Autumn Staff briefings 2013

As a NHS patient, care is provided free at the time you need it, whether this is from a hospital or community nurse or psychologist. A payment is made for this care by the local clinical commissioning group. The local clinical commissioning group decide how best to spend a portion of the NHS budget that is provided locally. They must consider their priorities and how to deliver more and better quality services within their financial allocation to improve the health outcomes for their patient. The amount they pay for this care is often based on a variety of different factors: National reference costs Contracts National guidance NHS funding

We received operating income in the year of £332.6 million from the following sources: We incurred operating costs of £326.1 million which was expended in the following areas: Our finances

Investing Activities 2012/13 (or how we spent £11.2 million of capital monies) Creating a 32 bed low secure unit £2.8 million Maintaining and upgrading our IT infrastructure £4.2 million Improving privacy & dignity £0.6 million Replacing Medical Equipment £0.2 million Maintaining the quality of our estate £3.4 million

Contracts We will agree a spend with our commissioners depending on our contract with them. The contract will provide us with a set of key specifications which explain the finer details of the care which needs to be provided. For a community hospital or mental health inpatient facility it will often say we need to provide them with ‘bed days’ for patients or service users living in a certain location who have a specific medical condition. Every year a ‘price’ for this service is agreed. We will then advise the commissioners what we can provide for this price and how we provide the best care for our patients and service users.

Making decisions and developing services A business case is developed as part of the procurement process to support decision making for new investments or to change or develop a new service. It sets out the case for undertaking a project, whether capital (a new building) or revenue (new clinical staff to deliver a new service), weighing up the objectives and benefits against the estimated costs and risks. They could include: –measurable objectives; –appraisal of all the options available (including the ‘do nothing’ approach, an indication of the preferred option and an explanation setting out why it is favoured); –demonstration of affordability and value for money; –a timetable reflecting the life of the project.

Prioritising The Department of Health issues an operating framework which sets out the key priorities for the following year and the financial rules that will operate. This helps us to plan and prioritise how to use our resources. The framework is usually published in December and relates to the financial year starting the following April.

Savings Cash-releasing efficiency savings result in the cost of the service provided being reduced. Non-cash releasing efficiency savings occur when more activity is provided but the cost of delivering the service remains the same. An example of this could be a reduction in average lengths of stay, which resulted in more patients being treated. Improvements in quality and efficiencies are expected to be secured through better procurement, commissioning, organisation and management, with any additional savings being reinvested in new or better local services.

The funding gap

Pricing for healthcare is, for the first time, underpinned by primary legislation. The Health & Social Care Act 2012 moves responsibility for pricing from the Department of Health, to become a shared responsibility for NHS England and Monitor. Under the terms of the Act, NHS England has a duty to specify those healthcare services for which it thinks a national price should be used, and Monitor has the duty to set that price. There is also provision for setting rules governing not only how nationally set pricing will work, but also how local price-setting must operate. Funding in the future

Future briefings Your opportunity to hear from Trust Executives/Senior team Please tell us what you would like us to focus on: