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PPP Practitioners’ Group

Payment Mechanism

Presented by

Donna Stevenson – Scottish Futures Trust


Overview

• Key Features of NHS Standard Contract pre NPD/Hub

• Individual contracts will differ

• Early Contracts will vary substantially

• Key Interface with Services Specification

• Energy Target and Sharing Provisions

• Discussion of Boards’ Key Issues


Annual Service Payment

Formula

Indexation

Underlying indexation of some costs in the model may vary: impact on Variations

Provisions for further variance of the service payment

Maximum monthly deductions: Volume Adjusted Service Payment (ie excludes deductions, pass through costs and some energy

adjustments)


Event

an incident ....

(a) not meeting the Service Requirements; or (b) not satisfying the Availability Condition

arises immediately prior to any Rectification Time

Repeated Rectification:Notwithstanding rectification occurs within the Rectification Time:• there is a Minor Performance failure for

- 3 Relevant Events during 3 consecutive Sessions; and/or- the fourth Relevant Events in any consecutive seven day period;

• Relevant Events must be related to the same service standard and occurring in the same Functional Area; and there is good reason to believe that the root cause of each Event is the same.

• Once over the threshold within the relevant period, there is a performance Failure for every Relevant Event


Performance Failures

an incident not meeting the Service Requirements; which has not been rectified within the relevant Rectification Time, if applicable

only one PF can occur per Performance Monitoring Period: reactive repairs usually per event

If not rectified within Rectification Period then Additional Period(s) run and further PFs can accrue

if no Rectification Time then there is an immediate Performance Failure (PF) and if not remedied within Remedial Periods further PFs accrue will still apply

Indexed amount applies per PF depending on category Tolerances for Minor Performance Failures


Availability Condition

• To remain Available, each area must continue to meet all of

the Availability requirements:

Accessibility Condition Safety Condition Use Condition and Prescribed Health Function Condition or, as appropriate, the Prescribed Operational Function Condition• Use Parameters and relevance of Room Data sheets • The area does not need to be unusable or unused-

continued use impacts on the amount of deductions• Annual review of weightings


Availability Deductions

Formula:

DP: Unavailable but Used

Minimum deduction will apply, including where the weighting for a unit is 0%

May be grouping of some units in the weighting table

Deductions are calculated only if the issue is not remedied within a Rectification Time (subject to repeated Rectification deductions)

Deductions are on a per sessions basis and there is a new Unavailability Event each session until the issue is rectified: impact on reporting failures

Re-commissioning

Potential for temporary alternative accommodation - must not be part of the Facilities for which the Board is already paying

DPUWAWASPn

D 1095


Temporary Repairs

Detailed procedure is in para 9 of Section C

PCo would need to inform the Board of proposal

Test : need for specialised materials or personnel that are not, and cannot reasonably be expected to be, immediately available at the Facilities

the Temporary Repair must

• satisfy the Minimum Agreed Availability Conditions and

• substantially make good the relevant Event

The Board can object if the use of the area will not be in accordance with generally accepted clinical practices or Good Industry Practice;

A deadline for the Permanent Repair must be made shall be agreed with the Permanent Repair

The Temporary Repair must be completed within the Rectification Time and the Permanent Repair within the agreed deadline for deductions to be avoided


Failure to Report

Failure to monitor or accurately to report :

• an Event, a Performance Failure, an Unavailability Event or an Ad-Hoc Service Request

• leads to an additional Medium Performance Failure or, in some circumstances an Major Performance Failure, for each failure

• the original deduction also applies


Rectification Time

The Rectification Time is stated in the Service Requirements

In some cases there is none and hence immediate deduction applies

The period commences

• Logged Event Time (notification to helpdesk)

• is extended if the Board denies access to the and in so doing prevents Rectification of that Event

Protocol for denying access is helpful


Excusing Causes

Events listed in clause 8.7

Includes Board breaches or deliberate act or omission (subject to important caveats) and planned preventative maintenance in accordance with the Schedule of Programmed Maintenance

Provides relief from deductions and Service Failure Points

Process in Clause 8.6 :

• must be claimed within 10 Business Days

• reasonable mitigation steps to be taken


Service Failure Points

Levels:

• Minor : 2

• Medium : 6

• Major : 20

• Availability : 20

Awarded for actual and deemed Performance Failures and Unavailability Events or Performance Failures subject to Relief Events and Force Majeure

Process for award (cl 29.3) and effect of replacing sub contractor Section G of Part 18)

Consequences:

• Warning Notices (clause 29.4)

• Increased monitoring (clause 29.5)

• Exercise of remedial rights (clause 29.6)

• Replacement of a non performing Sub Contractor (clause 44.6(b)(1))

• ProjectCo Event of Default (which can lead to termination) (see clause 44.1 (i))


Key Issues

Linkage to Services Specification and range of Performance Parameters

Helpdesk Usage Snaggings and Construction Defects Correct categorisation of incidents critical Implications for monitoring and reporting PMS report review, including verifying deductions calculations Helpdesk access and event filtering Trend analysis and link to lifecycle plan Temporary Repairs protocol Delay in access protocol Knowledge management and training of clinical and other users Availability champion/officer


Boards’ Key Issues

Discussion

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