Continuing Care Update

27th January 2010

By Christopher SparkAssistant Director of Procurement

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Regional Strategy

Phase 1 - Tactical activity conducting in depth examination of costs for our most expensive continuing care users. This activity has already delivered cash releasing savings for only 33 patients

Phase 2 - Introduce business service modelling by deploying lean supply principles to drive out wastage and better manage demand

Phase 3 – Commercial restructuring including market testing for all care groups, one of the primary aims is to adopt consistent commercial structures and commissioning arrangements for the region

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Phase 1 - Original Aim

• Financial pressures on PCT’s continuing to grow

• Increasing demand to provide nursing and residential care more cost effectively while retaining a level of service appropriate to each individual’s need

• Purchased Healthcare CMG agreed Continuing Care was a priority for procurement intervention

• Following a meeting last year with re:source and representatives from a number of East Midlands PCT’s, it was agreed that OLM would review 65 patients as part of a pilot

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Process – OLM Phase A

Intelligent costing data information service

The deliverable of this phase:• A full cost breakdown separately

identifying the care, management and support and non staffing costs

• A comparison of the true cost of care to the current fee levels incurred by the PCT and assess the cost effectiveness of those placements.

• Report on the outcomes of the review and make recommendations as to the scope for cost and efficiency savings

• Provision of the outputs from the investigations in an agreed electronic format and breakdown so that the PCT can use the data in the future

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Process – OLM Phase B

Negotiation

The OLM service then moves onto negotiation where most value can be added. The intention is to:• Undertake supplier negotiations for agreed identified cases which lead to new

agreed prices for the provision of services• This takes into consideration the needs of individuals

Step 1: Work Outline – Negotiation of revised rates or future uplift rates with Providers.

Rationale Delivery method

Negotiation of revised rates based on the true cost of care of each placement

Negotiation meeting with providers jointly attended by OLM, re:source and the PCT’s

Step 2: Work Outline – Agree new fee rates /arrangements for future uplifts

Rationale Delivery method

Following the negotiation meeting agree new contracts/variations to contracts

Meeting with providers jointly attended by OLM, re:source and the PCT’s

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Initial Results

• £197,000 confirmed cash releasing savings for 33 patients.

• Patients whom pose a risk or require further risk assessment have been identified

• Certain patients have been identified whom are in residential homes or independent hospitals may be ready to step down into more independent environments such as supported living

• A number of service users have been identified as needing to have their care plans reviewed as the needs have either increased or potentially decreased

• There is often a duplication of use of the multidisciplinary teams. Sometimes this is provided but not actually used by the individual service user yet is included in the service charge to the PCT

……Next tranche of cases, 294 high cost placements (annual spend of £30m) has the potential to deliver savings of £1.4m by 2010/11.

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Key Challenges

Data–Costing of care packages–Activity trends

IT –No automated processes

Processes

–Variations in recording care delivery, activity, goals of treatment and outcomes

Interaction–Patient User Groups–Local Authorities

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Observations

• Due to the lack of collaboration and high level of spot buying, this had led to inconsistencies across the region, a huge variation in rates, and has resulted in a highly driven provider market

• Quality of provision varies considerably and is not proportional to the size of the organisation

• There are examples of positive practice within the region

• Increased PCT involvement has helped negotiations and relationship building

• Venture capitalist backed providers are making up to 40% profit on individual placements

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Next Steps - Plan “B” and Plan “A”

Plan A – Individual contributions model• Not currently legal – but pilot studies exist• Probably legal by 2013• Long term plan to support patient choice agenda

Plan B – Approved provider list model• Legal• Good intermediate position • Anticipated implementation 2010/11

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PCT Clinical Need Assessment

City CouncilSocial NeedAssessment

Home selection

Suppliers

Payment

£ contribution ?

Funding DecisionYes / No

PCT

User

Provider

Other

Other agencies

Patients select from a list of approved suppliers

Approved List

Negotiation

Plan “B”

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Services / Pricing model

AWP Process

Older personOlder person/mental healthPhysical DisabilityMental HealthEnd of LifeLearning DisabilityBrain injury

PhysiotherapistPsychiatristMedicationContinence?????????

£x£x£x£x£x£x£x

£y£y£y£y£y£y£y

Can you provide the service shown at the stated rate?

Core services “Bolt ons”

Answers will be formatted Yes / No

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2.Set scope and participants

3.Sign off service specs & QMT

7. Advertise services; 8.Open AWP on BRAVO

Aug Sept Oct Nov Dec Jan2010

Feb MayApr

Go Live

4.Construct questions & framework of rates for AWP questionnaire

5.Design commissioners input process /support web pages

10.Evaluate

questionnaires

11.Summarise

findings

12.Inform Market who successful providers are

1.Evaluate provider market

Mar Jun Jul Aug Sep Oct Nov Dec Jan2011

6.Agree actual

participants

9.Run AWP provider forums

High Level – Project Plan

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Thank you for listening. Any Questions?