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Cabinet
Tuesday, 18 July 2006

CA180706-07

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ITEM CA7

CABINET – 18 JULY 2006

OXFORD RADCLIFFE HOSPITALS: PERFORMANCE IMPROVEMENT AND COST REDUCTION PROGRAMME

Report by the Director for Social & Community Services

Introduction

  1. The Oxford Radcliffe Hospitals NHS Trust (ORH) has issued a consultation on service changes it wishes to introduce at the Horton General Hospital in Banbury and the Trust’s hospitals in Oxford. Considerable concern has been expressed by local people and organisations about the proposals, which have significant implications for a range of services across the County. They also have significant service and financial implications for the County Council. This paper summarises the main proposals and their implications for the County Council and in particular the services provided by the Social & Community Services directorate (SCS).
  2. The ORH’s plans and proposals are issued in a two-part paper "Performance Improvement and Cost Reduction Programme": a copy is in the Members’ Resource Centre. Part 1, "Efficiency and Performance", covers the performance improvement and cost reduction measures that it is introducing. It makes clear that actions which are considered not to impact on patient care are well under way. Part 2 is a specific set of options for service changes at the Horton Hospital, Banbury, and these are subject to full public consultation. The consultation period started on 6 June and closes on 4 September. The Part 1 measures are not seen by ORH as requiring consultation although comments on the measures described are invited.
  3. Background

  4. The measures and proposed service changes are put forward in the context of well-publicised and significant financial pressures, which have been very evident for some years. The consultation document (Part 2) also discusses changes in training and other workforce issues, including staffing level requirements, and these are outlined later.
  5. Oxfordshire receives only 85% of the national average funding for NHS services. This reflects the relative health of the County but at the same time services have to be provided in an area of relatively high cost of living which would not appear to be properly reflected in the funding formula. This applies as much to social care and other services provided through the County Council as to the NHS. As well as facing the same cost of living pressures as the NHS the County Council has received only a 2% increase in government funding for its social services while the NHS has received 9% over the past 3 years.
  6. ORH Proposals for Service Developments and Measures to Increase Efficiency and Performance.

  7. The two key approaches that the ORH is using focus on :

    1. Improving efficiency and productivity; and
    2. Improving performance.

  8. The efficiency improvements focus on:

    1. Reduced use of agency staff;
    2. Savings in administrative, secretarial and clerical services;
    3. Strict vacancy management;
    4. Procurement from the ORH’s major suppliers of goods and services.

  9. Over 60% of expenditure in the ORH is on staff and the total workforce is nearly 10,000. The plan is to reduce the number of posts by 600 and the reductions are summarised in the table below. A number of these posts will be vacant as a result of the management of vacancies.

  10. Posts

    Estimated reduction

    Managers, administrative, clerical and estates staff

    250

    Nursing staff

    225

    Allied health professions and radiographers

    50

    Medical staff

    30

    Scientists

    30

    All other staff

    15

  11. Performance improvements build on work that has been under way for some time and which includes making more use of day surgery, developing new community services and reducing the length of stay for patients. The specific programmes for improving efficiency include:

    1. Eliminating unnecessary delays in tests, x-rays and other examinations;
    2. Using operating theatres and diagnostic services in better ways;
    3. Extending the use of day surgery and improving outpatient services;
    4. Reviewing the use of administrative and clerical services.

  12. The plans include improvements to geratology services, including the introduction of rapid assessment and diagnostic services.
  13. As part of the cost savings the ORH is planning to close 130 beds during this financial year; 75 of these have already been closed. In addition 31 beds at the Radcliffe Infirmary (RI) are planned to be closed by September this year.
  14. Impact on Social & Community Services

  15. The impact of these reductions on the SCS are considerable and they are clearly reflected in the activity and financial performance information. This has been extensively discussed with the Cabinet Member with responsibility for Adult Social Care and other members of the Cabinet. In summary, the impact is as follows.
  16. Financial

  17. The pooled budget for older people and physical disability, which is the budget to which the County Council and the PCT contribute for the purchase of care home beds, will over-spend at the end of May 2006 by £317,000.
  18. In addition the SCS budget will over-spend at the end of May 2006 by 266,000. This budget includes the home support services.
  19. The PCT(s) have made available additional funds for the 31 additional placements resulting from the close of RI beds for this year but there is no final agreement for funding for these placements next year. The average length of stay in a nursing home is at present 1.5 years; it is 3 years in a residential home.
  20. The 100% NHS funded continuing care beds paid for through the pooled budget are have not had their funding increased sufficiently to deal with inflation, putting more pressure on the pooled budget.
  21. Activity

  22. The ORH is reducing the average length of stay for patients, which increases pressure on SCS from delayed transfers of care. To keep within the available resources 3 additional placements a month were planned; places that were planned for allocation in August are being used in June.
  23. An additional 16 clients are receiving home support than planned for.
  24. Following the closure of the RI beds and the reduction of the delayed transfers of care, clients will be coming through to social care services at a faster rate than would have been the case previously.
  25. These pressures are all evident very early on in this financial year, and they will continue and have a cumulative impact. The continued closure of beds and the increased throughput inevitably means that there will be continued and increasing pressure on SCS resources.
  26. ORH Proposals for the Horton Hospital, Banbury

  27. The proposals for changes to the Horton Hospital, Banbury, are developed from the strategic review of services for Banbury and the surrounding areas. As a small acute hospital the Horton is facing a number of pressures which, in the view of the ORH, means that some of the Horton’s services, particularly services for women and children, and emergency and trauma services are not clinically sustainable in their current configuration.
  28. The rationale for many of the proposals for the Horton Hospital is based on the training requirements of doctors and other professions in a range of specialities. They also refer to the qualification requirements and staffing levels required to operate out of hours and emergency services for paediatrics, gynaecology and obstetrics which, in the view of the ORH, are unaffordable and are judged not to be sustainable in the medium term.
  29. The proposed changes are summarised at Annex 1. The total recurring revenue savings anticipated are between £1.1million and £1.4million, depending on the options presented. Investment of £230,000 is identified and a number of projects for further investment are still being evaluated. The proposals also avoid future costs of between £2million and £2.3million, which in the main are also recurring revenue.
  30. The proposals for the Horton are very controversial for people in Banbury and its surrounding areas. The fundamental concern is that the changes will profoundly undermine the role of the Horton Hospital in the provision and the accessibility of health care services for people in the north of Oxfordshire and surrounding areas.
  31. Conclusion

  32. Some of the service changes and proposals are positive and contribute to the overall development of hospital services that are responsive and accessible and which support a range of community and local services for the support and treatment of older people. These include: rapid access to diagnostics and assessment services; greater opportunity to avoid admission to hospital and nursing, residential and other high cost social care; support for integrated services with primary care; and better support for people living in their own homes.
  33. However, these proposals and service changes must be seen in the context of all the services that are necessary for the delivery of effective, safe, and efficient services for supporting older people in the community. Many of these services are provided through SCS and the consequences of the service cuts on the directorate are clear. Primary care and the community nursing and other services provided by the PCT(s) are also necessary for the service changes and proposals to be delivered effectively and safely. The services changes that are being introduced and the proposed changes may be effective in dealing with the financial crisis in the ORH, but they appear to have been prepared and published without any consideration of the impact on other agencies’ ability to respond.
  34. In addition, Oxfordshire’s PCTs are also undergoing major changes with the amalgamation of five into one, and they too have to achieve major service cuts to achieve the £17.95million that has been identified for this year. This will limit their ability to respond effectively to the changes being introduced by the ORH and, as with the ORH, it seems that there will only be limited consultation on the changes that these cuts will result in. They will however also impact SCS and will result in further pressures.
  35. The financial pressures have been evident for a number of years and there has been ample opportunity for the changes currently being implemented or proposed to be discussed and planned with SCS and other key partners. The timing of the changes and the proposals is unfortunate and changes of this magnitude would have been better discussed and formally proposed when the financial pressures were not so severe.
  36. RECOMMENDATIONS

  37. The Cabinet is RECOMMENDED, whilst acknowledging the necessity for financial stability and balance to be achieved in the health sector, to:
          1. call on the Strategic Health Authority to halt the cuts that Oxfordshire’s PCT(s) will be required to make until a full review can take place;
          2. seek a full consultation on any proposed changes in the provision of or arrangements for the provision of NHS services in the community;
          3. register with the Oxford Radcliffe Hospitals NHS Trust in the strongest possible terms the County Council’s concerns about the consequences of their service changes on the Council.

CHARLES WADDICOR
Director for Social & Community Services

Contact Officer: Nick Welch, Head of Planning and Partnerships, Tel (01865) 815714

Background papers: "Performance Improvement and Cost Reduction Programme" Parts 1 & 2; Oxford Radcliffe Hospitals NHS Trust June 2006.

July 2006

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