ITEM CA8
CABINET – 16 DECEMBER 2008
OXFORDSHIRE CARE PARTNERSHIP CONTRACT DEVELOPMENT AND UPDATE TO THE FINANCIAL MODEL
Report by Director for Social & Community Services
Introduction
1. In December 2001 the County Council signed a 25-year contract with the Oxfordshire Care Partnership (OCP) for the transfer of all the local authority owned care homes to the Order of St John’s Care Trust (OSJ) and Bedfordshire Pilgrims Housing Association (bpha), the core elements of the contract being to ensure a development programme for the buildings, the delivery of good quality care, the protection and maintenance of the workforce and the development of specialist services, preventative services and extra care housing.
2. Those care homes, which, at the time, would fail to comply with the Government’s minimum standards for registration after 2007 were redeveloped under Stage 1 of the Homes for Older People (HOPS) programme.
3. The remaining eight care homes and the services provided under the OCP contract now need to be redeveloped in light of suitability of the buildings, budget considerations, projected demographic changes, changing purchasing needs and the strategy of the Council towards maintaining people's independence in their own homes and minimising reliance on long-term care home placements. The 8 homes are subject to a programme being referred to as the stage 2 OCP contract redevelopment and comprise: · Lake House, Adderbury · Glebe House, Kidlington · Longlands, Blackbird Leys · Townsend House, Headington · Marston Court, Marston · Chilterns End, Henley-on-Thames · Mayott House, Abingdon · Stirlings, Wantage
4. Currently the 8 homes have approximately 340 full time equivalent (FTE) staff and provide 343 beds. Oxfordshire County Council (OCC) purchase a minimum of 222 beds in these homes at a gross cost of £6.2M p.a. and the remainder are provided for self-funding residents at an estimated income of £3.7M.
5. Stage 1 of the OCP contract redevelopment, which is nearing completion, has been a joint venture with OCP. Similarly, Stage 2 will continue to be a joint venture with OCP, responding to the financial and revised purchasing needs of the Council and giving OSJ an opportunity to develop services delivered via the OCP contract in a way which reflects on them as a market leader in their field.
6. The formal basis for the partnership agreement to examine the opportunities for the development of services is established in sections 29.1, 29.3.1 and 30.1.3 of the 2001 Project Agreement between OCC and OCP. The Project Agreement and the specific sections referred to have been reviewed by the Solicitor to the Council and he is in agreement with this assessment.
7. The Stage 2 redevelopment is also an opportunity to redesign the financial model for the contract, improving the way in which the value of the contract is calculated, monitored and evaluated.
8. This report outlines the need for a Stage 2 redevelopment programme, the case for redeveloping the financial model for the contract and the likely timescale and impact on people.
The Need for a Stage 2 Development Programme
The Buildings & Facilities
9. Despite conforming to the Government’s registration standards at the time of transfer to OCP in 2001, it is the view of both OCP and OCC officers that the remaining 8 care homes have an anticipated life of 5-10 years. The buildings have room sizes that are of current minimum size and lack en-suite facilities, communual areas are limited and facilities are not suitable for fully meeting the needs of people with higher dependency levels. This is in marked contrast to other new care homes being built in the County, which well exceed the current standards and are ‘future proofed’ to a significant degree. In addition, the physical condition of the properties need to be reviewed in light of both changing client expectations and the Council’s duties as a ‘good landlord’ to properties that may revert back to the Council in 2026.
Strategic Direction - Purchasing Of Services for Older People
10. Given the Council’s changing purchasing requirements there is a need to provide for an extensive programme of reviewing and where appropriate re-tendering contracts with existing care homes, excluding the OSJ care homes.
11. The objectives for the Council’s services for older people for the next 3 to 5 years are to enable people to achieve and maintain maximum independence, substantially enhance preventative and rehabilitation services to reduce the overall incidence and prevalence of high dependency care needs and to reduce impact of disabilities and illness and to increase user choice, autonomy and control over services.
12. The service changes and developments required in order to meet these objectives over a number of years will lead to a significantly different pattern of provision. These changes will include, among others: · A significant reduction in the purchase of registered residential care; · The development of extra care housing as an alternative to traditional lower level needs residential care and as a setting for the provision of more specialised services; · An increase in nursing care provision and the development of specialist provision for meeting high dependency needs arising particularly from mental health and dementia; · Increasing investment in intermediate care and rehabilitation services;
13. The Council’s performance against these changes will be measured by its ability to deliver nationally laid down ‘outcomes’ for the whole population of older people using services in Oxfordshire and to encourage the market to develop appropriate services. Meeting these challenges and objectives by achieving the service developments required will only be met through the active engagement and involvement of the Primary care Trust (PCT) and other partners and the stakeholders in services for older people.
14. Therefore the stage 2 redevelopment of the OCP contract and services will be negotiated in a way that meets the above considerations by reducing the overall number of residential beds and replacing them as far as possible with alternative services outlined below.
Extra Care Housing Units15. Over the next ten years it is anticipated that an increasing number of older people will continue to work after the current retirement age and will have greater disposable income or capital assets through pension funds and through owning their own home. The Council needs to respond to this via the provision of extra care housing (ECH). The Cabinet of the Council approved a ECH strategy in July 2007, to develop a minimum of 2485 units of ECH within Oxfordshire from now until 2029.
16. The Stage 2 OCP Redevelopment Programme will play an important part in achieving that aspiration and provide early opportunities to meet the aspirations of the Strategy. Redevelopment of the Stage 2 homes could produce a minimum number of 320 ECH units (on top of the current Isis units).
Nursing Beds
17. Historically Oxfordshire has a higher proportion
of people aged 85 and over and spends more per head on older people than its
comparator local authorities. A high proportion of the ‘high cost’ provision is
accounted for by the purchase of long-term care nursing beds. Many Oxfordshire
care home providers have not fully embraced the change in continuing care
criteria (and adjusted their fee expectations accordingly), which came into
being in October 2007 and which lowered the assessment threshold of eligibility
for continuing care funding. In addition, OCC needs to continue to be aware of
and responsive to care home ratings following CSCI inspections. More generally,
given the projected demographics there is a constant danger of demand
outstripping supply. All these factors can impact on access to capacity and can
make secure purchasing at the right price problematic. It is therefore
desirable to convert as many beds as possible within the OCP contract to nursing,
both OCC funded and Health funded, all of which are purchased and contracted
via the pooled budget. The exact numbers will be determined by the requirements
of the older person’s pooled budget Joint Management Group. Residential & Nursing Older Person with Mental Health Needs (OPMHN) Beds
18. Demographic information shows that from 2004 to 2010 the Oxfordshire 85+ population will increase by 27% (to 14,500) and 90% by 2029 (to 25,800). It is also known that each year beyond the age of 85 approximately 16% of the population develop some form of dementia. Older people are and will continue to remain healthier for longer so there will be greater proportion of older people with dementia and mental health needs in the future.
19. Alongside this, large areas of rural Oxfordshire are ranked as ‘deprived’ in a measure of distance to local services, over one fifth of the population living in areas that are ranked within England’s worst 10% with regards to access to local services.
20. The County Council need to meet both the above challenges with a range of services, not just bed-based, that fit with the Dementia and Well-Being agenda providing early intervention and family support. However, the need for dementia/mental health beds for long-term care will continue to be required in large numbers and geographical spread and will be required to dove-tail with and be responsive to other forms of dementia service.
21. In response to this many providers throughout the County are developing such services, which is a healthy position. In addition, there is the possibility to also develop such services within the OCP contract, achieving as many as possibly 120 dementia/ mental health beds geographically spread across the north, the city and the south.
Preventative & Rehabilitative Care
22. One of the major objectives detailed in the Council’s commissioning strategy for services for older people for the next 3 to 5 years is ‘to substantially enhance preventative and rehabilitation services to reduce the overall incidence and prevalence of high dependency care needs and to reduce impact of disabilities and illness’. The challenge is to ‘invest in services that promote well being in the whole population, prevent dependence and maximise the length of time that people can remain living independently whilst meeting the needs of those who require intensive services’.
23. This can be provided by a range of short-stay bed-based services: Intermediate (Rehabilitation) Care - A programme of rehabilitation agreed with the client and overseen by a therapist to facilitate early discharge from hospital or prevent an admission to hospital or long-term care.
Intermediate (Recuperation) Care - A period of recuperation and convalescence following discharge from hospital to allow stabilisation before long-term needs are assessed avoiding unnecessary admission to long-term residential care.
Transitional Care - Allowing discharge from hospital into the stability of a care home environment whilst awaiting availability of a bed in the client’s first choice of care home.
Respite Care - Allowing informal carers a period of planned respite or in response to a temporary breakdown in informal care, also allowing the opportunity for an assessment for rehabilitation potential.
24. Such services are already widely purchased through the older person’s pooled budget with considerable benefits. For instance, the County Council’s Intermediate (Rehabilitation) Care beds have a historical record of occupancy well in excess of 90% and a success rate of returning in excess of 70% of people back to their own home with the same or smaller care package than prior to their hospital admission.
25. There are identifiable benefits to consolidating such preventative & rehabilitative services into a single large ‘centre of excellence’, possibly based near and linked to the John Radcliff hospital. These benefits are linked to flexible use of the beds between types of service (following relaxation of registration categories by CSCI), staff training, expertise, support and service delivery as well as therapy cover and general medical cover. However, this would be at the expense of providing a geographical spread of smaller units across the County. Such a development is a crucial part of the OCP contract redevelopment so will be subject to a stakeholder consultation in order to establish a clear strategy and proposal, which also fully takes into account the PCT’s emerging community hospitals redevelopment plan and programme.Redesigning the Financial Model For The Contract26. The original agreement of 2001 was predicated on the Net Present Value (NPV). The NPV is the term used to describe the amount of money that borrowed today, would be paid off by a stream of payments over future years, not dissimilar in principle to a mortgage.
27. There is a requirement to redevelop the OCP contract in a way that reflects the Council’s service and financial objectives for the overall delivery of services to older people in Oxfordshire but which still meets the Council’s obligations under the contract, primarily that of continuing to maintain the NPV of the contract. In short, the outcome will be more relevant services and increased activity for the same overall cost.
28. Work has been undertaken to develop and agree with OCP a financial model that simplifies the basis on which the contract is valued. It takes account of current considerations such as TUPE obligations, pension rights, the impact of private fee payers, lease issues, capital and revenue costs and savings, risk transfer, costs of new services and impact on remaining bed prices.
29. It also incorporates built-in flexibilities to respond to changing commissioning needs and any other constraints that may arise during the life of the programme without compromising the financial viability of the contract. This will improve the way in which the value of the contract is calculated, monitored and evaluated as the stage 2 programme progresses.
30. In order to achieve this simplified approach the original NPV of the contract has been recalculated to reflect the position as at end March 2009.
Timescale and Impact on People
31. The Stage 2 redevelopment will incorporate the current outstanding redevelopments from Stage 1 of the process, making the overall redevelopment continuous and pragmatic.
32. The speed and final shape of the redevelopment will largely be determined by the success of the ECH project programme, particularly with regard to availability of land, the choices and preferences of older people and the impact that changes in the housing market may have on demand for ECH. This will be achieved through close partnership working with District Councils.
33. There will be an impact on all current residents and their families in each of the 8 care homes under the continuing redevelopment programme as the transition is made from residential care to other types of services. There will also be an impact on staff in terms of work practices and required skills.
34. For each of the 8 stage 2 care homes a programme will be developed detailing strategic development, implementation and review timescales, a public consultation plan, the range and methodology of engaging stakeholders and the financial impact on the overall OCP contract. The overall redevelopment is initially a 2-year programme.
RECOMMENDATIONS
35. It is RECOMMENDED that Cabinet agree to the:
(a) overall strategy for Stage 2 of the redevelopment of the OCP contract;
(b) Portfolio Holder giving approval for the financial model underpinning the OCP contract; and
(c) Portfolio Holder giving approval for the development proposal and timescale for each of the 8 Stage 2 care homes.
JOHN JACKSON Director for Social & Community Services
Contact Officer: Nick Welch, Head of Major Programmes, Social & Community Services Tel: (01865) 323575 Laurence Dowden, Service Manager, Major Projects, Social & Community Services Tel: (01865) 323685
November 2008
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