North by North West: The £6bn contract

Largest ever tender

The largest ever tender of NHS services can surely result in only one outcome – the contract being offered to the incumbent providers.

In case you missed it earlier this month, this is the £6bn, 10 year deal to deliver all out of hospital services in Manchester, which leaders were bound to advertising by EU legislation.

Naturally, the size of the contract has caused a stir, and has apparently prompted interest from the private sector. But it’s hard to see any scenario in which these services are removed from the current NHS providers, albeit potentially repackaged into a subsidiary or joint venture.

Community services providers Central Manchester University Hospitals Foundation Trust and University Hospital of South Manchester FT have been working to develop the out of hospital “local care organisation” for the last two years, with the clear intention for it to hold the new contract.

Partly due to the relationships between commissioners and providers in Manchester, there is unlikely to be any desire from council and clinical commissioning group leaders for the services to change hands.

The primary question

A more interesting question will be the extent to which primary care services are delivered through the contract, and the future contractual status of Manchester’s GPs.

The preparation work involving CMFT and UHSM (these trusts are in the process of merging) has happened through the Manchester Provider Board, which also includes GP federations.

The ideal scenario would be for GPs to become employees of the new organisation, but the need for this to happen consensually means a partial solution is likely to be required.

Missing the point

There has been much debate about the merits of the “hospital chain” or “group” model, after the chief executive of University College London Hospitals FT suggested that it wouldn’t work.

But much of the criticism misses the point by equating the chain to a massive centralisation of power and control, as per the merger model.

The most advanced hospital chain, being formed by Salford Royal FT and Pennine Acute Hospitals Trust, is more about devolving power, at least on an operational level.

The trusts have been split into four “care organisations” centred around each of the main hospital sites in Salford, Oldham, North Manchester and Bury, with responsibility delegated to leadership teams for each organisation.

The designated chief officers have recently been named as James Sumner (Salford), Damien Finn (North Manchester), Steven Taylor (Bury and Rochdale) and Donna McLoughlin (Oldham). They will work alongside site-specific medical and finance directors.

A “committee in common”, made up of the governing boards of Salford Royal and Pennine Acute, then sits above the care organisations to set the strategy and standard operating model to be used across the local organisations, and to ensure that wider population interests trump those of the separate hospitals.

Risky business

The hospital chain model has not been given the easiest testing ground, as the district general hospitals of Pennine Acute have major quality, operational and financial problems.

Much will depend on the support and leeway offered by regulators, such as the financial control total set by NHS Improvement.

The trust is expecting a deficit of £10m for 2016-17, and NHSI said it would need to target a £4.5m deficit in 2017-18.

This would have required a cost improvement programme of more than 6 per cent and has been rejected by the trust, which according to its latest finance report is instead seeking to negotiate a deficit of £43m.

Although the question of transition funding for the trust’s sites has been answered in the short term, it will still need some attention in the longer term.

Until that happens, this risk will remain on the register at Salford Royal FT: “If we fail to secure the appropriate transformation funding for Pennine Acute then Salford Royal will withdraw its offer to incorporate Pennine Acute in the Salford Royal group.”

Yet another interim

Southport and Ormskirk Hospitals Trust now has its fifth chief executive in less than two years, and it’s another interim appointment.

A few eyebrows were raised when Karen Jackson was announced as successor to Iain McInnes, who has returned to NHS Improvement.

Until December, Ms Jackson was chief executive at North Lincolnshire and Goole FT, which has since been placed in special measures for serious quality and financial concerns. Not dissimilar to the problems at Southport and Ormskirk.

Big delay

As predicted a couple of newsletters ago, a further delay to the construction work for the new Royal Liverpool Hospital has now been announced. And it’s a big one.

Eye on reconfiguration

Another major commissioning merger is on the cards in the north west, with the four CCGs in Cheshire planning to establish a “unified health commissioner”.

Besides the general integration benefits, the CCGs appear to have one eye on future reconfigurations involving Cheshire’s three acute trusts, for which it will be crucial to be singing from the same hymn sheet.