Key implications for the following:

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1 1 Clinical Commissioning Group November 2012 Date of Meeting: 16th November 2012 Agenda Item: PAPER 10 Subject: Reporting Officer: Integrated Community Equipment Store (ICES) Tender Process Ian Mello, Head of Commissioning Mark Gibbons, Associate Director Continuing Healthcare Peter Ball, Efficiency & Effectiveness Manager Purpose of the Board Paper: To provide an update on the ongoing issues with the current service provision of the ICES and the potential solutions. Governance: Link to PCT Strategic Objectives Trust Board Resolution: To approve To support Recommendation The report requests the Governing Body to note the following Agreement to share equally the running costs of the service in 2012/13. Agreement to undertake a procurement exercise to identify and evaluate potential providers of an outsourced model. A robust service specification and supporting tender documents will be required. This should improve service delivery and create efficiencies that can be shared by both partners. The PCT/CCG will deliver its financial responsibilities for health commissioning as part of the new value for money outsourced model. The accountability for the timely delivery of an outsourced model should be delegated to a Project Team. Key implications for the following: Financial Key Financial Implications: Agreement to share equally the running costs of the service in 2012/13 which would result in an increase in current funding levels. An outsourced model could deliver

2 2 Has this paper been approved by the Finance Department? potential financial efficiencies. Yes Yes / No / N/A Value for Money Risk Legal Workforce If YES: Name and Job Title of Peter Ball member of the Finance Department Efficiency and Effectiveness Manager If NO what process has been agreed for financial sign off? An outsourced model should improve service delivery and create efficiencies compared to the current model. There is a risk that the potential efficiencies are not realised and the cost of the service increases overall. A full procurement exercise will need to be undertaken to identify and evaluate potential providers of an outsourced model. The procurement exercise will need to be undertaken collaboratively by PCT and LA colleagues. The accountability for the timely delivery of an outsourced model should therefore be delegated to a Project Team. Equality Impact Assessment / Human Rights Assessment: Included in Board Paper Comments Yes No n/a Patient and Public Involvement Clinical Engagement Parties/ Committees consulted The content of this paper was approved by the Clinical Commissioning Committee on 2 nd November 2012.

3 Executive Summary 3 Purpose To provide an update on the ongoing issues with the current service provision of the ICES and the potential solutions. Current Service A number of strategic risks have become apparent through the recent review that requires action: Changing context of service provision Property Vehicles IT Decontamination Customer Care Skills and Abilities In order to establish an appropriate solution to respond to these risks/issues, a number of Community Equipment Stores have been visited and managers consulted. Some of the approaches reviewed contain noteworthy practice (albeit anecdotal in some cases) and these approaches can be broadly characterised as improvements relating to in-house provision, and improvements arising from outsourcing. Recommendation The report requests the Governing Body to note the following Agreement to share equally the running costs of the service in 2012/13. Agreement to undertake a procurement exercise to identify and evaluate potential providers of an outsourced model. A robust service specification and supporting tender documents will be required. This should improve service delivery and create efficiencies that can be shared by both partners. The PCT/CCG will deliver its financial responsibilities for health commissioning as part of the new value for money outsourced model. The accountability for the timely delivery of an outsourced model should be delegated to a Project Team. Introduction The Integrated Community Equipment Service (ICES) is jointly commissioned by NHS Heywood Middleton and Rochdale and Rochdale Adult Care Services. The purpose of ICES is to: Provide disability equipment in a timely and cost effective way in order to support service users to help maintain their independence and remain in their own homes Slow down deterioration in function and consequent loss of confidence and self esteem in service users Support and protect the health of carers Enable timely discharge from hospital The equipment provided by ICES falls broadly into 3 main categories:

4 4 Health equipment purchased through a funding arrangement with Pennine Care NHS Foundation Trust and includes specialist beds, mattresses, gel cushions, etc. It can only be requisitioned by health staff. Community equipment Minor adaptations ICES is also used to store and deliver equipment for the Children s Service. Funding Historically the LA has contributed 70% towards the overall cost of the ICES service and the PCT has contributed the other 30%. In 2011/12 the PCT was approached by the Local Authority (LA) to increase its contribution towards the overall running costs of the ICES service so that an equitable share of the costs was borne by both organisations (e.g. 50%/50% split). In 2011/12 a decision was therefore made to share equally the costs of running the service. It was agreed that a decision regarding any potential increase in recurrent funding would be made following a formal review of the service to ensure that the current service delivers the required outcomes and is value for money. This review should have been completed before the end of financial year 2012/13. Outturn (2011/12) PCT Contribution LA Contribution 778.6k 389.3k 389.3k The PCT currently has a budget of 254k for the ICES service therefore any decision to share equally the costs of running the service would initially require a further 135k. Current Issues with Existing Service The formal review has identified the following issues with the current service - Performance/Activity ICES has previously had performance measured against the performance indicator formerly known as BV056, (percentage of items of equipment delivered within seven working days). This was formerly a national indicator but retained as a local indicator in Rochdale. Performance has at best in previous years been around 97% but currently is only approx 94%. The target is 95%. This is a result of the issues ICES has faced over the past nine months and also the increase in requests for equipment provision. Whilst this is the only performance measure that is officially captured, management reports suggest that collections performance and other aspects of the service are not achieving the optimum level. This is due to a number of factors; demand, staffing resources, IT systems, facilities etc and whilst work is ongoing to address these issues and improve performance, it will take some time and potentially require additional resources. In 2011/12 just short of 14,000 pieces of equipment were delivered to almost 4,000 service users. Comparing the first quarter of 2012/13 against the same period last year, numbers of referrals, pieces of equipment and deliveries/collections have increased by approximately 10%. This is as a result of a number of factors, demographics, STARS, increasing numbers of people being cared for at home, and work being carried out to reduce waiting lists for orthopaedic surgery.

5 Strategic Risks A number of strategic risks have become apparent through this review that require action: Changing context of service provision Property Vehicles IT Decontamination Customer Care Skills and Abilities 5 Changing Context of Service Provision High Risk The current model of provision involves recurring costs in staff and property leases that are dependent on year-on-year renewals of funding arrangements from partners. With the changing context of health administration and the efficiency challenges being addressed by the council, this presents significant financial and operational risks. There is a high likelihood that in the future these ongoing commitments might not be met, and this would leave all parties involved vulnerable to a high cost impact. Property High Risk The lease on the Princess St warehouse expires January 2013 and it is likely that further investment would be required to make it fit for purpose should the lease need to be extended, although a comprehensive assessment of requirements and potential costs has not been undertaken yet. Alternative premises could be considered, however, it is unlikely that a purpose-built facility would be readily available, meaning that investment would be required to develop an existing warehouse to meet requirements. Usually to achieve value for money, a lease with a long-term is a better option but this would require a longer-term future commitment to retaining an in-house service from both Rochdale Council and also health partners. Vehicles Medium Risk Both current delivery vehicles are coming due for replacement by capital purchase or lease within the next 24 months, which represents a further unbudgeted cost pressure on the service. IT Medium Risk The ELMS database requires significant attention technologies such as bar-code scanners introduced some years ago to support better stock control have been used inconsistently. This results in limited management information and stock records. The lack of on-line ordering functionality for practitioners increases the likelihood of requesting inappropriate or out-dated items to meet needs. The system requires software maintenance as the current version is several years out of date. Work is being undertaken now to upgrade the system to the latest version to improve functionality and significant additional work is required on coding structures, data cleansing and system administration. Decontamination Medium Risk Other equipment loan stores visited have decontamination facilities located so that potentially contaminated equipment can be stored separately from the main body of the store prior to processing. Steam-cleaning or other mechanised decontamination equipment was available. Negative-pressure ventilation systems were used. The equivalent provisions are somewhat limited at Princess Street. Customer Care Medium-Low Risk Customer demand levels and expectations are increasing, representing a risk to the level of customer care and quality of service that might be provided.

6 6 Skills and Abilities Medium-Low Risk Without significant investment there is the risk that the skills and abilities of administrative and warehouse staff will not be developed to meet increasing customer and service requirements. Findings from Peer Inquiries A number of Community Equipment Stores have been visited and managers consulted. The following authorities approaches each contain noteworthy practice (albeit anecdotal in some cases). The approaches can be broadly characterised as improvements relating to in-house provision, and improvements arising from outsourcing. Externalising Provision Tameside Outsourced Tameside have outsourced their community equipment store to a private supplier. Tameside no longer has an admin resource or warehouse for delivering equipment and have a contract monitoring role. Although minor adaptations are still carried out in-house, the contractor could provide this service also. The contractor delivers equipment, collects equipment when no longer required and cleans, services and tests all items. An agreed schedule of charges applies. A further service offered by the contractor, that could offer significant savings is a lease service for high value items of equipment, such as beds. This would be expected to compare very favourably with current provision. Blackpool Hybrid Model Blackpool no longer has an ICES store, as it was reviewed and found to be expensive and inefficient. Blackpool s equipment service is provided through an equipment team that are based within the Home Improvement Agency Service. They provide a minor adaptations and Hospital Discharge Service and equipment provision. Equipment is ordered directly by assessment staff from suppliers listed in an in-house catalogue, which is managed by the HIA. They have negotiated delivery times with a number of suppliers, between one hour and three days, depending on the urgency of the situation. Handypersons visit properties after equipment has been delivered to assemble and fit if required. The service is funded 50/50 by the PCT and LA. They do not recycle any equipment, as the majority has a purchase value of less than 85. Improvement In-House Wigan Staff Skills and Ability Wigan considered outsourcing their equipment store provision some years ago. They rejected this option on the grounds that they considered they could provide an in-house service at comparable costs, continuing to support local regeneration through employing local residents. The strengths of the approach at Wigan are the skills and abilities of the manager (and staff) who brings a commercially-minded approach to ensuring best value from all purchases. It was felt that whilst this store appeared to perform very well, with an extremely professional approach, this was in the main reliant and attributable to a dynamic and experienced service manager. The weakness of this would be if there were a loss of that particular individual and expertise, the store may no longer compete favourably with an outsourced model. This is analogous to the situation Rochdale faced in Manchester Just-In-Time Stock Management Manchester have one main store and two satellite stores. Manchester operates Just-In-Time stock management, utilising the capabilities of the ELMS database. Warehouse staff are utilised to optimum capacity, loading delivery vans and processing incoming stock. The delivery of equipment is outsourced to a third-party, and is an arrangement that they consider provides good value.

7 7 Manchester/Salford Pooled Admin Manchester and Salford are currently (June 2012) progressing to pool their ICES admin resource as part of an Association of Greater Manchester Authorities (AGMA) efficiency project. The project began in late 2010, reviewing how the equipment stores across AGMA could be made more efficient, by sharing common activity, buying collaboratively and potentially consolidating their operations. Improvements through buying collaboratively have been implemented already. Opportunities to improve the administration and logistics within stores were analysed between late October and December This looked at as-is processes in each participating authority and designed a set of generic processes that represented the most efficient way of delivering the service. The to-be processes improve the efficiency of the existing processes within stores in several ways, but primarily by: Increasing the use of online ordering (streamlined form filling all done before the point of referral, rather than by the store); and Automating current manual processes The immediate cost saving would come from a consolidated administration function. Indicatively, an average of the potential admin process savings across all authorities involved in the investigation was a 35% reduction in Admin resource: the original 23.5 FTE admin figure (across five authorities) would reduce to FTE. This would subsequently enable further consolidation of the physical stores and associated greater savings; however there is no agreed time frame yet for implementation of revised store structures. Rochdale has the option buy-in to the shared admin model as a component of in-house delivery. However, on its own this project would not address the strategic risks highlighted above. Recommendation The report requests the CCG Governing Body to note the following Agreement to share equally the running costs of the service in 2012/13. Agreement to undertake a procurement exercise to identify and evaluate potential providers of an outsourced model. A robust service specification and supporting tender documents will be required. This should improve service delivery and create efficiencies that can be shared by both partners. The PCT/CCG will deliver its financial responsibilities for health commissioning as part of the new value for money outsourced model. The accountability for the timely delivery of an outsourced model should be delegated to a Project Team.