineatimetableandresourcingstrategytoaddressidentifiedshortfallsinrequirements.

paGe titlevalue for money reports on HealtH issues


In2000,inresponsetopatientconcerns,theDepartmentsetarangeofemergencycareaccesstargetsintheNHSPlan.Some16millionpeoplenowuseemergencycareserviceseachyearwitharound13millionattendingAccidentandEmergencydepartmentsinacutehospitals,andnumbersarerising.AsaresultA&Edepartmentsareeffectivelythe“shopwindows”oftheNHSformanypeople.Thekeyperformancemanagementtargetwastoreducethetimespentfromarrivaltoadmission,transferordischargetolessthan4hoursfor98percentofpatientsbytheendof2004.

ThereportfoundthatNHStrustshaveachievedalargeandsustainedreductioninthelengthoftimepatientsspendinA&Edepartments,largelythroughimprovedworkingpractices.However,thereisroomforfurtherimprovement,particularlyforpatientswithmorecomplexneeds(whoincludemanyolderpeopleandthosewithmentalhealthneeds)whoaremorelikelythanotherstostaymorethanfourhoursinA&E.Patients’responsestothenewopen-accessminorinjuryandillnessproviders,suchasthe81NHSWalk-inCentres,havebeengenerallypositiveandattendancescontinuetorise.However,theseservicesaremainlyaddressingpreviouslyunmetneedratherthanreducingdemandonA&E.Therelativecost-effectivenessofthealternativeemergencycareprovidershasnotbeenestablished.

Morethan50%oftrustshadshortfallsinthenumbersofemergencycaremedicalstaffneededtoprovidearobustandresponsiveservice24hoursaday,sevendaysaweek.Insomecases,thedesignofA&Ebuildingsisnotflexibleenoughtofitwellwithmodernisedworkingpracticesandtopromoteamoreefficient,patient-orientatedenvironment.Asameansofsecuringthenecessaryintegrationofservices,EmergencyCareNetworksareapromisingdevelopment,thoughmanyareintheirinfancyandlacktheauthorityandfundingtobringaboutco-operationacrossthevariousemergencycareproviders.

emergency careImprovingemergencycareinEngland(October2004)


n TheDepartmentshouldclarifythemethodologyforcomputingcostssothatstrategicplannersforemergencycareservicescanestimatetherelativeunitcostsofthedifferentprovidersandassesstheimpactonexistingorganisationsifchangesinserviceprovisionaremade.EmergencyCareNetworksshouldbegivenresponsibilityforreviewinglocalpatternsofdemandcomparedtosupplyandemergencycareservicesshouldbecommissionedaccordingly.

n TheDepartmentshouldmakedataavailabletoallemergencycareproviderssothattheycanbenchmarktheirperformanceandmonitortheirprocessestoensurethatolderandmorevulnerablepatientsspendnomoretimeinA&Ethanisclinicallynecessary.IncollaborationwithotherNationalDirectors,particularlytheOlderPeople’sCzar,theNationalDirectorforEmergencyAccessshouldpromoteactiontoidentifywaysofreducingtheneedforcrisisemergencycarefortheelderlyandthosewithmentalhealthproblems.

n Toreducevariationsinpatients’experienceofA&Eservices,NHSacutetrustsshoulddrawonapproachesusedbythehighestperformingdepartmentsandhospitals.Theseincludewideningstaffresponsibilityforinitialinterpretationofx-rays,usingup-to-dateequipmentindiagnosticservicesandmakinguseofDepartmentalchecklistsforbedmanagementandaccesstospecialistopinion.

paGe titlevalue for money reports on HealtH issues



Mostofthe23,000dentistsinEnglandprovidebothNHSandprivatedentistryservices,butoverthelasttenyearstherehasbeenanincreaseinthenumberofpatientsexperiencingdifficultiesinaccessingNHSdentistry,asmanydentistsreducedtheircommitmenttotheNHSanddevelopedtheirprivatework.

In2003-04totalexpenditureondentistryinEnglandwassome£3.8billion,ofwhich£2.3billionwasaccountedforbytheNHSandanestimated£1.5billionbyprivatedentistry.TheNHSrecovered£0.5billionofthisexpenditurefrompatientcharges.Formorethanadecadetherehasbeenpressureforreformofthedentalremunerationsystem,inwhichdentistsarepaidperitemoftreatmentprovided,mainlybecauseithastendedtoencourageintervention,ratherthanpreventionasfavouredbymoderndentistry.

In2003majorchangeswereannouncedinwhichPrimaryCareTrustswillberesponsibleforcommissioningNHSdentalservicesinresponsetolocalneeds,includinghavingmoreinfluenceoverwheredentalpracticesarelocatedandasimplifiedpatientchargeregime.TheDepartmentsetanApril2005targetdateforimplementation,subsequentlydeferreduntilOctober2005.OurstudyacknowledgedthatthereisastrongrationaleformodernisingNHSDentistrybuttherearesignificantrisksthatwillneedtobemanagedifthenewarrangementsaretobeeffectiveandprovidevalueformoney.Inlightofourreport,theDepartmenthave

acknowledgedthattheyneedevenmoretimetoimplementthenewcontractingarrangementsandhavedelayedtheirintroductiontoApril2006.TheyarealsoprovidingnewguidanceandadditionalsupportforPrimaryCareTrusts.

nHs dentistryReformingNHSDentistry:ensuringeffectivemanagementofrisks(November2004)



n TheDepartmentwillneedtopayverycloseattentiontotheresultsoftheirconsultationondentalchargingiftheyaretoemergewithasystemwhichcommandstheassentofallparties.TheDepartmentwillalsoneedtoconsiderhowtomitigatetheriskthatthechangesinthechargingsystemcouldcreateincentivesfordentiststoofferprivatetreatmenttopatientsatalowercostthantheNHSchargeleadingtoafallintheincomethattheNHScanrecoupfrompatientcharges.

n EveninmoreaffluentareaspatientsmayexperiencedifficultiesregisteringforNHStreatmentsasdentistshavereducedtheircommitmenttoNHSdentistry.Iftheyaretocommissiondentalserviceseffectively,StrategicHealthAuthoritiesandPrimaryCareTrustsneedtoimprovetheirunderstandingofbothneedanddemandforlocalNHSdentalservicesthroughmodellingtherequirementsoftheirlocalhealtheconomies.


TheDepartmentofHealthhassetthetargetthat,byDecember2005,eachNHSpatientreferredbytheirGPtohospitalfornon-emergencytreatmentwillbeabletochoosebetweenfourorfivehospitalproviders.Underthissystem,patientswillbeabletochoosefrombothNHSandindependentsectorproviders.KeyissuesfortheimplementationofthistargetincludingtheengagementofGPsandtherollingoutoftheChooseandBookinformationtechnologydeliverysystem.

Thereportfoundthatprogresshasbeenmadetowardsdeliveringchoiceatreferralthroughestablishingtherequiredorganisationalinfrastructure,commissioningnewITsystemsandmodifyingexitstingonesandprovidingsupportfortheNHSorganisationsthatwilldeliverit.However,thereisariskthatstaffinthehealthservice,particluarlyGPs,arenotfullyengagedwiththeprogramme.TheDepartmenthasanengagementplantoaddresstheseconcerns.Choiceisbestdeliveredthroughelectronic

booking,althoughthiswillnotbeavailabletoallpatientsbythetargetdateofDecember2005.TheDepartmentistakingstepstoensurethatallpatientswillbeabletochoosetheirproviderbythetargetdate,andthattheelectronicbookingsystemisputintoplaceassoonaspossible.

patient cHoicePatientChoiceatthePointofGPReferral(January2005)



the nao report’s recommendations include:

n TheDepartmentshouldpressonurgentlywithitsplansforinformingGPsabouttheimplementationofchoiceatreferralanditsimpactonGPsandpatients;and

n TheDepartmentshouldkeepunderregularandclosereviewtheprogressofitsplannedimplementationofchoicethroughimplementinge-bookingandconsiderthescopeforacceleratingtheroll-outofe-bookingtomakeitavailableeverywherebyDecember2005.

Patients’experiencesofcancerservicesinEnglandin2004havebroadlyimprovedonthesituationin2000,whentheNHSCancerPlanwasintroduced.InasurveycarriedoutbytheNAO,coveringthepatientjourneyfromfirstappointmentwiththeirGPthroughtosupportinthecommunityfollowinghospitaldischarge,cancerpatientsweremorepositiveaboutcancerservicesthanthoserespondingtoasimilarsurveyin2000.

Overall,thereportfoundencouragingprogresshadbeenmadeinmostrespectsofthepatientexperience.However,foraminorityofpatients,thefollowingelementsofthepatientexperiencewerestillnotasgoodastheymightbe:

communicatinginformation,symptomrelief,linkstoself-helpandsupportgroupsandthelackofoptionsforsomepatientsintheirlastdays.

Despitethegenerallypositiveresults,certaingroupsofpatientswerelesssatisfiedthanothers,notablypatientsinLondonandthosewithprostatecancer.


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improving tHe patient JourneyTacklingCancer:ImprovingthePatientJourney(February2005)


n TheDepartmentshouldensurethatallpartsoftheNHShaverobustplansfortheimplementationofbestpracticeguidanceincancerpatientcareinthreeyears.


summer 2005 | HealtH focus ��

OurreportfoundthattheNHSCancerPlan,publishedinSeptember2000,isbroadlycomprehensive,impressiveinitscoverage,andwellregardedbycancernetworks,theorganisationsestablishedtobringtogetheralllocalcancerservices.TherearewaysinwhichthestrategyfortacklingcancerinEnglandcouldbeimproved,however,anddecisionsneedtobetakennowonhowtoupdateandbringtogetherallelementsofthecurrentcancerstrategyinaunifiedwaythatensuresitremainsthecentralguidingapproachforimprovingcancerservicesandoutcomes.

tHe nHs cancer planDepartmentofHealth:TheNHSCancerPlan-AProgressReport(March2005)


n ThattheNationalCancerDirectorshouldcontinuetoconsiderwhatchangesarenecessarytothecancerstrategyandthattheDepartmentshouldpublishprogressagainstkeycanceroutcomes;

n ThattheDepartmentensuresthattherolesofcancernetworkconstituentorganisationsareclearlydefinedandadheredto;

n ThatStrategicHealthAuthoritiesshouldensurethatcancernetworkshavethenecessaryresourcesrequiredforaneffectiveandsustainableperformance;and

n Cancernetworksshouldhaveappropriateplanningarrangementsinplace.


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Although90percentofpatientcontactwiththeNHSisforprimarycareservices,investmentinprimarycarehashistoricallybeeninadequateandpiecemeal.Mostpublicsectorhealthinvestmenthasbeenchannelledintohospitals.Asaresult,thequalityofprimarycarebuildingsisoftenpoor.Toaddresstheseissues,theDepartmentofHealthannouncedin2000amajornewinitiative–theestablishmentofNHSLocalImprovementFinanceTrusts(LIFT)todevelopprimaryandsocialcareservicesandfacilitiesinEngland.OurexaminationaddressedwhetherLIFTisasuitableprogrammetosupportimprovedcommunity-basedhealthservicesthatmeetlocalneedswhileprovidingvalueformoney.ThereportisverypositiveaboutthebenefitsoftheinnovativestructureofLIFT-particularlytherequirementthatprojectsareagreedinthecontextofalocalstrategicplanandtheflexibilityitallows–butgoesontocallforstrengtheningofaccountabilityandperformancemeasurementframeworks.

innovation in tHe nHsDepartmentofHealthInnovationintheNHS:LocalImprovementFinanceTrusts(May2005)


n Whenplanninganewinitiative,asystematicapproachtoevaluatingadvisoryfirmsandthequalityofcontributionsfromindividualadvisorsshouldbeestablished.Thiswouldhelpachievegoodqualityadviceandvalueformoney.

n EffectivereviewsofStrategicServiceDevelopmentPlansforLIFTschemesshouldbeundertakenregularly,inaccordancewithPartnershipsforHealthguidance.

n Guidanceabouttheinitiativeaimedspecificallyatkeygroupsofstakeholders(inthecaseofLIFT–clinicians,LocalAuthorities,PrimaryCareTrustseniormanagementandsecondaryandacutecarecolleagues)shouldbedevelopedanddisseminated.

n Inthelightofexperience,itnowseemsthattheaccountabilityframeworkofLIFTcouldusefullybestrengthened.ItwouldbebeneficialfortheDepartmenttoestablishprinciplesanddevelopguidancedefiningresponsibilityforlocaloversightoftheStrategicPartneringBoard.



nHs FinancesFinancialManagementintheNHS(June2005)

OurjointreportwiththeAuditCommissionfoundthatthattheDepartmentofHealthachievedfinancialbalanceacrossthe600localbodiesoftheNHSin2003-04.However,comparedwith2002-03,thenumberofbodiesfailingtoachievefinancialbalanceincreasedandtherewasalsoanincreaseinthenumberofbodiesincurringsignificantdeficits.Theforecastpositionfor2004-05isthattherewillbemoreNHSbodiesfacingadeficit,withtheNHSasawholenotbreakingeven.

Thereportconsidersfourkeythemesforimprovingfinancialmanagement:theroleoftheBoard,betterandearlierforecastingofthefinancialposition,earlierpreparationandauditofaccounts,andtheneedforgreatertransparencyoftheuseofnon-recurrentfunding.

TheroleoftheBoardisparticularlycrucialasthereportconsidersanumberofrecentexamplesofbodiesincurringsignificantdeficitsandtheconsequencesofineffectiveoversightorlackoffinancialacumenatBoardlevel.

Thereportalsobrieflyconsidersfuturedevelopments.2003-04wasarelativelystableyearintermsofchallengesfacingNHSfinancialmanagementbut,despitethis,anumberofbodiesfounditdifficulttomanageresourceseffectively.ReformsintheNHSmeanthattherewillbeincreasingfinancialchallengeswhichbodieswillbeexpectedtomanage.PrimaryCareTrustsandNHSTrustswillneedtofurtherimprovetheirskillsaroundthestrategicaspectsoffinancialmanagementtocopewithfinancialforecastingandmodellingunderPaymentbyResults,inparticulartheidentificationandmanagementofthenewrisksthatthesystemwillbring.Increaseduseofindependenthealthcareproviderswillfurtherintensifytheuncertaintyaboutincomelevelsandhighlighttheneedforbetterfinancialmanagement.NHSTrustswillalsoneedtodevelopappropriatecommercialfinanceskillstobeinasoundpositiontoapplyforFoundationTruststatus.


n TheNHSAppointmentsCommissionappointindividualssothatallBoardsincludenon-executiveswiththeappropriatefinancialmanagementskillsandexperience;

n Boardmemberstakecollectiveresponsibilityforfinancialmattersandareabletounderstand,effectivelychallengeandactonthefinancialinformationpresentedtothem;

n FinanceDirectorsandChiefExecutivespresenttheBoardwithfocusedandtimelyfinancialinformation,clearlyshowingtheoverallfinancialpositionandhighlightingtheimportantissuesthatrequireactionatBoardlevel;and

n Whereabodyincursadeficit,theBoardshouldsatisfyitselfthatthereasonsforthefinancialdifficultiesareunderstoodandthatarealisticrecoveryplanisinplacewhichtacklesthedifficulties,andshouldmonitorprogressagainsttherecoveryplan.

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ThiswasoneofthefirstPFIhospitalcontractswhenitwasletinearly1998.TheprivatesectorconsortiumOctagonrefinancedthePFIcontractin2003whichledtofinancialgainsof£116millioninnetpresentvalueterms.OctagonsharedwiththeTrust£34million,around30percentofthegains,undertherefinancingcodeforearlyPFIdealswhichtheTreasuryhadagreedwiththeprivatesector.

TheNAOreportconsideredwhetherthegainsaccruingtotheprivatesectorfromtherefinancingindicatedtheTrustcouldhaveimprovedtheoriginalPFIdealandhowthepricetheTrustispayingforthedealfollowingtherefinancingcompareswithcurrentPFIhospitaldeals.

ThereportconcludedthatthetermsoftheoriginalbankfinanceappearinlinewithotherearlyPFIdealsbutsubsequentimprovementsinPFIfinancingtermsmeanthattheNHSTrustcontinuestopayapremiumonthefinancingcostscomparedtocurrentdeals.ThereareotherfactorswhichmayaffecttheoverallcomparisonoftheTrust’sdealwithcurrentPFIdealsincludingthefactthatthebenefitsofanewhospitalhavebeenreceivedearlierthaninmanyothercommunitiesandthehighratesofrecentconstructioncostinflationhavebeenavoided.ItmighthavebeenpossiblefortheTrusttohaveimprovedtheoriginaldealwithgreatercompetitionandbetterdefinedrequirementsintheclosingstagesbuttheTrustisnotconvincedthiswouldhavebroughtaddedbenefitsasitsoughttocloseapathfinderdealwhichhadalreadybeenassessedasprovidingvalueformoney.

norFolk & norWicH pFi HospitalTheRefinancingoftheNorfolk&NorwichPFIHospital(June2005)


Key lessons of the nao report include:

n Refinancingproposalsinvolvingincreasedterminationliabilitiesorcontractamendmentssuchasextensionstothecontractperiodshould,inlinewithTreasuryguidance,besubjecttoarigorousvalueformoneyanalysisbeforereachingadecisiononwhethertoaccepttheproposals.Proposalstoincreaseterminationliabilitiesshouldbetestedagainstalternativesinvolvingnoincreaseincontractterminationliabilities;

n TheDepartmentshouldidentifytheeffectthatdifferentfactorsarehavingonthepricingofPFIhospitaldealsovertime.ThisanalysisofpricingmovementswillbehelpfultotheassessmentofbidsfornewdealsandtheevaluationoftheprogressofthePFIhospitalprogramme.TheanalysisshouldincludeidentifyingtheeffectonthepricingofPFIdealsofchangesin:

n Thenatureofdealsbeingenteredinto;

n Generaleconomicfactorssuchasconstructioncostinflationandcommercialborrowingrates;

n FactorsspecifictothePFImarketsuchasimprovedPFIfinancingtermsandanycostefficienciesfromtheincreasedexperienceoftheprivatesectorindeliveringPFIprojects.

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fortHcominG reports

Weareplanningtopublishanumberoffurtherstudiesintheverynearfuture:

n organisational learning to improve patient safety,whichfocusesonthequalityoftheNHS’strategyforensuringthatlessonsarelearntfromallrelevantpatientsafetyincidentsatbothlocalandnationallevelandtheprogressthattheNHSismakingtowardsimplementingthestrategy(tobepublishedAutumn2005).

n national programme for it in the national Health service,whichexaminestheprocurementprocessesusedforplacingthecontracts;whethercontractsarelikelytodelivergoodvalueformoney;howtheDepartmentisimplementingtheProgramme,andtheprogressmadebytheProgrammesofar(tobepublishedAutumn2005).

n pfi hospitals,whichwillevaluatetheperformanceofthe18firstwaveacutePFIhospitalsagainstcontractanduserneeds,andwillalsodrawoutlessonslearnedandgoodpracticeforlaterwaveschemes(tobepublishedAutumn2005).

n stroke care in england,whichexamineswhetherthequalityofstrokeservicesmeasureupagainstthecostsoftheillness.Itidentifiesthecriticalbarrierstoreceivingacutetreatmentandtopreventingstrokes,withparticularattentiontothemanyservicesandprovidersinvolved.Goodpracticeandbenchmarkingalsohighlightthepotentialtoimprovetheeffectiveness,economyandefficiencywithwhichstrokecareservicesaredelivered(tobepublishedlate2005).

n out of Hours serviceswilllookathowtherecentchangesinOutofHoursserviceswereimplementedandexaminethecostsandperformanceofthenewarrangements.ItwillalsoidentifyareasofgoodpracticewherePrimaryCareTrustsareinnovatinginordertocreatemorepatient-focusedandintegratedservices(tobepublishedearly2006).

n the use of bank and agency nurses in the nHs,whichwillfocusonwhethertheNHSismanagingitsuseofbankandagencynursesinthemosteconomicandeffectivemanner,coveringbothplanning,procurementanddeploymentoftemporarystaffandwhetherthewaycoverisarrangedrisksunderminingthequalityofpatientcare(tobepublishedSpring2006).

n improving Quality and safety: progress in implementing clinical Governance in primary carewillexaminewhetherpatientcareandpatientexperienceshavebeenimprovedthroughimplementingtheclinicalgovernanceinitiativeinPrimaryCareTrusts.Thestudywill:reviewthearrangementsinplacetohelpensureeffectivestrategicmanagementofclinicalgovernance;evaluatewhetherPrimaryCareTrustsareinformedaboutprogressinimplementationofclinicalgovernance;andidentifywhetherTrustsareachievingimprovementsinthepatientexperienceandthequalityofcaredeliveredtopatients(tobepublishedSpring2006).

Furtherdetailsofourforthcomingstudiescanbefoundonourwebsiteathttp://www.nao.org.uk/publications/workinprogress/wipindex.asp.Thesereportswillbemadeavailableonlinewhentheyarepublishedandyouwillbesentacopyforyourinterest.

Foranumberofthesestudies,wewillberequestingyourassistanceinprovidingevidenceforourreport.Weexpecttosendoutsurveysandquestionnairesoverthecomingmonthsonsubjectssuchasoutofhoursservices,PrimaryCareTrustclinicalgovernanceandtemporarystaffingarrangements.Mindfuloftheneedtoreducetheauditburdenandawareofourresponsibilitiesundertheconcordat,weareworkinghardtoavoidduplicationofotherauditandinspectionbodiesandtoaskonlyforinformationthatisabsolutelyvitaltoourwork.Inreturnforyourcooperation,wewillensurethatyouwillbeprovidedwithimportantbenchmarkdataandotheroutputstohelpimprovethequalityofserviceprovision.

FortHcoming reports

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WHat else?

promotinG Good Governance in tHe nHs

Whilethepublicationofourvalueformoneyreportsformsthecoreofourwork,itisbynomeansallwedo.Youmayhaveseenusspeakatconferencesontopicssuchascancercareorhospitalacquiredinfection.Asfollow-upworktoourpublishedreportonDentistryandourforthcomingreportonStrokeCareweplantoorganiseconferencesonthesetopicsforJanuaryandFebruary2006.ThiswillgiveusanopportunitytotakeourworkforwardintopracticalsolutionsforNHSorganisations.Youmayalsohavereceivedoneofourdetailedindividualfeedbackreportsfollowing‘ASaferPlacetoWork,’astudyofhealthandsafetyintheNHSandwewillbeprovidingsimilarreportsforourstudyonpatientsafety.SomeofourworkmaybelessvisiblebutneverthelesshasgreatimpactontherunningoftheNHSorindividualtrusts.Herewehighlightoneofthesestrandsofwork:

PromotingGoodGovernanceintheNHSIn2000,theNAOwasaskedtochairanefficiencyreviewatthemainNorthernIrelandTeachingHospitalinBelfast.Followingthis,in2002,theLeedsTeachingHospitalsTrustheardoftheworkandaskedustoleadasimilarprocessinLeeds,thebiggestTrustintheNHS.WehaverecentlystartedasimilarprocessincentralManchester,workingwiththeTrust,PrimaryCareTrustsandStrategicHealthAuthority.

OurroleistosupporttheNHSTrustinbenchmarkingitsactivitiesandthen,bychallenge,toworkwiththeTrusttodeveloprobustactionandsavingsplans,providingindependentassuranceontheTrust’sprogresstoaSteeringGroupofkeystakeholders.WedonotsetsavingstargetsbutwehelptheTrustdeliversavingsbyprovidinganobjectiveviewandidentifyingriskstoprogress.InManchesterwehaveextendedthisroletocovertheevaluationofdemandmanagementinprimarycareandtheaffordabilityandimpactofsuchschemesonthelocalhealtheconomy.TheultimategoalisthefinancialstabilityoftheTrustthroughefficiency-basedsavings,whilemaintainingorimprovingthedeliveryofhealthcaretopatients.Throughthiswork,wehavedevelopedapowerfulmodelforbringingrigourandrealismtoTrusts’financialrecoveryplans.Wemakeexplicitthelinkbetweenfinanceandperformance.Theprocessisnotaboutjustsavingmoney,butaboutspendingmoneymoreefficientlyandusingbenchmarkingandgoodpracticetochallengeunderperformance.Italsoseekstobuildstrongerrelationshipsbetweensuspiciousorevenhostilepartnersinthelocalhealtheconomy.

BeforecarryingoutanysuchworkwesecuretoplevelsupportfromtheDepartmentofHealthandchiefexecutivesofthelocalhealthcommunityandourroleasindependentscrutineerisagreedbyallparties.InBelfast,theprocessdeliveredrecurringfinancialsavingsof£5millionoverfouryearsandinLeedsitdelivered£19millionoverthreeyears.Wealsohelpedtodeliversignificantculturalandmanagementchangearisingfromthebenchmark-basedchallengetoperformance.


worK on tHe paddinGton HealtH campus scHeme

SteeringGroup–PaddingtonHeathCampusScheme:ReportoftheSteeringGroupTheprojectedcostsofthePaddingtonHealthCampus(PHC)schemeescalatedfromanestimated£360millionwhentheOutlineBusinessCasewasapprovedin2000toover£800millioninmid-2003.Inlate2003theTreasuryrequestedanindependentreviewoftheprocessthatledtothesituation.AtthesametimetheNAOreceivedcorrespondencefromanMPrequestinganinvestigationoftheescalatingcostsandoverallmanagementofthePHC.

AjointSteeringgroupwassetuptoinvestigateconsistingofrepresentativesfromtheDepartmentofHealth,theleadStrategicHealthAuthority,theTreasuryandtheNAO.Theirreport(September2004)foundthattherehadbeenshortcomingsinthewaythePaddingtonHealthCampusschemewasrun,reflectingchangingandinadequategovernancearrangements,theabsenceofagreedaffordabilityenvelopesandinsufficientfundingfortheProjectTeam.Itmadeanumberofrecommendationsongovernanceofthescheme;theidentificationofoptions;theestablishmentofanaffordabilityenvelope;thedevelopmentofmodelsofcare;andhavingasingleclientforthescheme.AnewOutlineBusinessCasewastobepreparedbyChristmas2004.

ThePHCschemewascancelledbytheNorthWestLondonStrategicHealthAuthorityinJune2005aftertheNHSTrustsinvolvedcouldnotagreeonthewayforward.

OtherReportsWehavealsorecentlyproducedarangeofreportsthatmaybeofinteresttohealthprofessionals,onissuessuchasworkingwiththeThirdSector,citizenredress,homelessnessanddeliveringpublicservicestoadiversesociety.

Fulldetailsofthesereportsandotherscanbefoundat:http://www.nao.org.uk.



TheNAOisabletomakeavailablethefollowingworkshopswhichenablePFIprojectteamstoexplorefurtherPFIissuesrelevanttotheirprojects:

n managing pfi relationships to achieve success–aonedayworkshop,focussingonrelationshipissuesbetweenpublicauthoritiesandtheirPFIcontractors.Thisworkshop,whichhasalreadybeenattendedbyanumberofNHSTrusts,includespresentationsfromprojectsintheiroperationalphaseandanexpertonbuildingbusinessrelationships.

n pfi/ppp financing –understandingthekeyissues–aonedayworkshopexplainingthedifferenttypesofprivatefinanceandissueswhichthepublicsectorneedtofocuson.Refinancingandothercurrentfinancingdevelopmentswillbecoveredduringtheworkshop.

nao pfi worKsHops

nao pFi WorksHops

n pfi : senior management briefing–ahalfdayworkshopforseniorofficials,particularlythosewhomaybenewtoPFI,givinganoverviewoftheimportantissueswhichseniormanagementneedtobeawareofwhentheirorganisationsareembarkingonaPFIproject.

Eachworkshopisnormallyrunexclusivelyforoneindividualprojectteamtoenablethatteamtomaximisetheopportunitiestodiscussissuesrelevanttotheirproject.Thefinancingworkshopmayalsoberunfromtimetotimeforagroupofofficialsdrawnfromdifferentprojects.ThemanagingPFIrelationshipsworkshopiseitherrunforthepublicsectorsideontheirownor,asmaybehelpfuloncetheprojectisoperational,withtheprivatesectorsidealsoinattendance.Ifinterested,pleasecontactDavidFinlayat:[email protected].


nao pfi worKsHops


contact detailsthe national audit office is always interested in hearing from people about our work. if you would like to discuss our work in more detail or have suggestions for future work, please contact:

Chris Shapcott, Director, Health VFM 020� �� [email protected] or

Karen Taylor, Director, Health VFM 020� �� [email protected]

HelpingthenationspendwiselyTheNationalAuditOfficescrutinisespublicspendingonbehalfofParliamentTheComptrollerandAuditorGeneral,SirJohnBourn,isanofficeroftheHouseofCommons.HeistheheadoftheNationalAuditOffice,whichemployssome800staff.He,andtheNationalAuditOffice,aretotallyindependentofthegovernment.SirJohncertifiestheaccountsofallgovernmentdepartmentsandawiderangeofotherpublicsectorbodies,andhehasstatutoryauthoritytoreporttoParliamentontheeconomy,efficiencyandeffectivenesswithwhichdepartmentsandotherbodieshaveusedtheirresources.

Ourworksavesthetaxpayermillionsofpoundseveryyear;currentlyatleast£8forevery£1spentrunningtheoffice.

OneofthekeyelementsoftheNationalAuditOffice’sindependenceisourabilitytodecideourownworkprogramme.

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uk national audit office: health focus summer 2005 · guidelines to help people recognise and act...

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