,
DRAFT 1
Royal National Orthopaedic Hospital
Integrated Business Plan
December 2012
The RNOH aims to be the UK’s leading
specialist orthopaedic hospital building on an
international profile for outstanding patient
care, research and education.
Document Control Details
Related
Foundation Trust Programme
Programme/Project
Senior
Responsible
Owner
Saroj Patel
Author:
Vivian Wood
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Approval & Revision History
Version:
Summary of Changes:
Author:
Date:
V 0.1
First formal draft – submitted to Board
Vivian Wood
14.12.12
V 0.2
V 0.3
V 0.4
V 0.5
V 0.6
V 0.7
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1
Contents Page
Forward
1. Executive Summary
2. Profile
3. Strategy
4. Market Assessment
5. Service Development Plans
6. Financial Evaluation
7. Risk
8. Leadership
9. Governance
2
3
Foreword
We are proud to introduce our five year integrated business plan for the Royal National
Orthopaedic Hospital NHS Trust (RNOH).
Musculoskeletal medical treatment and surgical procedures deliver life changing
outcomes for patients and transform quality of life. The consequences of not undertaking
these services are pain, immobility and economic inactivity - a major contributor to longterm illness and consequent inability to work.
Our vision is that in five years’ time we will be the UK’s leading specialist orthopaedic
hospital building on an international profile for outstanding patient care, research and
education.
To help us achieve this vision, we have an established track record of achieving
excellent quality of patient experience and outcomes - 95% of our patients rate their
care as good or excellent and over 90% would recommend the hospital to their friends
or family. Our model of care means that a much higher proportion of our patients avoid
healthcare acquired infection at the RNOH than the vast majority of hospitals across the
UK – a remarkable achievement given the levels of highly complex specialist surgery
taking place at the Trust.
We offer timely access to our services - we consistently meet access targets in a
speciality that struggles to do this across the rest of the country.
Our location on the outskirts of London can be accessed by patients from across the
country with complex and specialist musculoskeletal intervention and rehabilitation
needs that cannot be dealt with locally.
We are the largest of five Specialist Orthopaedic Hospitals in the UK. We are
predominantly a tertiary centre that treats a high proportion of the sub-specialist work
carried out in the UK - this activity encompasses the specialist, complex and rare
conditions. For example, we have the largest spinal surgery service in Europe with a
third of UK spinal scoliosis surgery taking place at the Trust; double that of the next
largest provider in the UK.
Through the University College London Institute of Musculoskeletal Science based on
our site we have strong links to a world class academic partner and have a track record
4
of research and innovation (for example the industry “spin –off” company Stanmore
Implants Worldwide) and training (25% of the UK’s orthopaedic surgeons trained at the
RNOH).
The RNOH is therefore well placed to support the UK’s response to an ageing
population and better life expectancy for those with complex physical needs – this will
continue to place new challenges for healthcare delivery and demands upon specialist
musculoskeletal services. We will be needed.
The RNOH was recognised as one of the top 100 healthcare employers in 2010 in a
survey conducted by the Health Service Journal and Nursing Times, and staff
commitment and motivation were recognised in an external review as "exemplary". We
will build on the huge loyalty to the organisation and passion for the services we provide
by continuing to involve staff in our service development plans.
In one organisation and in one main location over the last 100 years, we have built up a
critical mass of multi-disciplinary experts providing high quality patient care for patients
with complex specialist needs.
13 independent reviews in the last 30 years have led to the conclusion that this high
quality, innovative and productive excellence would be diluted if the organisation was
relocated to other sites or merged with other organisations.
We are now ready to move ahead and realise our exciting vision, enabled by NHS
Foundation Trust status, to be the leading Specialist Orthopaedic Hospital in the UK.
5
Chapter 1: Executive Summary
1.1 Vision and Strategy
Our vision is to be the UK’s leading specialist orthopaedic hospital building on an
international profile for outstanding patient care, research and education.
The RNOH is the largest of five Specialist Orthopaedic Hospitals in the UK providing
specialist and complex orthopaedic and related care to patients regionally and
nationally. Some local services are also provided.
The Trust’s geographical location and the specialist nature of our services give a
complex and unique commissioning portfolio for patients spanning the UK. We are
located within the local health economy of North Central London which represents 12%
of our workload. The hospital operates mainly as an elective surgical centre for complex
orthopaedics, a model which is well proven in terms of its clinical effectiveness and
clinical outcomes. We are a specialist centre for complex and revision orthopaedic
surgery for adults and children, rehabilitation, the London Spinal Cord Injuries centre,
and a national centre for bone tumour surgery.
We have developed four key strategic aims that support our vision as an NHS
Foundation Trust.
6

Maintaining and developing orthopaedic specialisation - providing the
scale and range of tertiary sub-specialist orthopaedic1 clinical activity befitting
an international orthopaedic centre of excellence.

Expanding the evidence base that we deliver high quality clinical services
– providing clinical activity to a standard that demonstrates services are safe,
effective and provide the best possible experience. This includes timely referral
to treatment access to services and transport accessibility to our sites for
patients, many of whom will have significant mobility impairment.

Building academic strength – working in partnership with UCL, a world
leading university and the UCL Partners Academic Health Sciences Network.

Expanding our external profile and focus – building an international
reputation for clinical, operational and academic expertise supported by
working in partnership with other NHS and independent health care providers.
Our strategy to deliver our vision and strategic aims is supported through the following
programmes, which link to clear organisational objectives and underpinning strategies
developed through a robust business planning and performance management process:i.
Redevelopment Programme: Our hospital facilities do not currently match our
vision. We will rebuild and redevelop our Stanmore site. We will do this through our
redevelopment programme which is supported by full government approval
(including commissioners, Department of Health and Treasury) of an Outline
Business Case for an £88.6m scheme funded primarily through the private finance
initiative (PFI). This will provide new clinical facilities by 2016. We understand and
fully recognise the number one risk facing the RNOH is the clinical and financial
sustainability of our facilities but we are confident that we have a track record of
managing this risk and an approved, clear, achievable and affordable plan to develop
our facilities in the future.
ii.
Transformation Programme: We will deliver high quality, innovation, productivity
and prevention to ensure that we are the safest, most efficient and effective provider
of specialist orthopaedics across the whole patient pathway in the UK. We will do this
through continuing the delivery of our clinically led transformation programme. The
1
Specialised orthopaedics services are those neuro-musculoskeletal services which due to rarity,
complexity or the required expertise are focused in certain centres. These services are currently provided
in 25-30 hospitals in England, of which 5 are specialist stand-alone hospitals. This includes those that
provide the most specialised nationally commissioned services, those that provide a range of complex
multidisciplinary team delivered services and those that deliver trauma services where they are
designated major trauma centres within a recognised Trauma Network.
7
service transformation programme and associated Cost Improvement Programme is
supported by the implementation of a medical management and clinical engagement
plan that ensures all clinical service transformation projects are clinically led and
maintain or enhance quality outcomes for our patients.
iii.
Organisational Development Programme: Recruiting and retaining the best
specialist staff in the UK and internationally to protect and enhance our clinical care
standards and academic status. Embedding our values across the organisation and
building our brand, profile and external focus.
1.2
Rationale for NHS Foundation Trust status
Foundation Trust status enables our vision to be delivered. We have clear reasons why
becoming a Foundation Trust will support this:i.
We will be in charge of our own destiny and able to innovate to make the best use
of our extensive land and buildings for the benefit of our patients, staff and partners.
This will allow us to focus our services and plans on our strategic aims in partnership
with our members through or council of governors.
ii.
Foundation Trust status will enhance our profile and brand as a national centre of
excellence and therefore support our Organisational Development Programme and
strategic aim to enhance our external profile and focus. This is because we will have
demonstrated to our stakeholders that we are a sustainable, well managed,
independent organisation with a focus on our vision to provide high quality services
that provide value for money to the NHS.
iii.
Alongside our work to develop and enhance our brand and profile, we can utilise the
growing stakeholder network that comes with Foundation Trust status to raise our
profile and enhance clinical and academic innovation. This, in turn will help us to
retain and recruit the best specialist staff in the country to protect and enhance
our patient care standards – this supports our organisational development
programme.
iv.
As a separate organisation that understands the unique market in which we operate,
we will be better placed to meet the needs of our patients and commissioners in
the most efficient and effective manner, with a clear focus on understanding our
patient outcomes and the value added by our services to the national health
economy. Expertise to meet the specialist needs of our patients efficiently to realise
best outcomes for our patients and added value will be prioritised and not diluted as
they would be if we were part of a larger organisation.
v.
We will give our patients, partners and staff more say in what we do and develop
our services in line with their needs. Senior clinicians and staff will have a voice. This
will engender the continued loyalty, dedication and expertise that we are proud of
at the RNOH. This will reinforce our services and support recruitment and retention
of a high calibre specialist workforce.
8
vi.
Our members and governors will be the guardians of our values and will
actively support our planning and strategic direction as an organisation.
1.3
Market Assessment
Key Facts

The RNOH is the largest specialist provider of orthopaedic and related care in
the UK and demonstrates high quality care for our patients. Our turnover is
over £115m and we employ over 1300 staff. Our main site is located in
Stanmore, Middlesex on the outskirts of London on a large 120 acre site with
217 beds and 10 operating theatres. We also have a central London outpatient
facility where a third of our 100,000 outpatient attendances per year. The
RNOH can demonstrate the highest quality of care is provided to patients.
Since 2008 we have had no cases of hospital acquired MRSA bacteraemia.
Our surgical infection rates are amongst the lowest in the country. We get more
things right first time than others with low revision rates and low readmission
rates. Over 90% of our patients would recommend treatment at our hospital to
friends and family. In some services this is over 95%. We were registered with
CQC in April 2010 with no conditions and have been classified by Department
of Health as a “performing” Trust for the last three years.
Patient & Commissioner profile

We have a truly national referral base with 95% of our patients travelling from
outside of our local Clinical Commissioning Group area. 45% of our patients
live in London with a further 20% from the “pan-Thames” South east of
England. Private work is 6% of our total activity and international work is 10%
of this.

Our Commissioner profile is scheduled to change radically in April 2013 as the
significant proportion of our services that are defined as specialist will no longer
be commissioned by local Clinical Commissioning Groups but come under the
responsibility of National Commissioning Board Local Area Team Specialist
Commissioners.
[Convert tables to map/ pie chart]
Commissioner profile 2012/13
% Trust
NHS
Activity
London CCGs
43%
East of England CCGs
20%
Other CCGs across the UK
24%
Specialist Commissioning Groups (Spinal Injuries)
7%
9
National Commissioning Group (Bone Tumour)
6%
Commissioner profile 2013/14
% Trust
NHS
Activity
NCB Local Area Team: Specialist Commissioner :
Specialist Orthopaedics
34%
NCB Local Area Team Specialist Commissioner:
Specialist Spinal Services
25%
NCB Specialist Commissioner Local Area Team:
Spinal Cord Injuries
7%
NCB Specialist Commissioner Local Area Team:
Prosthetic rehabilitation
3%
National Commissioning Group: Bone Tumour
6%
Clinical Commissioning Groups
20%
Demographic Changes – What is driving our market?
According to current Department of Health definitions, musculoskeletal conditions
include 200 different problems, affecting the muscles, joints and skeleton; over 9.6
million adults, and around 12,000 children, have a musculoskeletal condition in England
today (Musculoskeletal Services Framework, 2006). Not surprisingly, therefore,
musculoskeletal conditions are a major area of NHS expenditure which accounted for £5
billion in 2010/11.
By 2030, 16½ million of the population will be over the age of 65; 30% of 70 year olds
have arthritis. It is anticipated that there will be a significant expansion in demand
nationally as patients have orthopaedic interventions such as hip replacements at a
younger age and, by living longer, require revision. It is predicted, therefore, that there
will be a rise to over 150,000 joint replacements during this period.
An ageing population and better life expectancy for those with complex physical needs
create new challenges for healthcare delivery and demands upon specialist
musculoskeletal services.
Although medical advances mean that, to some extent, cases previously considered
“specialist” can be done in a local setting, medical training changes and the reduced
experience of newly qualified consultants mean that work previously taking place in local
hospitals is increasingly being referred onto specialist centres. This is evidenced by our
growing referral rates which have increased by an average of 5% per annum for the last
five years. Rather than low volumes of specialist cases at a local level, patient safety
and outcomes are enhanced through providing a critical mass in specialist service
centres.
10
What are our markets?
We operate in four key markets:
Market
Description
RNOH
Activity
RNOH
£
Market
Assessment
NHS
Routine
Driven by patient choice,
reputation and local
population needs – also
supports education,
training & research
activities at RNOH
2,000
spells
£15m
There is approximately £50m of
routine elective orthopaedics
currently taking place in hospitals
within 20 miles of the RNOH
NHS
“Specialist”
or
“Complex”
Driven by reputation,
clinical links to
secondary care
providers nationally
8,000
spells
£85m
We are carrying out a market
assessment of the impact of the
specialist clinical reference group
recommendations to focus specialist
activity in specialist centres or
networked with a specialist centre
Private (UK
and
internationa
l)
Driven by reputation and
private market demand
1,000
spells
£7m
There is over £100m of private
orthopaedic hospital income being
earned in 11 private hospitals in the
surrounding area. 40% of this is
being carried out by RNOH
consultants. Our market assessment
of the private orthopaedic market
has driven us to establish one of our
key service developments which we
want to implement as a Foundation
Trust to support delivery of our
vision.
Academic
Market –
Research
and
Teaching
Driven by academic
reputation and links to
academic partners – e.g.
UCL IOMS and UCL
Partners
N/A
£2m
Our growing status with UCL
Partners as the academic lead for
musculoskeletal disease is opening
up more and more opportunities for
leading on or participating in trials
across a population of 1 billion within
the UCL P catchment
Responding to the commissioning environment and competition
We have strong commissioner support for our role within the NHS. Commissioners wish
to see the RNOH position as a major specialist provider maintained in the longer term
for the benefit of patients within London and beyond. As indicated in our joint
commissioner statement on RNOH activity planning and demand management they are
committed to continued working with the Trust to further strengthen the Trust’s position
while supporting choice and contestability.
11
We recognise the challenges of the financial outlook ahead for the NHS but
fundamentally believe that this supports rather than undermines our role as providing a
critical mass of the most efficient and effective complex specialist tertiary orthopaedic
activity in the country. It would be more expensive and less effective to carry out this
activity in other organisational configurations. This has been demonstrated time and
time again in the 13 independent reviews of the RNOH over the last 30 years.
There is evidence that our core specialist work can only be provided in specialist centres
like ours. For example:Attempts that commissioners and ourselves have made to seek additional capacity from
other providers to help meet our escalating demand has indicated that the majority of
our activity could not be dealt with at non-specialist centres either in NHS or
independent sector due to case mix complexity.
We have a growing evidence base built up over a number of years of regular
approaches from health economies across the UK seeking our support to provide
specialist capacity which is not sustainable locally to them.
Demand
We have assessed a realistic growth in demand for our services as we move forward
with our plans. This is a level of residual growth after a realistic assessment of demand
management schemes.
1.4
Performance Overview
Over recent years, we have established a track record of delivery of improvement
against all quality, access and financial targets.
2010/11
2011/12
2012/13
Qtr 1 & 2
Overall Quality of Services
Score
Performing
Performing
Performing
Quality Standards &
Integrated Performance
Measures
Score
2.88
2.5
N/A
Rating
Performing
Performing
Performing
Quality – User Experience
Score
5
5
N/A
Rating
Performing
Performing
Performing
Quality- CQC Registration
Performing
Performing
Performing
Overall Finance Score
Underperforming*
Performing
Performing
Source: DH Publications “The Quarter”/”The Year”
12
*In 2010/11 the RNOH over achieved its savings targets and underlying surplus but had an I&E deficit arising
from a one off billing error that has been fully addressed
Developing a track record of financial performance
1.5
I&E
Savings
target
Actual
savings
2008/09
£0.5m surplus
£2.1m
£1.6m
2009/10
£1.0m surplus
£3.5m
£3.6m
2010/11
£0.9m deficit
£1.7m normalised
surplus
£2.3m
£3.1m
2011/12
£1.1m surplus
£4.3m
£4.3m
2012/13
forecast
£2.3m surplus
£5.4m
£5.4m
Financial Plan
The integrated business plan sets out a series of prudent assumptions that reflect the
current economic climate and outlook for the NHS financial environment. These
assumptions form the basis of the long term financial model (LTFM) that supports this
integrated business plan. The plan demonstrates that we can maintain financial
sustainability whilst redeveloping our main hospital site to support the clinical
sustainability of our high quality services. Our well established Transformation
Programme and associated Cost Improvement Plans are a fundamental part of this as
well as the continuing development of our Organisational Development Programme.
Through scenario planning the LTFM has been tested against a series of downside
risks. Despite these risks the plan outlines how the organisation can confidently meet its
strategic objectives within a well governed and financial sustainable environment.
1.6
SWOT
In developing our IBP and five year plans, we have undertaken SWOT analysis which is
incorporated in the Integrated Business Plan including our associated plans and
timescales for building on strengths, mitigating weaknesses, realising opportunities and
managing threats. A very high level headline summary of the key issues covered in the
SWOT is provided below. This shows an overall position of strength in terms of
13
providing excellent quality care in services which are generally increasing in demand
due to an ageing population
Key Strengths
Key Weaknesses
1.
We have a reputation for high quality
clinical services – independently
described as “world class”2
2.
There is existing evidence of high quality
clinical services on all quality domains –
safety, effectiveness and patient
experience
1. The fabric and estate of our main
Stanmore site is not fit for purpose until
phase 1 of our Redevelopment
Programme is complete.
3.
We have a commended model of care
that delivers “cradle to grave” services for
children, adolescents and adults with life
long conditions
4.
We have a track record of academic
partnership working with University
College London , a world class university,
with clinicians, engineers, academics
and industry working together leading to
innovation and new forms of treatment
that improve patients lives
5.
2
We have a high market share of national
orthopaedic sub-specialty work with a
number of indicators showing an
increasing trend for specialisation – for
example the new Specialist
Commissioning environment which is
driving a focus on specialist activity in
critical mass for best outcomes for
patients.
2. Our “single specialty” stand alone model
places reliance on some small subspecialties which rely on small numbers of
specialist staff and on partner
organisations for clinical support services
not viable to be provided “in-house”. The
RNOH needs to build critical mass in
some sub-specialties and ensure
partnership working with providers of
clinical support services is effective.
3. Developing our Organisational
Development Programme has highlighted
potential risk of an “inward looking”
isolated culture in some areas which is
being addressed through growing our
external focus and profile.
4. The scale of our market, our quality of
care and successful brand could lead to
demand growth outstripping capacity and
/ or productivity increases – this provides
a constant pressure on timely access to
our services which we are addressing
through a constant focus on aligning
demand and capacity in our planning.
Key Opportunities
Key Threats
1.
Utilising our Foundation Trust members
and council of governors to build our
profile and external focus.
2.
Population demographics indicate
1. Economic drivers, the funding
environment and organisational financial
sustainability assessments have
historically focused on short term cost of
patient care intervention rather than the
Professor Sir John Temple review of RNOH published in 2008
14
potentially growing demand for the
services that the RNOH provides and
potential new services which we are well
placed to provide e.g. expanded
rehabilitation and pain management
programmes. Patient Choice seeking
high quality outcomes rather than local
convenience.
1.7
3.
Using our land assets and planning
permissions to enhance private sector
partnerships e.g. increased private
patient facilities on our site.
4.
Building on our academic partnership
with UCL into developing our established
role within the UCL Partners Academic
Health Science Network e.g. leading on
the musculoskeletal element of the
academic programme
overall value added economic benefit of
high quality outcomes across patient
lifetime – getting this message across will
be a key part of increasing our external
profile and focus.
2. The service transformation programme
may not deliver at a pace sufficient to
meet redevelopment affordability
requirements and so we are building in a
number of downside mitigation plans and
mitigating service developments
3. Our purpose and vision to focus on
specialist complex case mix means that
we are likely to continue to experience
financial volatility driven by tariff volatility
income risks under Payments by Results.
It is therefore essential that we continue
our work through the Specialist
Orthopaedic Alliance and Project
Diamond Trusts working in partnership
with the Department of Health to ensure
that the tariff promotes the highest quality
and best value outcomes for complex
patients.
Risks
We have clear arrangements in place to proactively manage risks against our
organisational objectives through our Board Assurance Framework. The Board subcommittees have responsibility for specific risk areas and the Board regularly reviews all
strategic risks through the Board Assurance Framework. The main overarching risks that
we are managing and responsible committees are summarised in the table below.
Overarching Risk Area
Responsible Board
Sub-Committee
Clinical Quality Risk – If we fail to maintain
our high clinical quality standards this would
potentially lead to the removal of our license
to operate, reputational damage and loss of
demand for services.
Audit Committee and Risk Management
Committee assured by
Financial Risk – If we suffer financial
sustainability problems this would impact on
the sustainability of clinical services and/or
Audit Committee and Risk Management
Committee assured by
15

Clinical Quality Committee

Performance Committee
affordability of the redevelopment of the site
caused by:
Volatility of the National and
commissioner financial environment
impacting tariff funding

Failure to deliver Transformation
Programme and associated Cost
Improvement Programme

Performance Committee

Service Transformation Committee

Redevelopment Programme
Committee

Clinical Quality Committee
We have a track record of managing and mitigating our top rated risks. Risks
categorised as “high” risk (based on likelihood and scale of impact) within our risk
register are summarised below. These are being monitored by the Board through its
sub-committees and Board Assurance Framework.
i.
The poor nature of our estate and the sustainability of the main site estate
infrastructure and the Redevelopment programme financial sustainability – both
in terms of timing and affordability. This is being mitigated by the implementation
of our Estates Strategy and Redevelopment Programme. We have a track record
of developing and growing high quality services over the last 100 years in poor
infrastructure.
ii.
Financial Volatility due to the external environment or our own ability to deliver
the scale of Transformation and Cost Improvements to maintain financial and
clinical. This is being mitigated by having a robust and comprehensive
Transformation Programme in place supported by an Organisational
Development Programme including our Clinical engagement plans. We have
established a track record of delivering on our productivity and savings targets
and have achieved annual surplus financial performance for four years.
1.8
Leadership and Management
We have a strong and capable Board with significant clinical leadership experience
amongst both Non-Executives and Executive Directors. The Chairman has extensive
Clinical Leadership and Medical Management Experience.
Non-Executives have extensive legal, financial, business operational management,
managing significant capital programmes and property development experience, all of
which align with supporting our strategic aims and vision.
In the last three years our achievements in strengthening our leadership and
management have been considerable:
A comprehensive Board Development programme has been running for
four years tailored to supporting our strategic aims and objectives

A clinically led management model has been implemented with a New
Medical Director appointed and Clinical Directors and Clinical Leads in
16
place across the Trust – all with objectives that contribute towards the
strategic aims and objectives of the RNOH.

We have enhanced the RNOH’s track record of delivering high quality care
with a track record of delivery on financial and operational performance –
for example we have maintained zero MRSA and high friends and top
quartile family and family scores as well as sustained year on year financial
surpluses and delivery of access targets in a specialty which has proved a
major challenge to others nationally.

We have completed an independently assessed Board Governance
Assurance Framework with only 2 categories out of 15 rated as “red” in
November 2012 and we identified a fully achievable action plan to address
areas where we can improve further.
1.9
Quality
Throughout this Integrated Business Plan we will demonstrate that high quality care and
patient focus is at the heart of everything that we do. There is an embedded culture
within the RNOH that demonstrates that one of our core values – to put patients first - is
evidenced by the outcomes we achieve and the manner in which we monitor our
incidents and manage our risks.
In particular the quality of our clinical services is demonstrated through the following:
Safety – Our record on Healthcare Acquired Infection is exemplary – zero
MRSA acquired at RNOH for 4 years, surgical site infection rates a fraction
of the national average

Effectiveness – For example our low revision rates in hip and knee
arthroplasty, low readmission rates

Patient Experience – top quartile patient experience survey results including
over 90% on the friends and family test.
Our top three Quality priorities are: Continue to monitor avoidable infection and maintain our current low
levels
Increase the impact of pre-operative assessment
Dementia screening of patients over 75 years of age
Given the main risks that we are managing – relating to our estate and financial
sustainability – it is essential to the delivery of our vision that the Redevelopment and
Transformation Programme plans that we implement to manage these risks do not
adversely impact the quality of patient care. Our clinically led management model with
senior clinical support for all initiatives that we implement, monitored on behalf of the
17
Trust Board by the Clinical Quality Committee, provides assurance that clinical quality
remains our number one priority at all times.
1.10
Conclusion
The RNOH has been referred to in one of its many independent reviews as a “Jewel in
the Crown”3 of the NHS. Our services have, independently, been described as “world
class”4.
Wider NHS planning uncertainty and local RNOH historical financial constraints have
meant that the infrastructure of the hospital has not developed at the same pace as the
clinical excellence, high quality and patient and staff loyalty to the organisation. We now
have an exciting vision for the future supported by a clear strategy and underpinned by
well-developed plans described in detail in this Integrated Business Plan. The Business
Plan demonstrates that:

We have secured strategic fit support from commissioners and NHS
London. Our activity plans are supported by our commissioners and our
specialist expertise is needed and will continue to be needed by patients
and their commissioners

We can evidence clear clinical engagement with our vision, our strategy
and its associated plans

We have secured full government approval of our redevelopment plans to
move ahead with a £89m PFI scheme to secure facilities that will sustain
our national centre of excellence services

We have a track record of high quality clinical care, financial performance
and, meeting access performance standards. We have financial plans and
a comprehensive Transformation Programme and associated Cost
Improvement Plan worked up in detail and delivering. The transformation
programme will deliver sustainable performance across all key quality and
performance indicators

We have a clear supporting framework in place to deliver our vision,
including a clinical service strategy, organisational development
programme, workforce plans, IM&T strategy and implementation plans,
estates strategy and site redevelopment programme to deliver financially
and clinically sustainable specialist services into the future.
We are now ready to move ahead and realise our exciting vision, enabled by NHS
Foundation Trust status, to be the leading Specialist Orthopaedic Hospital in the UK,
building on an international profile for outstanding patient care, research and education.
3
Professor Sir John Temple Review of the RNOH March 2006
4
National Clinical Advisory Team RNOH Review October 2009
18
2.
Section 2:
2.1
Profile of the Trust
Overview
The RNOH provides a comprehensive range of musculoskeletal services on a local,
regional and national basis. These services range from acute spinal injuries, bone
tumours and complex joint reconstruction, to orthopaedic medicine and specialist
rehabilitation for those with chronic back pain. The key facts of the organisation are
provided below.
Key facts 2011/12
Trust Turnover
£111.8 million
WTE Staff
1,173
Total Inpatients activity
15,627
Outpatient attendences
99,655
Total beds
217
Number of Commissioners
152
No MRSA Bacteraemia since 2008
The Trust is based over two sites, with an Outpatient and Imaging spoke in central
London (Bolsover Street), and the main campus situated in Stanmore, Middlesex. The
surrounding geographical area therefore covers London and the northern home
counties, stretching well into the east of England Strategic Health Authority area. The
Trust also serves the wider national catchment area, with 37% of activity coming from
outside of these areas, including activity from Wales, Scotland, and Northern Ireland.
The Trust undertakes a high proportion of the sub-specialist work carried out in the UK
– for example a third of UK spinal scoliosis surgery and two thirds of specialist
peripheral nerve injury work takes place at the Trust. The RNOH is one of only five NCG
designated bone tumour centres and one of eight Spinal Cord Injury Centres in the
country. We also undertake an internationally unique mix of academic and clinical
activity (linked to University College London (UCL) and the Academic Health Sciences
Campus (AHSC) in driving high quality patient outcomes and low infection rates.
The Trust has twelve inpatient wards including two Private Patient wards. The Trust has
also has nine operating theatres, together with a full range of outpatient and imaging
facilities. The Trust has recently moved to assist other hospital providers in undertaking
their complex musculoskeletal activity, which is consistent with the aims of the
organisation in providing access for patients to high quality specialist care, and
developing orthopaedic specialisation.
The RNOH is the largest of the five specialist orthopaedic hospitals in the country with
the highest proportion of tertiary or complex work.
19
Our Commissioners and patient population
As a specialist provider the Trust serves a large number of commissioners across the
United Kingdom. As noted in the section above, the Trust has recorded activity with 152
commissioners within England, with further commissioning taking place with
commissioners within the devolved healthcare administrations of Wales, Scotland, and
Northern Ireland.
The current host commissioner for the Trust is Barnet PCT, part of North Central London
(NCL) Acute Commissioning Agency; however the spread of NHS clinical income is from
a wider diaspora, with the East of England SHA area being particularly prevalent, and
Hertfordshire PCT in particular. Substantial income streams from North West London
(NWL) Acute Commissioning Agency, Other London commissioners, and South East
Coast Specialised Commissioning Group are also noted. The remaining income is
derived from other English commissioners, together with specialised commissioning
from the National Commissioning Group and Spinal Injury consortia. The chart below
highlights the main income sources and proportions.
Chart XYZ: NHS Clinical Income 2011/12
Summary of NHS Clinical Income 2011/12
South East Coast
SCG
10%
Spinal Injury
7%
East of England
15%
Other London
13%
Extra-territorial
1%
Hertfordshire PCT
12%
Other England
12%
NCL
11%
NWL
14%
National
Commissioning
Group
5%
It is anticipated that in 2013/14 that the Trust will commission increasingly with the
National Commissioning Board Local Area Team Specialist Commissioners, as the
proportion of Trust services defined as specialist is commissioned as such. This will
20
consequently decrease the quantum of services purchased by Clinical Commissioning
Groups as the successors to PCTs. This is detailed further in Chapter 4.
Clinical services provided
The Trust undertakes a full range of musculoskeletal surgical, medical, and rehabilitation
services, provided through two main strands of surgery and rehabilitation and medicine.
The incidence of musculoskeletal conditions is common; according to current
Department of Health definitions there are over 200 different problems affecting the
muscles, joints and skeleton. It is estimated that over 9.6 million adults and 12,000
children have a musculoskeletal problem in England.
Surgery:

This is the largest component of the Trusts’ business, with over 15,600 inpatient
operations for both adults and children being undertaken in 2011/12.

The Trust is one of only five designated Bone and Soft Tissue sarcoma centres
within the country as designated by the National Commissioning Group.

The Peripheral Nerve Injury service within the RNOH is the largest tertiary centre
of its type in the United Kingdom.

The spinal surgery service within the Trust performs 29% of all scoliosis surgery
undertaken in England – the largest single provider by some margin.

The Trusts joint reconstruction service is the Xth largest in England in performing
{insert number} hip and knee replacements each year. The service has a mix of
routine and joint revision surgery, with an interest in the more complex areas,
such as the treatment of infected revisions.
Medicine and Rehabilitation:

The RNOH Spinal Cord Injuries Centre is one of only eight centres within the
country, and is the designated centre for the London area, with links to the major
trauma centres.

The Trusts rehabilitation service specialises in supporting the treatment of longstanding conditions, as part of a pain management service. This includes courses
such as the active back programme, which are designed to enable patients to live
with chronic conditions. The Trust also has a strong interest in sports medicine,
with a dedicated clinic for the assessment and treatment of injuries to
professional dancers.

The Trust provides a specialist service for the diagnosis and treatment of
metabolic bone disease.
21
Diagnostics:
The Trust provides a comprehensive range of diagnostic support services. These
include:

Radiology – The Trust provides a full range of diagnostic services including MRI
and CT. The department delivered over 46,300 examinations to patients in
2011/12.

Histopathology – The department has been approved by the National
Commissioning Group to deal with primary bone tumours, and is specialised to
work with surgical biopsies for musculoskeletal conditions. The department also
has an active research programme and is well published on the international
stage.

Other laboratory services such microbiology biochemistry, and haematology are
provided via a service level agreement with The Royal Free NHS Foundation
Trust.
Demand and size of our NHS clinical services
The charts below highlight the growth in NHS clinical activity over the last four years,
demonstrating the continued strong demand for the clinical services provided by the
Trust.
Chart ABC: NHS Inpatient Activity 2008/09 – 2011/12
18000
16000
14000
12000
10000
Non-Elective
8000
Elective
6000
4000
2000
0
2008-09
2009-10
2010-11
2011-12
Inpatient activity increased by 31% in 2010/11following the commissioning of a further
theatre, together with making use of external capacity to assist in improving access to
22
the clinical services of the Trust. This capacity was then repatriated back to the Trust in
2011/12, as inpatient activity again increased by a further 4.7%.
Chart DEF: NHS Outpatient Activity 2008/09 – 2011/12
120,000
Outpatient Attendances
100,000
80,000
60,000
40,000
20,000
0
2008-09
2009-10
2010-11
2011-12
Outpatient activity has continued to grow at a double digit rate over the recent period,
with increases of 15.1% and 11.6% in 2010/11 and 2011/12 respectively.
The relative size of the RNOH sub-specialty services is shown the chart GHI below.
23
Chart GHI: RNOH Clinical Services by Size
Other, 15%
Foot and
Ankle, 9%
Upper Limb, 7%
Joint
Reconstruction &
Sarcoma, 28%
Spinal Surgery,
14%
Spinal Injuries
(incl. Urology), 5%
PNI, 5%
Paediatrics, 9%
Medicine and
Rehabilitation, 8%
Table JKL overleaf shows the size of the Trusts sub-specialty services in terms of both
their inpatient and outpatient activity.
Table JKL: Activity by Sub-Specialty Service 2011/12
Actual Performance 2011/12
Inpatient
Spells
Sub-Specialty
Foot and Ankle
1,150
Joint Reconstruction & Sarcoma
4,252
Medicine and Rehabilitation
921
Paediatrics
1,301
Peripheral Nerve Injury
620
Spinal Injuries (incl. Urology)
897
Spinal Surgery
1,947
Upper Limb
1,491
Other
773
Total
13,352
Outpatient
Attendances
9,579
27,168
8,400
8,662
5,121
4,524
13,853
5,897
16,451
99,655
As stated earlier, the Trust operates from two sites – Bolsover Street in central London,
and the main hub at Stanmore. Bolsover Street is a satellite unit with outpatient and
diagnostic facilities only, with complex imaging, surgery, and a greater share of
outpatient activity being performed at Stanmore. Actual outpatient activity undertaken at
each site in 2011/12 is shown below in Table MNO.
24
Table MNO: Outpatient Activity by Site 2011/12
80,000
70,000
60,000
50,000
40,000
Stanmore
30,000
Bolsover St
20,000
10,000
0
2009/10
2010/11
2011/12
Governance and organisational structure
The chart below shows Trust Board and sub-committee structure. This allows a clear
focus on the delivery of the organisations key objectives through targeted subcommittees of the Board. On an operational level, this structure is in turn supported by a
clinical divisional structure, with Clinical Leads for each area. (Chart to be re-done)
25
Protected Assets
The Trust operates across two sites, with Outline Business Case Approval having been
gained for a PFI redevelopment of the Stanmore site from the Department of Health in
May 2012. The £89 million scheme will re-provide the bulk of inpatient accommodation
and imaging within modern purpose built accommodation. Outpatients, theatres, and
critical care will follow in subsequent phases. As a consequence, significant parts of the
Stanmore site are scheduled for demolition over the coming two years. The majority of
the buildings within the Trust estate are protected assets, with the exception of on-site
living accommodation. The Stanmore site is owned on a freehold basis, with the
Bolsover Street outpatient facility rented on a long leasehold basis. A full list of protected
assets can be seen in Appendix 1. [JW to provide a list of protected assets]
Financial Summary
26
2.2
The Trust has continued to make progress in clearing its historical deficits
and delivered a surplus of £1.1 million for 2011/12, and is also forecast to
achieve the financial plan of a £2.3 million surplus in 2012/13. This will clear
the historical deficit in 2012/13. Income and expenditure performance
forecast for the current year, and the last three historic years is shown below
in Table PQR.
2.3
Table PQR: Historic Income and Expenditure performance
Historic Performance
Income
Expenditure
EBITDA
Non-Operating expenses and financing
Net surplus excluding Impairments
2009/10
Actual £M
94.4
-88.5
5.9
-4.8
1.1
2010/11
Actual £M
102.0
-98.3
3.7
-4.8
-1.1
2011/12
Actual £M
111.8
-105.7
6.1
-5.0
1.1
2012/13
Forecast £M
114.1
-106.4
7.7
-5.4
2.3
2.4
The deficit for 2010/11 principally arose from a one-off billing error which has
been fully addressed. The normalised position for 2010/11 excluding this
item would have been a surplus of £1.7 million.
2.5
The Trusts future plans demonstrate the delivery of a financial risk rating of 3
in the immediate period, before moving to a risk rating of 4 later in the plan.
Performance reports to both the Performance Committee and Board show
Trust performance against the five metrics used by Monitor. These are
detailed below in Table STU, and show the Trust is forecast to achieve a risk
rating of 4 by the end of the financial year.
Table STU: 2012/13 current and forecast financial risk rating
Monitor Risk Rating
EBITDA margin
EBITDA achieved
Net return after financing (NRAF)
I&E surplus margin
Liquidity ratio (days)
Overall risk rating
2012/13
Forecast
6.2%
100.0%
3.5%
2.0%
18.0%
4
Reference Cost Index
The Trusts’ reference cost index (RCI) scores since 2007/08 are set out in Table XYZ
below. As can be seen from the table, the RCI score for the Trust has decreased
markedly in the last couple of years.
27
Table XYZ: Reference Cost Index Scores 2007/08 – 2011/12
Year
Reference Cost Index
2008/09
148
2009/10
157
2010/11
132
2011/12
135
Although the Trust will aim to reduce its reference costs index through reduction in
costs, as a highly specialist provider in low volume/ high cost care, the organisation is
very likely to continue to have an RCI above 100. This is further evidenced by the
number of specialist hospitals having an RCI above 100 including successful Foundation
Trusts. Examples of such are Papworth Hospital NHS Foundation Trust (RCI 116,
Monitor Financial Risk Rating level 5), Great Ormond Street Hospital for Children NHS
Foundation Trust (RCI 122, Monitor Financial Risk Rating level 4) and The Royal
Orthopaedic Hospital NHS Foundation Trust (RCI 113, Monitor Financial Risk Rating
level 4). The Trust will also proactively work to ensure Reference Costs adequately
reflects the specialist nature of the care provided to further enhance the use of the
information produced.
Partnership and procurement arrangements
The Trust has a number of partnership arrangements covered by service agreements.
The material items are set out below:

London Southbank University supports the nurse education programmes.

London Deanery partners in the rotation of junior medical staff.

Clinical agreements with various other NHS providers in the provision of services
to the Trust as a stand-alone single specialty provider. These include The Royal
Free NHS Foundation Trust (clinical laboratory services including microbiology
and haematology with a value of £1.6 million), North West London NHS Trust
(paediatric medical cover), and Barnet and Chase Farm NHS Trust (medical and
general surgical cover).

Close working with the University College London Institute of Orthopaedics and
Musculoskeletal Science (IOMS). The Trust and IOMS jointly work together on
various research and development items.
28

The Trust has also entered into a short term agreement in 2012/13 with private
providers in order to maintain access targets in the early part of the year. This is
estimated to have a value of £1 million.
For its strategic procurement the Trust is a member of the London Procurement Project
(LPP). This acts as a procurement hub to manage local and national contracts across
the London area. Membership is on annual basis.
The Trust also has in 2012/13 entered into a five year management agreement with a
private provider to work with the Trust in increasing the turnover and profitability of the
Trusts’ Private Patient Unit. The private provider will pay the Trust £1 million for this
management concession, and will in turn achieve a graduated return above certain
performance thresholds. As the Trust is currently finalising a proposed private patient
joint venture which would necessitate working with private providers in future to access
sufficient capital, this existing arrangement provides expertise and management
resource to grow the business in the interim.
The Trust is in a principal partnership arrangement with the Specialist Orthopaedic
Alliance (SOA). The SOA has a mutually agreed partnership agreement and is made up
of a partnership board comprising the Chairs, Chief Executives and Medical Directors
from member organisations. The Alliance employs a project manager who works with all
organisations on the work streams determined by the partnership board.
In addition to the RNOH, the founder members of the Alliance are:

Royal Orthopaedic Hospital NHS Foundation Trust

Nuffield Orthopaedic Centre NHS Trust (part of John Radcliffe NHS Trust)

Robert Jones Agnes Hunt NHS Foundation Trust

Wrightington Hospital (part of Wrightington, Wigan and Leigh NHS Foundation
Trust)
The alliance exists to act as an advocate for specialist NHS orthopaedic services,
working with the Department of Health in improving the application of Payment by
Results to specialist orthopaedics. It also supports the wider role of specialist
orthopaedic services including supporting associated teaching and research work.
2.6
Care Quality Commission
The Trust assesses compliance with the Care Quality Commission (CQC) outcomes for
safety and quality on a regular basis, with the Director of Nursing being the designated
executive lead. The Trust reviews performance against the CQC’s Quality and Risk
profiles frequently, with the Board being informed of points of interest. The CQC
inspected the Trust in October 2011 and assessed that the Trust was meeting all of the
standards reviewed at that inspection.
29
The Trust is not however fully compliant with all Care Quality Commission essential
standards of quality and safety, with non-compliance being declared for Outcome 10
(Safety and suitability of premises), which states that:
People using the service and people who work in or visit the premises:

Are in safe, accessible surroundings that promote their wellbeing. This is because
providers who comply with the regulations will:

Make sure that people using services, staff and others know they are protected
against the risks of unsafe or unsuitable premises by:
o the design and layout of the premises being suitable for carrying out the
regulated activity
o appropriate measures being in place to ensure the security of the premises
o the premises and any grounds being adequately maintained
o compliance with any legal requirements relating to the premises

Take account of any relevant design, technical and operational standards and
manage all risks in relation to the premises.
The action plan to meet compliance with this standard is the redevelopment of the Trust,
which had its’ Outline Business Case Addendum approved by the Department of Health
in May 2012. The Trust is currently working with shortlisted partners to build the new
hospital, with completion expected in 2016.
30
Chapter 3: Strategy
3.1
Vision and strategic intention
The Trust Board agrees that our vision is to be:
“The UK’s leading specialist orthopaedic hospital building on an international
profile for outstanding patient care, research and education”.
We want to be the provider of choice in the UK for specialist orthopaedic high quality
care. Our unique geographical position, the high quality of services we provide and our
leading reputation in patient care, place us in a strong position to achieve this vision in
the new NHS.
31
To support this vision we have agreed an organisational development strategy which
includes the values and the underpinning organisational behaviours that the Trust has
adopted to enable delivery of our vision and strategy:
32
Patients first, always
 Treating patients as individuals and with compassion
 Protecting patients’ rights to courtesy and dignity
 Meeting patients’ needs and expectations
 Providing a clinically safe environment
 Monitoring and maintaining high standards
Excellence, in all we do

Achieving optimum clinical outcomes

Striving for excellence through collaboration and innovation

Practice based on evidence, education and research

Leading the development and dissemination of best practice in
musculoskeletal care

Rewarding and celebrating excellence

Maximising the benefits of partnerships

Attracting and retaining the best people
Honesty, Trust and Respect, for each other

Speaking well of and supporting each other

Challenging inappropriate behaviour from patients or colleagues

Being transparent and open with each other

Working as a team to deliver Trust-wide goals and targets

Leading by example

Listening actively

Maintaining confidentiality for patients and colleagues
Equality for all

Reaping the benefits of diversity

Ensuring equitable care for all our patients

Designing services to meet the needs of all our patient groups

Challenging prejudice and discrimination

Valuing the diversity of ideas, roles and backgrounds

Celebrating difference and achievement at all levels of the Trust
3.2
Strategic Aims
We have developed four key strategic aims to deliver our vision. These are supported by
longer term programmes such as our Transformation Programme and Redevelopment
Programmes as well as embedded within our robust annual clinically led business
planning and performance management regime.
33
This ensures our strategic aims are linked clearly to our organisational objectives. Each
strategic aim has clear objectives and has set measurable targets for delivery and
mechanisms for monitoring improvement. Every objective we set as a Trust is assessed
against the delivery of these aims through Key Performance Indicators (KPIs) and will
need to demonstrate a clear link to QIPP principles, particularly our transformation plans
for the future. Our Board Assurance Framework provides a quarterly update to the
Board on risk to delivery against key organisational objectives. Our four strategic aims:




Maintaining and developing orthopaedic specialisation
Expanding the evidence base that we deliver high quality clinical
services
Building academic strength
Expanding our external profile and focus
Our strategic aims are all interconnected and mutually enhancing. For example our aim
to develop orthopaedic specialisation is enhanced by expanding the evidence that we
provide high quality care. High volumes of complex caseload enhance our ability to raise
our academic profile. Increasing our external focus and profile by working in partnership
with other hospitals allows us to support the provision of routine local work elsewhere
and facilitate a smooth pathway for specialist activity appropriate to be carried out at our
main site in Stanmore.
The benefits realised through the delivery of the four strategic aims and the timeline over
which those will be achieved are set out in detail in Chapter 5 and summarised below.
Strategic Aim 1: Maintaining and developing orthopaedic specialisation - providing the
scale and range of tertiary sub-specialist orthopaedic5 clinical activity befitting an
international specialist orthopaedic centre of excellence.
5
Specialised orthopaedics services are those neuro-musculoskeletal services which due to rarity,
complexity or the required expertise are focused in certain centres. These services are currently provided
in 25-30 hospitals in England, of which 5 are specialist stand-alone hospitals. This includes those that
provide the most specialised nationally commissioned services, those that provide a range of complex
multidisciplinary team delivered services and those that deliver trauma services where they are
designated major trauma centres within a recognised Trauma Network.
34

“Specialist” activity is currently 80% of our work, as defined by specialist services
definition sets, with the remaining 20% “routine” (local or patient choice driven
activity).

Five years ago the specialist: routine split was 75%:25%. Therefore we have
been delivering an increasing trend towards a higher proportion of specialist
work and to support our strategic aim we will continue respond to this trend by
focusing our capacity at our Stanmore site on delivering specialist activity,
supported by the initiatives described in this section.

At our main hub in Stanmore, we are uniquely placed to meet the service needs
of patients that are not provided in local settings and therefore consolidate our
market position as a leading provider of orthopaedic sub-specialist work. To
meet our vision we need to make sure that we provide the right range of
services that our commissioners and patients need and to a scale that
ensures that these services are individually sustainable and deliver excellent
outcomes for our patients.

We have analysed our services against those provided in other centres in the UK
and Internationally through our membership of the International Society of
Orthopaedic Centres. The table below illustrates where we currently sit in the
UK in terms of the range of services provided in each centre.
Designated Spinal Cord Injury
Centre
NCG Bone Tumour Centre
NCG Peripheral Nerve Injury
Joint Reconstruction – routine
Joint Reconstruction – tertiary
Spinal Surgery – tertiary
Spinal Surgery – complex
spinal deformity
RNOH
NOC
ROH
RJAH
Wrightington





Local Trusts
Elective
Orthopaedic *





































* Barnet Chase Farm, Royal Free, UCLH, Whittington, North West London Hospitals

In the last five years, we have implemented initiatives to consolidate our position
against this strategic aim: We have shifted our case mix towards more specialist activity provision.
We have increased productivity to enable 5% year on year activity income
growth on average across all sub-specialties. Underlying referral growth
has been at an average of c2.5%. Therefore, both the quantity and
complexity of referral has increased. We have implemented referral criteria
to ensure referrals received are appropriate to the RNOH (and therefore
35





reduced routine referrals that can be more appropriately dealt with locally
elsewhere). Therefore we focus our capacity on our core tertiary work.
We have expanded our Sarcoma Multi-Disciplinary Team working in
partnership with UCLH to ensure an effective and efficient cancer pathway
is delivered for high volumes of patients – we are now the largest centre in
the UK for this service.
We have strengthened our microbiology links to support the improved
consolidation of bone infection services in partnership with The Royal Free
Hospital.
We have developed our links to support London trauma services through
outreach for spinal cord injury patients and links with the Trauma centres
for Peripheral Nerve Injury referrals.
We have expanded significantly the scale of our specialist rehabilitation
programmes through the introduction of hotel based services
The strategic aim is supported by our commissioners as evidenced through our
joint statement on activity planning and demand management. This includes
the following section on the RNOH’s “strategic alignment”:“Commissioners wish to see the RNOH position as a major specialist provider
maintained in the longer term for the benefit of patients within North Central
London and beyond. We are committed to continued working with the Trust to
further strengthen the Trust’s position while supporting choice and
contestability.
The range of neuro-musculoskeletal services provided by the Royal National
Orthopaedic Hospital (RNOH) NHS Trust should be primarily focused on
providing an appropriate safe and high quality critical mass of planned elective
specialist services for patients with complex musculoskeletal conditions. In
addition the Trust supports urgent patient pathways in bone and soft tissue
sarcoma in partnership with UCLH and transfers from trauma centres and other
secondary care providers for spinal cord injury repair and rehabilitation.
In respect of planned elective care, in most cases the optimum patient pathway
is through local services for routine care that is appropriate to be provided in a
local setting in primary and secondary care. Once the need for specialist
intervention is highlighted in the local setting referral to RNOH should take
place. This broadly comes through one of the following routes:Secondary care referral for service not available locally
Secondary care referral for second opinion
GP referral for services not available locally
GP referral for second opinion or where the local intervention has
not delivered an appropriate outcome for the patient.
The RNOH provides an element of local and patient choice routine activity
which could be carried out at other secondary care providers. This will continue
36
to support its role in education and training but provision of such activity is not
the primary role of the organisation.
This balance of specialist and complex work will provide optimum quality of
care and efficiency/productivity to providers and commissioners.

Over the next five years we will further enhance our performance and delivery of
this strategic aim through the delivery of the following objectives.
Delivery of our Transformation Programme
To meet our strategic aim we need to respond to the trend towards patients and
commissioners demanding more and more specialist work, whilst directing routine work
to more appropriate local settings. Therefore, we need to optimise our capacity to
respond to this as well as support clinical quality and financial sustainability. The
Transformation Programme will deliver high quality, innovation, productivity and
prevention to ensure that we are the safest, most efficient and effective provider of
specialist orthopaedics across the whole patient pathway in the UK. The benefits to
patients are described in more detail in Chapter 5. Some examples of the objectives of
the service transformation programme that will support our aim to have clinically and
financially sustainable services that develop orthopaedic specialisation are:
Transforming Inpatient Pathways:High quality pre-operative assessment – in three years all of those patients who would
benefit from comprehensive pre-operative assessment will receive this within the
optimum window of 4-6 weeks before their admission.
Achieving the highest standards in quality and productivity in theatre utilisation. We will
increase theatre utilisation from current levels of 86% to 95% over three years.
Eliminating unnecessary hospital stays and smoothing bed occupancy so that our
inpatient beds are used effectively. This will reduce the overall bed requirement for
current activity by 22 beds from 217 beds to 195 beds by the time we move into our new
hospital in 2016.
Transforming Outpatient Pathways
Eliminating unnecessary outpatient follow-up appointments and ensuring care is
transferred locally to patients where this is more appropriate. We have already reduced
our outpatient follow-up ratio from 1:5 three years ago to 1:4 currently, in line with the
average of our specialist orthopaedic alliance benchmark partners. This will be further
reduced to 1:3 in the next three years in areas where the follow ups are unnecessary for
patients and local follow up or supported discharge is more appropriate.
The service transformation programme is led by the Deputy Chief Executive who is the
Director of Operations and Service Transformation and is supported by a Chief
Executive and Medical Director led implementation of a medical management and
clinical engagement plan that ensures all clinical service transformation projects are
clinically led and maintain or enhance the quality outcomes for our patients.
37
The clinically led Clinical Quality Committee reviews the Transformation Programme
implementation plans and and post-implementation reviews to provide assurance to the
Risk Management Committee and Trust Board that all clinical service transformation
projects maintain or enhance the quality outcomes for our patients. This is also linked to
Trust objectives and monitored by the Board via regular updates to the Board Assurance
framework.
Overall the transformation programme will increase our productivity by an average of 5%
a year each year for five years which supports both our clinical and financial viability and
therefore our ability to develop orthopaedic specialisation. The objectives of the
transformation programme including the measurable targets and timescales
summarised above are therefore aligned to our strategic aims. The performance of the
transformation programme is monitored on behalf of the Trust Board by the Service
Transformation Committee. This reports on a monthly basis to the Trust Board and
linked our overarching objectives via the Board Assurance Framework.
Delivery of our Redevelopment Programme

Our main risk to delivering our strategic aim to maintain and develop orthopaedic
specialisation is the sustainability of our estate and infrastructure.

We are managing this risk through our Redevelopment Programme, underpinned
by our Estates Strategy, which will ensure that we developing a sustainable high
quality estate to match our high quality clinical care.

Our Redevelopment Programme is described in more detail in Chapter 5 and has
an extensive delivery plan with milestones that are monitored monthly by the
Trust Board and in more detail through the through the Redevelopment
Programme Board on a monthly basis.

The Estates Strategy and associated master plan describes how we are
managing our estates risks in the short term during the construction of our new
hospital. This is largely driven by our track record of prioritising necessary
backlog maintenance work through our annual business planning process. This
keeps our infrastructure safe despite the significantly ageing profile of our
buildings.

The Redevelopment Programme is led by the Director of Estates and Projects
and has a full PFI phase 1 Project Director and in-house support team in place as
well as a comprehensive set of external advisors to the programme.

Phase 1 of our new facilities have full government approval and are planned to
be operational in 2016 which will enable a sustainable estate to be in place until
subsequent re-development of remaining retained state is needed in 10-15 years.

Specialist Rehabilitation & Pain Management Service Development – a shift of
5% between the balance of surgical to non-surgical income over 5 years.

We recognise in our Risk Register and SWOT analysis that we need to build
scale/critical mass in all services that are small in scale – this applies to some
non-surgical sub-specialty areas. One of our key Service Development initiatives
38
described in Chapter 5 is therefore how we will utilise existing on and offsite
capacity to provide commissioners with

Multi-disciplinary specialist rehabilitation programmes

Expanded sports injuries coverage

A broader range of rheumatology
Delivery of the contribution of this service development to our strategic aim will be
tracked through our annual business planning process where we set specific activity
plans that will target shifts from surgical to non-surgical activity. This will be monitored by
the directly by the Trust Board through annual clinical service line updates and annual
business plan approval and in-year
through monthly Performance Committee
monitoring of activity against performance targets.
Strategic Aim 2: Expanding the evidence base that we deliver high quality clinical
services – providing clinical activity to a standard that demonstrates services are safe,
effective and provide the best possible experience. This includes timely referral to
treatment access to services and transport accessibility to our sites for patients, many of
whom will have significant mobility impairment.
High quality care and patient focus is at the heart of everything that we do. There is an
embedded culture within the RNOH that demonstrates that one of our core values – to
put patients first - is evidenced by the outcomes we achieve and the “Board to ward”
manner in which we monitor our incidents and manage our risks.
The existing evidence base that we deliver high quality outcomes is extensive. For
example:i.
No MRSA bacteraemia acquired at RNOH since 2008
ii.
Top quartile friends and family %s and patient and staff satisfaction
compared to all NHS hospitals
iii.
Surgical site infection rates a fraction of the national average in
orthopaedics, despite an extremely complex surgical case mix
iv.
Hip & Knee joint arthroplasty revision rates significantly lower than the
national average
v.
Top quartile delivery of orthopaedic referral to treatment access targets in a
specialty that has struggled to do this nationally
vi.
Establishing a rolling programme of clinical audit mornings for each clinical
unit to present their outcomes to the rest of the Trust
vii.
Establishing a rolling programme of presentations to Trust Board from each
clinical unit to present their outcomes and plans for the future
We have recognised that expanding our evidence base is essential to supporting our
vision. The RNOH exists because it can deliver excellent outcomes for patients with
complex specialist needs that are better than carrying out this activity in low volumes in
39
local hospitals. However it is essential that we continue demonstrate to ourselves and
the outside world that we do deliver better outcomes and that we can evidence this. This
is because:i. We need to continue to act quickly for our patients if there is any evidence is not
consistent with demonstrating we get the best possible outcomes.
ii. We need to manage the risk that the complexity of the case mix that we treat lead
to indications that our outcomes are not as good as elsewhere even though
this may be driven by inevitable case mix complexity issues rather than
representing that this care could be better provided elsewhere. For example
the RNOH appeared initially as an outlier in national PROMs information for
hip and knee replacements. Subsequent work that we have carried out with
the Department of Health to review the underlying evidence for why our
outcomes appeared to be low indicated that once the data was adjusted for
appropriate measures of case-mix complexity our position improved
significantly showing that we had made significant improvements to patients
who had significant complex needs and not comparable to the complexity of
case mix at other centres.
iii. It supports the consultant revalidation process and provides assurance that we
recruit and retain the best clinicians in the field of specialist orthopaedics.
To support this strategic aim in 2012 we agreed an Outcomes Strategy led jointly by our
Medical Director and Director of Workforce, Corporate Affairs and IM&T. This is
supported this with investment in Information technology to allow a Trust wide approach
to outcomes monitoring that can be tailored to individual clinical unit needs.
Our estates strategy recognises that public transport and car parking is, like our clinical
buildings, in need of redevelopment. We have recognised as part of our Redevelopment
Programme and underpinning Estates Strategy that transport access to our main site
and car parking on our main site are significant patient experience issues particularly
given that two thirds of our patients have significant mobility disability. Therefore our
transport and car parking plans are aligned to improve this element of the quality of
patient experience of our services.
Over the next five years we will further enhance our performance and delivery of this
strategic aim through the delivery of the following objectives:
i.
Completing the roll out of Trust wide outcomes data collection tailored to each
unit. This has begun in 3 of our clinical units in 2012/13 and will be completed
across all units by June 2014.
ii.
We will begin publishing outcomes data on our website by March 2013 and
extend the depth and range of indicators that we publish by June 2014.
iii.
We will continue to align capacity with projected demand agreed with
commissioners to ensure to ensure that our referral to treatment access targets
continue to be met. This will be monitored via the annual clinically led business
planning process through Performance Committee to trust Board.
40
iv.
We will utilise the expanded outcomes evidence base to inform the on-going
annual rolling programme of presentations to clinical audit mornings within the
Trust and to Trust Board.
v.
We will implement enhanced public transport access to our site and car parking
improvements for patients with significant mobility disability as. Public transport
and patient car parking improvements will be resolved through negotiations with
the local authority including section 106 agreements that form part of our revised
outline planning application scheduled to be approved in March 2013 and
implemented as part of the phase 1 PFI development by 2016.
Progress on the Outcomes Strategy is monitored by the IM&T Committee on behalf of
the Trust Board with progress reported to the Trust Board on a Quarterly basis.
Progress on improved transport and car parking links is monitored by the
Redevelopment Programme Board which reports to the Trust Board on a regular basis.
Strategic Aim 3: Building academic strength – working in partnership with UCL, a world
leading university and the UCL Partners Academic Health Sciences Network.
This strategic aim will help build our profile and reputation and will also support high
quality patient care outcomes through supporting an embedded culture of clinical audit,
outcomes measurement, service evaluation and research, training and education.
The primary purpose of Academic Health Science Networks (AHSNs), as proposed in
the Department of Health’s paper on Innovation, Health and Wealth (December 2011), is
to deliver proven innovation into practice at scale, both to improve patient and
population health outcomes, and to create wealth for our nation.
Our partnership with UCL and UCL Partners puts the RNOH in a unique position within
the NHS as a potential leader and collaborator in the development of innovation and
improvements in the treatment of musculoskeletal disease and to generate wealth in
partnership with industry.
We have examples of partnership working for wealth creation and innovative
improvements in patient care. For example Stanmore Implants Worldwide Ltd was
established in 1996 as a development company through UCL Business as the
culmination of collaboration between the clinicians at the Royal National Orthopaedic
Hospital and the UCL Department of Biomedical Engineering. In 2008 Stanmore
Implants Worldwide was sold by UCL for over £10 million to a private equity group and
has attracted further multimillion innovation investment since then. It has doubled in
turnover to over £10 million per annum with global income now matching income
generated from within the UK. This partnership between Stanmore Implants Worldwide,
UCL and the NHS facilitates the design, manufacture and marketing of custom-made
implant service with a portfolio of orthopaedic implants for limb salvage and complex
joint replacement, and is known for creating some of the world’s most successful
implants, including the Stanmore Hip and the award-winning non-invasive extendible
prosthesis, which has resulted in improved quality-of-life for many thousands of children
through to adulthood. Current developments include the Intraosseous Transcutaneous
Amputation Prosthesis (ITAP), a device for directly attaching prostheses to the skeleton
of amputees. It is being developed for a wide range of applications including upper and
41
lower limb, digits and craniofacial prostheses. ITAP builds on ground-breaking research
undertaken by UCL with a design that, by mimicking successful skin-penetrating natural
structures (such as deer antler), smoothly integrates with the skin, offering an effective
barrier against infection, which has previously limited the application of percutaneous
implants to dental implants and craniofacial applications.
Whilst there is significant commitment to training and education activities, we currently
have a relatively low critical mass of academic research activity and there is a huge
potential to expand this without significant risk or net cost to the Trust. This has been
recognised by independent reviews carried out by UCL and by the RNOH. The scale of
academic activities needs to grow to ensure we have a sustainable critical mass of
academic activities. This scale of academic activities will be measured by patients
recruited into clinical trials, grant income and high impact publications. This strategic aim
supports our vision by:
Increasing the scale of academic activity and academic output from the Stanmore
site will ensure that the RNOH UCL P musculoskeletal partnership is sustainable

Stimulating research that leads to innovation which will improve quality of care for
patients both at RNOH and elsewhere

Strengthening our national and international profile and brand

Support recruitment and retention through maintaining our status as a training and
education centre – 25% of the future orthopaedic surgeons in the UK are trained at
RNOH
To support this strategic aim we have agreed a Joint Academic Plan with UCL led jointly
by our Medical Director and Professor of Clinical Orthopaedics in partnership with IOMS.
The Joint Academic Plan is monitored on behalf of the Trust Board by the Joint
Academic Committee which reports to the Trust Board on a regular basis.
The Joint Academic Plan is a key Service Development described in more detail in
Chapter 5, summarised below.
Over the next 5 years we will achieve the following objectives to help deliver our
strategic aim of growing our academic strength
Research will be directed to fulfil the unmet needs of our local academic health science
network, UCLP, as well as the more specialist fields relevant to global orthopaedic
clinical problems.
The local, UCLP focused areas that the RNOH will develop over the next 5 years
include:
Health service delivery research. This aims to improve the quality and effectiveness of
orthopaedic treatments in the NHS.

MDT working. The Bone Tumour Unit MDT has led the way.
Recently the Spinal and Joint Reconstruction Units have developed
MDT working that may be an effective sustainable method of
42

delivering RNOH opinion to other hospitals. We will attract grants
and publish papers on this within 3 years.
Imaging, such as the use of technology to provide, market and
feedback our 2nd opinion from externally performed imaging sent
over the image exchange portal. We will attract grants and publish
papers on this within 3 years.
Rehabilitation. This is currently a major strength of the RNOH. The Aspire centre is
currently focused on spinal cord injury but can contribute more widely and apply its
expertise into non-spine areas and efforts should be made to consider it as a centre for
all rehabilitation research at the RNOH
The global areas that the RNOH will deliver on include:

Device evaluation trials. This will help action the “Beyond Compliance”
initiative set out by the British Orthopaedic Association and MHRA to improve
the introduction of new implants. It is also pertinent to the UCL clinical trials
unit which needs help with medical device trials. The RNOH should be a hub
for all musculoskeletal studies involving medical devices.
Imaging evaluation trials: becoming a reference centre for musculoskeletal
imaging equipment and protocols.
Rare diseases. The recent example of a nature genetics paper from Professor
Adrienne Flanagan’s biobank of bone tumours shows that value of rare
diseases to understanding fundamental processes. This long term approach
should be supported by pumping priming projects to develop the applications
to major grant awarders.


Objectives for mechanism of delivering the research
We are targeting the recruitment of 10% of all new patients (in many hospitals the
highest recruiters are haematology with 20% and oncology with 7%) to some form of
clinical trial by 2018. Research should be organized in two levels. First, at the hospitalwide level the following areas will be prioritised within existing NHS and grant funding:






A CLRN recruitment administrator
A biobank administrator
Expansion of the clinical trials coordinators along with the expansion of
clinical trials.
Increased epidemiology and linking with a health service delivery unit
Increased statistical assistance
A subcontracted research management arrangement
Secondly, at the level of the clinical units, the following will be implemented in each
clinical unit by March 2015:

A research leader to coordinate the distribution of any research sessions,
plan a roadmap and liaise with RNOH R&D and UCL. This position is best
filled by a consultant within 5 years of appointment and not the clinical lead.
This will be identified within existing consultant SPA time.
43

Specific recommendations for each clinical unit to are included in the annual
business planning round.
General recommendations for support to be provided to all clinical units over the next 5
years

IT support for data capture and analysis. The Outcomes Strategy, described
under our previous strategic aim, is a key part of this.
Allocated research sessions for some clinicians, supported by grant funding
Clear links with UCL and with UCL staff that are relevant to their area,
particularly those who work on the RNOH campus.
Assistance with research management via the Research and Development
office of the RNOH working in partnership with UCL P R&D governance
arrangements.
The dissemination of research students to each clinical unit (MSc, BSc,
DocOrth)
Honorary UCL senior lecturer contracts if UCL criteria fulfilled
Access to adequate support from R&D for: study evaluation, research
governance paperwork, statistics and epidemiology.






We will also implement the following general recommendations on what each clinical
unit will deliver to support this strategic aim.




A 5 year “roadmap” of research
Justification and assessment at appraisal of consultants with SPA funded
research time
Collaboration within the UCLP network.
Research support will be monitored and judged against output on a yearly
basis.
In addition to monitoring by the Joint Academic Committee the objectives of the Joint
Academic Plan will be embedded within the annual clinically led business planning
process and risks to the delivery of the objectives monitored via the Board Assurance
Framework on a quarterly basis.
Strategic Aim 4: Expanding our external profile and focus – building an international
reputation for clinical, operational and academic expertise supported by working in
partnership with other NHS and independent health care providers.
We need to maintain key stakeholder support for our model of care and to do this we
need to work in partnership with others to demonstrate the added value that our
specialist knowledge and skills can bring to others and what they can bring to us. This
will not only promote our profile and demand for our services (and thereby helping
manage financial volatility risk) but also prevent our model of care and culture becoming
too isolated and inward looking and will promote development, shared learning,
multidisciplinary development and new ways of working.
The following are examples of where we have worked in partnership to support this
strategic aim in recent years:44

“Insourcing” specialist musculoskeletal activity for commissioners and other
providers to provide additional capacity when local services cannot meet
demand for services.

“Outsourcing” capacity - for example in the independent sector with patient
care provided by our consultants
We have agreed an Organisational Development Programme and associated
communications plan. This has included work on our “brand” and organisational values
to support our vision and brand.
Over the next 5 years we will achieve the following objectives to help deliver our
strategic aim of expanding our external profile:
Whilst we have joint consultant appointments and work in partnership with
others on insourcing and outsourcing activity we have not yet set up a
separately branded “RNOH@” clinical service. We have several examples of
this that have been discussed in principle but none are yet in place. We have
set an objective to deliver agreement of one example being in place as a
pilot from April 2013.

Every 6 months the Trust Board reviews the arrangements in place for the
clinical support services that we buy in from other NHS providers. We will
continue to do this and consider whether more of these services and their
associated contract management and governance arrangements need to be
consolidated through a single preferred partner provider or whether they
should continue to be spread across a number of other providers.
Progress in delivery of this strategic aim and the objectives to support delivery will be led
by the Chief Executive and monitored via the Trust Board through the Chief Executives
report to the Trust Board.
3.3
Rationale for NHS Foundation Trust status
Foundation Trust status enables our vision to be delivered. We have clear reasons why
becoming a Foundation Trust will support this:i.
We will be in charge of our own destiny and able to innovate to make the
best use of our extensive land and buildings for the benefit of our patients,
staff and partners. This will allow us to focus our services and plans on our
strategic aims in partnership with our members through or council of
governors.
ii.
Foundation Trust status will enhance our profile and brand as a national
centre of excellence and therefore support our Organisational Development
Programme and strategic aim to enhance our external profile and focus.
This is because we will have demonstrated to our stakeholders that we are
a sustainable, well managed, independent organisation with a focus on our
vision to provide high quality services that provide value for money to the
NHS.
45
iii.
Alongside our work to develop and enhance our brand and profile, we can
utilise the growing stakeholder network that comes with Foundation Trust
status to raise our profile and enhance clinical and academic innovation.
This, in turn will help us to retain and recruit the best specialist staff in
the country to protect and enhance our patient care standards – this
supports our organisational development programme.
iv.
As a separate organisation that understands the unique market in which we
operate, we will be better placed to meet the needs of our patients and
commissioners in the most efficient and effective manner, with a clear
focus on understanding our patient outcomes and the value added by our
services to the national health economy. Expertise to meet the specialist
needs of our patients efficiently to realise best outcomes for our patients
and added value will be prioritised and not diluted as they would be if we
were part of a larger organisation.
v.
We will give our patients, partners and staff more say in what we do
and develop our services in line with their needs. Senior clinicians and staff
will have a voice. This will engender the continued loyalty, dedication
and expertise that we are proud of at the RNOH. This will reinforce our
services and support recruitment and retention of a high calibre specialist
workforce.
vi.
Our members and governors will be the guardians of our values and
will actively support our planning and strategic direction as an
organisation.
We will utilise our freedoms as a Foundation Trusts to enable the implementation of our
key service development of a new Private Patient facility on our site as detailed in
section 5.
3.4
Consultation Process
To update after Board discussion
The original formal consultation period ran from 09 July - 30 September 2007. The three
month consultation period included a wide range of activities to maximise awareness of
our proposals and to ensure that responses were representative of our proposed FT
constituencies. This was achieved through, for example, visits to local amenities such as
libraries, visits to a local university, mailshots to local and UK-wide patients, meetings
with members of the public and staff. During the consultation, we took the opportunity to
attract FT members. Since 2007, we have continued to engage with our FT members
through regular correspondence and meetings.
We have refreshed our consultation during 2012 because of the time lapse since our
original consultation and the extent of changes in the NHS landscape.
46
The attached table “FT consultation 2012 - response to proposals” demonstrates that
respondents were largely supportive of our proposals in relation to changes to
constituencies.
Two issues were raised during the refresh of the consultation:

Charity Group representation

Patient Group representation
Following discussion by the Board it was agreed that …………… (to be updated post
Board meeting).
To include :
Membership analysis
Stakeholder analysis
47
Chapter 4: Market Assessment
4.1
Background to our market: musculoskeletal disease and the NHS
There are a number of major influences in the national environment in which we fulfil our
role as a leading national specialist orthopaedic hospital. The Trust has examined these
influences, together with the national and local policy drivers which have driven our
strategy and operational plans. The national policy drivers and local health economy
objectives are summarised in this section and described within the PEST analysis which
follows later in this chapter
The population of the United Kingdom is ageing and so demand for
musculoskeletal treatment has been growing and will continue to grow. There is
widespread evidence of this trend in recent years and that it will continue for decades to
come. Over the last 25 years the percentage of the population agreed 65 and over has
increased from 15% to 17% and is predicted to reach 23% by 20356. The ageing
process increases the risk of developing arthritis and musculoskeletal disorders. There
are many examples of increases in the demand and supply of orthopaedic services
across the NHS in recent years – for example the number of joint replacements
registered in the National Joint Registry (NJR) in England and Wales has risen by 280%
from 47,000 in 2004 to 179,000 in 2010.7 The trend towards higher proportions of
obesity across the population is also increasing the incidence of musculoskeletal
disease conditions requiring intervention. Musculoskeletal disorders are the leading
cause of disability and time off work for sickness worldwide.
6
Office for National Statistics: http://www.statistics.gov.uk
7
National Joint Registry: http://www.njrcentre.org.uk
48
There is widespread acceptance of evidence that high quality treatment for
musculoskeletal disease improves quality of life. The consequences of not
undertaking these services are pain, immobility and economic inactivity - a major
contributor to long-term illness and consequent inability to work. The treatment of
musculoskeletal surgical procedures, particularly joint replacement surgery, have
consistently successful outcomes for patients and significant positive impact on patients’
quality of life. There are many studies that demonstrate the potential benefits offered by
musculoskeletal surgical procedures, particularly joint replacement surgery. Indeed, the
consequences of not undertaking these procedures are pain, immobility and economic
inactivity. Musculoskeletal problems are a major contributor to long-term illness and
consequent inability to work. Musculoskeletal problems are consistently reported as
some of the main causes of morbidity in both primary care and by the general
population, across the different age bandings. This is a good example of a disease
group which is unlikely to be listed as a leading cause of death, yet places a significant
burden on individuals and on the health service8.

The Health and Social Care Act of 20129 shows that Government Policy for
the NHS is complementary to our strategic aims:-

The focus on quality of services and an evidence base for this quality. This is
consistent with our strategic aims of providing an appropriate range and scale
high quality orthopaedic services and supporting this with an expanded
evidence base that our services are high quality.

The focus on integration of clinical services is complementary to our strategic
aim of building the external focus, profile and partnership working at the
RNOH and the academic profile of our services.

The focus on information and choice is complementary to our strategic aim of
expanding the evidence base that we provide high quality services and our
outcomes strategy to share this information widely.

The focus on devolving power to front line clinicians and to enhance local
democratic involvement is complementary to our strategic aim to support the
delivery of our vision by becoming a Foundation Trust as Foundation Trusts
have a greater focus on involvement of membership and governor
stakeholders. It is also complementary to our clinical engagement plan and
clinically led business planning process.
8
The Burden of Disease and Illness in the UK: A preliminary assessment to inform the development of UK Health Research and Development Priorities, By
Dr Stephen Green and Dr Rebecca Miles, Oxford Healthcare Associates, Version 2 April 2007
9
Health and Social Services Act 2012
49
4.2 Analysis of Our Environment – Political, Economic, Social, Technological and
Legal
Political
Factor
Issue
RNOH Impact
Planned
Mitigations/Actions/Leads
and Timescales in IBP
Health and Social
Care Act 2012 –
Changing
Commissioning
environment
Establishment of
Clinical
Commissioning
Groups,
Commissioner
Support Services
and shift of
Specialist
Commissioning to
National
Commissioning
Board
20% of RNOH services
commissioned by specialist
commissioners in 2012/13
 c80% of RNOH services
commissioned by specialist
commissioners in 2013/14
2012: Representation of
RNOH on relevant Clinical
Reference Groups advising
specialist commissioners now in place
Health and Social
Care Act 2012 –
Removal of Private
Patient Income Cap
Potential to expand
proportion of private
patient income.
Risks:Changing commissioner
environment leading to lack
of clarity on income sources
and quantum and delay to
service development
partnership working with
commissioners
This is a key driver for our
private patient service
development described in
Chapter 5
Risks: RNOH does not
capitalise on its profile in
orthopaedics to maximise
the contribution from private
patient income sources.
2013: Continue active
support for Specialist
Orthopaedic and Spinal
Surgery CRGs
Lead: Chief Executive
2011: Private Patient
Market analysis completed
2012: RNOH approved new
Private Patient Unit Outline
Business Case
2013-2018: Procurement
and implementation of new
private hospital on RNOH
Stanmore site
Lead: Finance Director
Health and Social
Care Act 2012 –
Setting the
Payment by Results
tariff
Responsibilities for
Payment by Results
funding tariffs
shifting from
Department of
Health to Monitor
Fluctuations in Payment by
Results tariffs and/or
structure can lead to
significant income volatility
that has historically been
mitigated through close
partnership working
50
2012: Continue RNOH
input into PbR Orthopaedic
Expert Working Group (led
by Chief Executive)
2012: Continue RNOH
Factor
Issue
RNOH Impact
Planned
Mitigations/Actions/Leads
and Timescales in IBP
between the RNOH, the
Specialist Orthopaedic
Alliance and the
Department of Health
input and leadership of
Specialist Orthopaedic
Alliance
2013-2018: Continue in
partnership with DH PbR
team and SOA to maintain
partnership position with
new Monitor tariff
arrangements
Lead: Chief Executive
Health and Social
Care Act 2012 –
General Themes
supporting RNOH
Strategic Aims
Quality of services
Information &
Choice - Quality of
outcomes evidence
base
These are consistent with
the RNOH strategic aims
that provide the golden
thread throughout this IBP
Monitoring of progress
against strategic aims is
monitored by the RNOH
Trust Board
RNOH Impact
Planned
Mitigations/Actions/Leads
and Timescales in IBP
Integration
Devolving power to
the front line and
local democracy
Economic
Factor
Issue
51
Financial
Constraints – NHS
funding environment
Increased financial
pressure on
commissioners
Reinforces the need to
deliver the Transformation
Programme and
Redevelopment
Increased use of
Programme to ensure that
demand
financial volatility risks are
management
being managed – in
schemes/thresholds
particular in respect of the
clinical and financial
sustainability of addressing
Continued
downward pressure the redevelopment.
on tariff
The Outcomes Strategy is
also needed to reinforce the
evidence base for the
added value of
musculoskeletal treatment
2013-2018: Financial
volatility and impact on
redevelopment strategy and
sustainability of clinical
services remains the
number 1 risk that the
RNOH is managing as
referred to throughout this
IBP.
Long Term Financial Plans
and annual business plans
incorporate latest planning
assumptions and downside
scenario modelling and
mitigation
Social
Factor
Issue
Changing
Ageing population
demographics/health
Increasingly active
needs
elderly
Increasing obesity
levels
Increased
demand for
orthopaedics
RNOH Impact
Planned
Mitigations/Actions/Leads
and Timescales in IBP
Underlying demand has
been rising by 6% per
annum. Demand
management initiatives
have mitigated this to a
reduced referral volume
growth to 2.5% in 2012 but
the case mix complexity
and rate of conversion to
surgery means that the
value of each referral has
grown significantly and
overall income levels
continue to rise at 5% per
annum.
2012: Increase in external
focus and working in
partnership with
commissioners and other
providers with examples of
demand management
partnerships, improving
patient pathways to the
appropriate treatment as
part of the RNOH
Transformation programme
and insourcing and
outsourcing of clinical
services
2013 – 2018: Continued
implementation of
partnership working with
primary and secondary
care, demand management
52
Factor
Issue
RNOH Impact
Planned
Mitigations/Actions/Leads
and Timescales in IBP
initiatives, Transformation
Programme and
insourcing/outsourcing
models
Increasing
expectations of
public, patients and
carers.
Increased
patient/carer
involvement in how
services are
delivered
2013-2016 : Increased
profile of poor RNOH
infrastructure and impact on
patient experience prior to
Redevelopment plans being
implemented
Continued involvement of
Patient Group including
regular visits to Trust
services and involvement
through Council of
Governors Patient groups.
Quality indicators including
safety, effectiveness and
patient experience feedback
(including PROMs) action
plans monitored by the
Clinical Quality Committee
and the Trust Board
Geographical
Location
Geographical
The RNOH is located in a
location may hinder High cost area that does
recruitment
not attract inner London
high cost area allowances.
The RNOH’s reputation is
key to attracting staff.
Local labour force is in
plentiful supply
2013-2018 Organisational
Development Programme
targeted at key recruitment
and retention issues.
The IBP assumes a staffing
reduction over the period of
the IBP.
Geography also enables us
to draw on a wider
catchment area
Lead: Director of
Workforce, IM&T and
Corporate Affairs
Technological
Factor
Issue
RNOH Impact
Planned
Mitigations/Actions/Leads
and Timescales in IBP
Increased access to
information for
Patients more
informed of
The RNOH is in a strong
position with very high
2013-2018: Focus on
underpinning programmes
53
parents and carers
Clinical innovation,
new drugs and
genetics based
treatments
treatment options
and outcomes
Clinical Innovation
will generally
support improved
patient outcomes
with potential for
reduced
intervention rates,
reduced length of
stay, reduced
theatre time
requirements
Equipment
developments and
innovation can lead
to increased costs
and the
introduction of new
treatments e.g.
changing treatment
regimes for
Rheumatoid
Arthritis /
Osteoporosis
Impact of new IM&T
quality outcomes – the risk
will be significant if this is
not maintained
The RNOH remains at the
forefront of musculoskeletal
innovation and new ways of
working – in partnership
with UCL Partners and our
strategic aim of building the
strength of our academic
programme.
that will deliver strategic
aims
2013-2018: Quality
Innovation Productivity and
Prevention initiatives and
CQUINN are all included in
our Transformation
Programme
Monitoring of policy for
implementing new
technology and use of
innovative procedures
through governance
processes within the RNOH
Continued working with
Orthopaedic PbR Expert
Working Group on ensuring
innovation can be
appropriately reflected in
tariff changes – e.g. best
practice tariffs.
Allows the Trust to develop
new ways of working.
2012-2017:
IM&T Strategy
Implementation Plan
including electronic
requesting and reporting of
diagnostic tests, digital
dictation, electronic patient
record – aligned to our
Transformation programme
and opportunities within our
new hospital redevelopment
Legal
Factor
Issue
RNOH Impact
Planned
Mitigations/Actions/Leads
and Timescales in IBP
Increasing trend in
Litigation in the
NHS is on the
The RNOH has low
litigation rates with the level
2013-2018: Maintain focus
on high quality outcomes to
54
NHS litigation
increase and has
been rising year on
year since the NHS
Authority Litigation
scheme began.
of CNST insurance
premium far exceeding any
pay outs made – this is
evidence of our high quality
outcomes for complex
patients
minimise impact of
increased incidence of
litigation.
4.3 Markets
Key Facts
The RNOH is the largest specialist provider of orthopaedic and related care in the UK
and demonstrates high quality care for our patients. Our turnover is over £115m and we
employ over 1300 staff. Our main site is located in Stanmore, Middlesex on the outskirts
of London on a large 120 acre site with 217 beds and 10 operating theatres. We also
have a central London outpatient facility where a third of our 100,000 outpatient
attendances per year. The RNOH can demonstrate the highest quality of care is
provided to patients. Since 2008 we have had no cases of hospital acquired MRSA
bacteraemia. Our surgical infection rates are amongst the lowest in the country. We get
more things right first time than others with low revision rates and low readmission rates.
Over 90% of our patients would recommend treatment at our hospital to friends and
family. In some services this is over 95%. We were registered with CQC in April 2010
with no conditions and have been classified by Department of Health as a “performing”
Trust for the last three years.
Patient & Commissioner profile
We have a truly national referral base with 95% of our patients travelling from outside of
our local Clinical Commissioning Group area. 45% of our patients live in London with a
further 20% from the “pan-Thames” South east of England. Private work is 6% of our
total activity and international work is 10% of this.
Our Commissioner profile is scheduled to change radically in April 2013 as the
significant proportion of our services that are defined as specialist will no longer be
commissioned by local Clinical Commissioning Groups but come under the
responsibility of National Commissioning Board Local Area Team Specialist
Commissioners.
[Convert tables to map/ pie chart]
Commissioner profile 2012/13
% Trust
NHS
Activity
London CCGs
43%
55
East of England CCGs
20%
Other CCGs across the UK
24%
Specialist Commissioning Groups (Spinal Injuries)
7%
National Commissioning Group (Bone Tumour)
6%
Commissioner profile 2013/14
% Trust
NHS
Activity
NCB Local Area Team: Specialist Commissioner :
Specialist Orthopaedics
34%
NCB Local Area Team Specialist Commissioner:
Specialist Spinal Services
25%
NCB Specialist Commissioner Local Area Team:
Spinal Cord Injuries
7%
NCB Specialist Commissioner Local Area Team:
Prosthetic rehabilitation
3%
National Commissioning Group: Bone Tumour
6%
Clinical Commissioning Groups
20%
Demographic Changes – What is driving our market?
According to current Department of Health definitions, musculoskeletal conditions
include 200 different problems, affecting the muscles, joints and skeleton; over 9.6
million adults, and around 12,000 children, have a musculoskeletal condition in England
today (Musculoskeletal Services Framework, 2006). Not surprisingly, therefore,
musculoskeletal conditions are a major area of NHS expenditure which accounted for
£10 billion in 2010/11.
By 2030, 16½ million of the population will be over the age of 65; 30% of 70 year olds
have arthritis. It is anticipated that there will be a significant expansion in demand
nationally as patients have orthopaedic interventions such as hip replacements at a
younger age and, by living longer, require revision. It is predicted, therefore, that there
will be a rise to over 150,000 joint replacements during this period.
An ageing population and better life expectancy for those with complex physical needs
create new challenges for healthcare delivery and demands upon specialist
musculoskeletal services.
Although medical advances mean that, to some extent, cases previously considered
“specialist” can be done in a local setting, medical training changes and the reduced
experience of newly qualified consultants mean that work previously taking place in local
hospitals is increasingly being referred onto specialist centres. This is evidenced by our
56
growing referral rates which have increased by an average of 5% per annum for the last
five years. Rather than low volumes of specialist cases at a local level, patient safety
and outcomes are enhanced through providing a critical mass in specialist service
centres.
57
What are our markets?
We operate in four key markets:
Market
Description
RNOH
Activity
RNOH
£
Market
Assessment
NHS
Routine
Driven by patient choice,
reputation and local
population needs – also
supports education,
training & research
activities at RNOH
2,000
spells
£15m
There is approximately £50m of
routine elective orthopaedics
currently taking place in hospitals
within 20 miles of the RNOH
NHS
“Specialist”
or
“Complex”
Driven by reputation,
clinical links to
secondary care
providers nationally
8,000
spells
£85m
We are carrying out a market
assessment of the impact of the
specialist clinical reference group
recommendations to focus specialist
activity in specialist centres or
networked with a specialist centre
Private (UK
and
internationa
l)
Driven by reputation and
private market demand
1,000
spells
£7m
There is over £100m of private
orthopaedic hospital income being
earned in 11 private hospitals in the
surrounding area. 40% of this is
being carried out by RNOH
consultants. Our market assessment
of the private orthopaedic market
has driven us to establish one of our
key service developments which we
want to implement as a Foundation
Trust to support delivery of our
vision.
Academic
Market –
Research
and
Teaching
Driven by academic
reputation and links to
academic partners – e.g.
UCL IOMS and UCL
Partners
N/A
£2m
Our growing status with UCL
Partners as the academic lead for
musculoskeletal disease is opening
up more and more opportunities for
leading on or participating in trials
across a population of 1 billion within
the UCL P catchment
Responding to the commissioning environment and competition
We have strong commissioner support for our role within the NHS as evidenced by our
agreed joint commissioner statement on the RNOH and activity planning and demand
management – this establishes our “strategic fit” in the local health economy and
beyond. Commissioners wish to see the RNOH position as a major specialist provider
maintained in the longer term for the benefit of patients within London and beyond.
58
Commissioners are committed to continued working with the Trust to further strengthen
the Trust’s position while supporting choice and contestability.
We recognise the challenges of the financial outlook ahead for the NHS but
fundamentally believe that this supports rather than undermines our role as providing a
critical mass of the most efficient and effective complex specialist tertiary orthopaedic
activity in the country. It would be more expensive and less effective to carry out this
activity in other organisational configurations. This has been demonstrated time and
time again in the 13 independent reviews of the RNOH over the last 30 years.
There is evidence that our core specialist work can only be provided in specialist centres
like ours. For example:
Attempts that commissioners and ourselves have made to seek
additional capacity from other providers to help meet our escalating
demand has indicated that the majority of our activity could not be
dealt with at non-specialist centres either in NHS or independent
sector due to case mix complexity.

We have a growing evidence base built up over a number of years
of regular approaches from health economies across the UK
seeking our support to provide specialist capacity which is not
sustainable locally to them.
We have analysed our services against those provided in other centres in the UK and
Internationally through our membership of the International Society of Orthopaedic
Centres. The table below illustrates where we currently sit in the UK in terms of the
range of services provided in each centre.
Designated Spinal
Cord Injury Centre
NCG Bone Tumour
Centre
NCG Peripheral Nerve
Injury
Joint Reconstruction –
routine
Joint Reconstruction –
tertiary
Spinal Surgery –
tertiary
Spinal Surgery –
complex spinal
deformity
RNOH
London
NOC
ROH
RJAH
Wrightington
Oxford Birmingham Shropshire Manchester





Local Trusts
Elective
Orthopaedic
*





































* Barnet Chase Farm, Royal Free, UCLH, Whittington, North West London Hospitals
59
We have completed a comprehensive analysis of the independent sector provision of
orthopaedics and have a track record of working in partnership with the independent
sector for example through outsourcing additional capacity. This continues to inform our
approach to delivering our strategic aims. We already work in partnership with the
independent sector with a number of outsourcing arrangements for example with Spire
Bushey and the BMI Clementine Churchill hospital. We have also worked jointly with the
independent sector in running our own private patient unit.
In 2011 we conducted a comprehensive market assessment of the independent sector
orthopaedic market across the local area, nationally and internationally.
[Add maps, tables & references from Deloitte Private Patient Market Assessment
September 2011]
The headline outcomes of the independent review were:
That RNOH consultants collectively undertake £37m - £46m of private work
(hospital income) at other private hospitals, with the three largest private
hospitals taking between £31m - £37m of this. This contrasts to the £4.4m of
private patient income earned by the RNOH in 2010/11.

That a significant amount of support existed to repatriate private work back to
the Trust in the event of improvements to both private patient facilities and the
patient/consultant experience.

A conservative annual growth rate of 5% in private medical demand could be
achieved. In the interim years (2012/13 - 2016/17) within the existing PP
facilities, this growth rate has been assumed. It is believed to be achievable
even without significant capital/revenue investment after consideration of the
following:

The Deloitte report highlights that on a conservative basis there will be an
underlying growth of 5% p.a. for private patient activity (refer Appendix 1 p.34).

The reduction in PP income 2006/07 – 2010/11 is likely to be due to factors
unrelated to the PP facilities. An insight into this can be gained by reference to
the reasons given by consultants for not increasing their PP work at Stanmore
as highlighted in the Deloitte report (Appendix 1 - p. 27) – issues raised
include: no dedicated PP staff, no dedicated X-ray facilities, lack of a private
patient/commercial ‘mindset’, secretarial and admin support, no professional
marketing services, and usage of private patient capacity to meet NHS waiting
time targets. These issues are in the process of being addressed,
encouraging consultants to repatriate PP activity to the RNOH, without a
significant capital or revenue contribution.
60

Based on experience elsewhere, as a prudent case the RNOH has the
potential to increase private patient income to £24m, by capturing 50% of the
activity undertaken by RNOH consultants at local competitors.

Timeline assessments indicate that allowing for an eighteen month
procurement process and a two year construction period, operations could
commence at the start of 2015/16. Careful consideration of legal form around
the joint venture/joint working agreement would be necessary pending
potential achievement of Foundation Trust status by the Trust.

If a best case 75% activity repatriation of RNOH consultant activity was
achieved through the joint venture, this would average additional contribution
of £5.6m per annum, whilst a down side assessment of 25% repatriation
would result in an additional contribution of £0.5m per annum. In view of the
risks around commencement date and execution of the strategy, the
expansion of private patient income has been kept as a mitigating action only.
The Trust will develop the case for this alongside as a key service
development alongside our Foundation Trust application.
4.4 Market Share and Segmentation
Each unit within the RNOH has a different profile within these markets, as indicated in
the table below:
Service Line
Scale
Description
(approx.
annual
income)
Sarcoma
£7m
[Bone and Soft
tissue sarcoma
clinical income
Part of the
London Sarcoma
Unit and one of 5
centres
designated by
National
Commissioning
Group
Nature of
Service
Commissioning
National
Capacity and
RNOH Market
Share
Demographics
and future
demand
Secondary and
Tertiary Care
Bone - A National
Commissioning
Group Service (i.e.
recognised as
rare)
Bone
Diagnosis
numbers
perceived to be
relatively stable.
Soft Tissue –
Moving from PCT
to Specialised
Commissioner
Service 2013
5 designated
centres in UK
Regional with
some National –
55% London;
38% South East;
7% Other
Specialist
National profile
of education and
research with
national data
collection
61
c. 400 diagnosed
per annum
nationally
c125 inpatient
discharges per
year at RNOH
(UK Market
Share c20%+)
Patients will be
targeted at
designated
centres
Service Line
Scale
Description
(approx.
annual
income)
Nature of
Service
Commissioning
National
Capacity and
RNOH Market
Share
Demographics
and future
demand
Soft Tissue
Works in
partnership with
UCLH who
provide oncology
and other
support]
c. 2000
diagnosed per
annum in UK
c250 RNOH
inpatient
discharges per
year (UK Market
Share c10%+)
Some surgery
still taking place
at UCLH
Joint
Reconstruction
£22m
National service
– 39% London,
10% South East,
Other 21%
[Knee
arthroscopy,
primary and
revision
replacements,
cartilage
transplantation.
Hip replacement
and revision
surgery, hip
reconstruction
including
resurfacing,
osteotomy.
Service includes
both adults and
children.]
Foot and Ankle
[Foot and Ankle
Secondary and
tertiary care
Some specialist
work with more
routine work
being
undertaken on
behalf of local
PCTs
This is
expanding with
the impact of
Choice.
Off-site private
capacity utilised
for routine work
since 2007/08
£2m
Secondary and
tertiary care
Regional with
some national –
Currently
commissioned by
general PCT
contracts so not
specialised service
in commissioning
terms – however
some procedures
identified as
specialist within
the national
specialist service
definitions set for
orthopaedics and
this has been
expanded in more
details in the
current
consultation on
specialist services
definitions (e.g.
Infected revisions).
80% of
“complex” work
carried out at five
specialist
orthopaedic
alliance core
members (based
on sample
studies)
Potential
demand growth
anticipated,
particularly from
GPs within the
local catchment
area – impact of
patient choice
and population
demographics.
50% routine
outpatient
consultations
planned to move
to local settings
(Healthcare for
London
assumption
agreed with
Commissioners)
Currently
commissioned by
PCTs so not a
specialised service
TBC
Low growth
anticipated
62
Service Line
Scale
Nature of
Service
Commissioning
Description
(approx.
annual
income)
41% London,
35% South East,
24% other
in commissioning
terms – included in
the national
specialised
definitions set
£1m or 1%
of RNOH
clinical
income
generated
by patients
directly
managed
but the
service
supports
patients
under the
managemen
t of other
consultants
Secondary and
tertiary care
£4m
Secondary and
tertiary care.
joint
reconstruction
surgery
Increasing
proportion of day
cases and
developing one
stop clinics to
multi-disciplinary
team]
Medicine and
Rehabilitation
[Metabolics and
osteoporosis,
rheumatology,
sports medicine]
Paediatric
Surgery
Regional service
with some
national –
London 62%,
South east 31%
other 7%
Specialist
Specialist
[Paediatric
orthopaedic care
including the
management of
cerebral palsy,
limb lengthening
including Ilizarov
frames into
adolescence and
adulthood. Pain
management
Regional with
some national –
London 42%,
South East 48%,
other 10%
National
Capacity and
RNOH Market
Share
Demographics
and future
demand
Currently
commissioned by
PCTs so not
specialised service
in commissioning
terms – however
some procedures
identified as
specialist within
the national
specialist service
definitions set for
orthopaedics.
Very difficult to
assess given
nature of service
Potential growth
area developing and
expanding
outreach
services for pain,
physiotherapy
and the
integrated back
service
Currently
commissioned by
PCTs so not
specialised service
in commissioning
terms – however
some procedures
identified as
specialist within
the national
specialist service
definitions set for
orthopaedics e.g.
Ilizarov.
Varies by
consultant –
each has subspecialist
interests
Low growth
anticipated
63
Ilizarov new
procedure – 2/3
other centres –
60 per year out
of total c1000
discharges (6%
of Ilizarov activity
generates 23%
of income for the
Service Line
Scale
Description
(approx.
annual
income)
Nature of
Service
Commissioning
which is also
supported by
paediatricians
and psychiatrists.
National
Capacity and
RNOH Market
Share
Demographics
and future
demand
total service line)
2 designated
wards for
treatment of
children and
adolescents
support this
service as well
as children under
consultants from
other services.]
Pain
Management
[Integrated back
pain service,
pain
management,
physiotherapy
and
Occupational
therapy]
Peripheral
Nerve injury
[includes adult
and paediatric
brachial plexus
injury]
£1m or 1%
of RNOH
clinical
income
generated
by patients
directly
managed
but the
service
supports
patients
under the
managemen
t of other
consultants
Currently
Secondary and
tertiary care –
potential to
develop
primary/commun
ity pain service
£2m
Secondary and
tertiary care
Regional service
with some
national –
London 51%,
South east 41%
other 8%
Specialist
National service
– 39% London,
35% South East,
26% other
Specialist
Education and
research linked
to spinal
research centre
Currently
commissioned by
PCTs so not
specialised service
in commissioning
terms – however
some procedures
identified as
specialist within
the national
specialist service
definitions set for
orthopaedics and
specialised pain
management
services
Other tertiary
pain
management
centres exist
across London
and local
community pain
management
services are also
being developed
Potential growth
area
Currently
commissioned by
PCTs so not
specialised service
in commissioning
terms – however
identified as
specialist within
the national
specialist service
definitions set for
orthopaedics and
The RNOH is the
leading tertiary
centre in the UK
for peripheral
nerve injury,
carrying out 82%
of Brachial
Plexus Injury
repair and 65%
of Brachial
plexus disorders
6% of total UK
Low growth
anticipated
64
Service Line
Scale
Description
(approx.
annual
income)
Spinal Cord
Injury
£6m
Specialist.
Commissioning
National
Capacity and
RNOH Market
Share
neurosciences
cases on
shoulder or
upper arm nerve
site codes
carried out at
RNOH
Specialist
Commissioning
Groups linked to
SHA areas
(=>Independent
Commissioning
Office Sectors?)
eight
centres:
Salisbury,
RNOH; Sheffield,
Stoke
Mandeville,
Oswestry;
Middlesbrough,
Southport,
Pinderfields
RNOH
designated
“London” Spinal
Cord Injury
Centre with links
to trauma
centres
£22m
Predominantly
Tertiary Care
Regional with
some National –
48% London;
39% South East,
13% Other
[Spinal deformity,
Scoliosis, Spinal
Trauma,
neurosurgical
intradural
pathology,
integrated lower
back pain
service]
Upper Limb
Tertiary Care
Regional - 57%
London; 40%
South East; 3%
Other
(One of eight
designated
spinal cord injury
centres in
England (11 in
UK) – includes
non –elective
acute transfers
from Trauma
Units and
rehabilitation)
Spinal Surgery
Nature of
Service
Specialist
£3m
Secondary and
tertiary care
Currently
commissioned by
PCTs so NOT a
specialised service
in commissioning
terms – national
specialist service
definitions set
under discussion –
Scoliosis a key
issue – London
wide
commissioning
Network proposal
under review
RNOH
represents 3% of
all spinal surgery
excluding
epidural
procedures
Currently
commissioned by
Higher market
share as
65
Demographics
and future
demand
.
There is more
demand than
capacity
currently
available
nationally
(patients
awaiting
transfers from
other hospitals)
Patients are
transferred to
designated
centres based
on most
appropriate bed
available
Low growth
anticipated
RNOH
represents 29%
of all Scoliosis
surgery (over
twice as much as
next largest
provider)
Low growth
anticipated
Service Line
Scale
Description
(approx.
annual
income)
Nature of
Service
Regional with
some national –
41% London,
35% South East,
24% other
Commissioning
National
Capacity and
RNOH Market
Share
PCTs so not a
specialised service
in commissioning
terms – included in
the national
specialised
definitions set
complexity rises.
Demographics
and future
demand
6% of primary
total shoulder
replacements
(TSR)
18% of revisional
TSRs
27% of
“attentions to”
TSR
52% of removals
of TSR without
immediate
revision
4.5 Benchmarking Our Performance
Over recent years, we have established a track record of delivery of improvement
against all quality and access targets, a remarkable performance given the complexity of
our casemix. For example we have the longest track record in London for the number of
consecutive days without MRSA being acquired. We also have low re-admission rates,
as evidenced by commissioner tracking of re-admission levels post discharge, and our
revision rates recorded in the National Joint Registry are significantly better than the
national average across all consultants.
2010/11
2011/12
2012/13
Qtr 1 & 2
Overall Quality of Services
Score
Performing
Performing
Performing
Quality Standards &
Integrated Performance
Measures
Score
2.88
2.5
N/A
Rating
Performing
Performing
Performing
Quality – User Experience
Score
5
5
N/A
Rating
Performing
Performing
Performing
Performing
Performing
Performing
Quality- CQC Registration
66
We have delivered Referral to Treatment access targets in a specialty which has
struggled to deliver this across the rest of the country.
[Insert table showing RNOH 18 week delivery in orthopaedics and comparison to national
picture]
We regularly benchmark our performance against our peers in the Specialist
Orthopaedic Alliance – we consider these to be the most meaningful comparator given
the specialist nature of our services. There is significant evidence that our case mix is
more complex than our peers in the Specialist Orthopaedic Alliance – for example the
level of tertiary or equivalent referrals at RNOH is 80% whilst at the other centres it is
less than 50%. We collect benchmarking data on a range of indicators across the
patient pathway, and have provided examples of information relating to 2011/12 below.
MRSA incidents per 100,000 beddays
6
5
4
3
2
1
0
RNOH
ROH
RJAH
NOC
Series1
WWL
NBT
SOA Average
67
SWLEOC
NUTH
Belfast Cappagh
NHS Average
The
Horder
Centre
68
Surgical Site Infections
2.00%
1.80%
1.60%
1.40%
1.20%
Series1
1.00%
SOA Average
0.80%
NHS Average
0.60%
0.40%
0.20%
ag
Ho
h
rd
er
Ce
nt
re
TH
fa
st
Th
e
Ca
pp
Be
l
C
NU
LE
O
NB
T
SW
W
L
W
C
NO
RJ
AH
H
RO
RN
O
H
0.00%
69
Chapter 5: Service Development Plans
Services and plans for service development
The service development plans support the continued delivery of high quality standards
and the longer term sustainability of the organisation. The Trust operates a ‘bottom-up’
planning approach, integrating the requirements and needs of clinical units and
supporting functions to ensure that plans are congruent and robust across the
organisation.
The service development plans are intended to enhance existing core strengths and
improve the efficiency and optimisation of the patient pathway. The Trust will seek as a
matter of course to deliver on local and national NHS priorities.
The range of clinical services provided
The Trust undertakes a full range of musculoskeletal surgical, medical, and rehabilitation
services, provided through two main strands of surgery and rehabilitation and medicine.
The incidence of musculoskeletal conditions is common; according to current
Department of Health definitions there are over 200 different problems affecting the
muscles, joints and skeleton. It is estimated that over 9.6 million adults and 12,000
children have a musculoskeletal problem in England.
Elective orthopaedic surgery:

This is the largest component of the Trusts’ business, with over 15,600 inpatient
operations for both adults and children being undertaken in 2011/12.

The Trust is one of only five designated Bone and Soft Tissue sarcoma centres
within the country as designated by the National Commissioning Group.

The Peripheral Nerve Injury service within the RNOH is the largest tertiary centre
of its type in the United Kingdom.

The spinal surgery service within the Trust performs 29% of all scoliosis surgery
undertaken in England – the largest single provider by some margin.

The Trusts joint reconstruction service is the Xth largest in England in performing
{insert number} hip and knee replacements each year. The service has a mix of
routine and joint revision surgery, with an interest in the more complex areas,
such as the treatment of infected revisions.
Medicine and Rehabilitation:

The RNOH Spinal Cord Injuries Centre is the designated centre for the London
area, with links to the major London trauma centres.
70

The Trusts rehabilitation service specialises in supporting the treatment of longstanding conditions, as part of a pain management service. This includes courses
such as the active back programme, which are designed to enable patients to live
with chronic conditions. The Trust also has a strong interest in sports medicine,
with a dedicated clinic for the assessment and treatment of injuries to
professional dancers.

The Trust provides a specialist service for the diagnosis and treatment of
metabolic bone disease.
Operational delivery of services
Services provided by the Trust are clinically led, with a strong clinical leadership in situ
at each service line. The two clinical divisions of the Trust are led by a Divisional
Manager, guided by the service leads. Corporate support is provided by designated
leads from the Finance and Human Relations departments.
Trust SWOT analysis
The Trust has undertaken a detailed SWOT analysis in developing the Integrated
Business Plan including the inclusion of associated plans and timescales for building on
the strengths and mitigating any weaknesses of the Trust. This will also enable the Trust
to capitalise on opportunities and manage threats. The analysis shows an overall
position of strength in terms of providing excellent quality services which are increasing
in demand due to an ageing population.
The Trust has also recognised key weaknesses and threats, paying particular regard to
the national and local financial pressures of commissioning bodies. The Trust has
therefore prepared financial plans going forwards on a conservative 2.5% income
growth assumption, despite the 10 year average being 5% in activity terms, with a much
greater increase found around the more complex activity areas such as joint revisions
and scoliosis. This is anticipated to grow considerably over the coming period as the
population ages. The results of the SWOT appraisal are shown below and overleaf:
Strengths
How will we build on these
strengths?
1.We have a reputation for excellent We will continue to maintain an
clinical services – “a jewel in the evidence base for high quality
crown” in the NHS with examples of outcomes monitored in our “board to
“world class services”.
ward” Key Performance Indicators
This is evidenced by:
and published in our Annual Quality
Accounts.
 13 independent reviews in 30
years concluding in support for We will expand our national
benchmarking
to
international
the services provided
benchmarking
to
demonstrate
world
 Consistent referral growth
71
(averaging 5% per annum for
10 consecutive years) and
demographic and medical
training changes driving likely
continuation of sustained
demand
Patient outcomes – zero
MRSA, low surgical site
infections, C-Difficile, low
readmissions
Top quartile patient satisfaction
ratings
Top 100 NHS Employer –
HSJ/Nursing Times
HSJ/Nursing Times award for
Enhanced Recovery
Programme/Medihome
initiative
class services. This will be evidenced
by the output of the work we are
doing with the Specialist Orthopaedic
Alliance and International Society of
Orthopaedic Centres.
3.We serve all ages – “cradle to
grave” – we provide one of the largest
critical mass volume of paediatric
orthopaedic procedures in the UK and
patients with lifelong conditions are
served throughout their life by the
RNOH’s services
We will continue the delivery of the
National Clinical Advisory Team
October
2009
review
recommendations
on
Children’s
Services at RNOH. This will be
monitored by the Director of
Children’s Services on behalf of the
Trust Board and includes the opening
of our children’s high dependency unit
in 2021/13 and our established plans
to enhance children’s outpatient
facilities in Stanmore.
4.We have a track record of academic
partnership and clinical innovation –
unique mix of clinicians, academics,
engineers and industry. For example,
we have developed new techniques
such as the internal proximal femur
and the non-invasive grower which
received two national awards. We
have pioneered the use of autologous
chondrocyte transplantation in the
We have appointed a new Clinical
Professor of Orthopaedics and he is
working on refreshing Joint Academic
Plan agreed with UCL by December
2012. This is monitored on behalf of
the Trust Board by the Joint
Academic Committee. We continue to
work in partnership with UCL Partners
AHSC.




We will enhance our reputation for
clinical
excellence
through
partnership working with other NHS
and
Independent
sector
organisations. This is evidenced so
far by establishing “insourcing
models” to transfer work from all
around the UK to support health
systems
experiencing
capacity
constraints. We are working on
partnerships with other organisations
that will involve RNOH working at
other sites and are targeting
agreement of the model with the host
organisation
in
2013
and
implementation in 2014.
72
U.K.
Progress will be evidenced by growth
in recruitment to patients for NIHR
sponsored trials, successful grant
applications, increased academic
appointments and strengthening our
publications record.
5.High market share in superspecialist activities – e.g. spinal
surgery, bone tumour, peripheral
nerve injury.
Our Medical workforce plan includes
our plans to recruit, retain and
succession plan for expert specialist
clinicians.
We
will
enhance
partnership working with other
hospitals through increased joint
appointments, expanding “insourcing”
initiatives and setting up RNOH
services at other hospitals.
Weaknesses
How will we manage these
weaknesses?
1.The fabric and estate of the We will deliver our Redevelopment
Stanmore site hub is not fit for Programme
supported
by
the
purpose
associated assurance process.
2.Demand growth, exacerbated by
our strategy to attract increased
referrals and supporting work from
elsewhere,
and
challenges
to
expanding
capacity/infrastructure
result in sustained pressure on
access targets.
We will implement our embedded and
agreed demand and capacity plans at
consultant level established as part of
the delivery of sustainable access
times. We now have a track record of
national top quartile orthopaedic
access in spite of year on year
demand growth.
We have not always been able to
provide Trauma units with appropriate
timely access for spinal trauma to
spinal injuries unit due to our capacity
constraints. This put at risk our
credibility to provide a comprehensive
service as the “London Spinal Cord
Injury Centre” particularly with
significant patient population from
outside London utilising capacity.
This
will
be
mitigated
by
implementation in expansion in HDU
capacity, Spinal Cord Injury outreach
provided to the Trauma centres and
on-going initiatives to clarify and
agree the Spinal Cord Injury
catchment area with commissioners –
a key decision being whether to limit
referrals to a London Catchment area
to ensure a comprehensive service to
the London Trauma centres can be
maintained at all times.
73
3.Historically inward-looking with a
focus on specialist cases rather than
leading
on
cascading
clinical
excellence
for
high
burden
orthopaedic conditions to local NHS
services.
We will develop links across UCL
Partners by agreeing an expanded
academic partnership that builds on
our current Joint Academic plan with
UCL.
We will implement joint appointments
and off-site working and franchising
models to support services on other
sites and work with a network of
hospitals to support training. The
training element is evidenced by our
work to link training posts with other
sites.
4.Sustainability
of
small,
subspecialist, “stand alone” service lines
with challenging succession planning
issues i.e. dependent on skills not
widely available or continually being
developed
Our medical workforce plan includes
our plans to recruit, retain and
succession plan for expert specialist
clinicians. We will also expand joint
appointments with other Trusts to
enhance
links
with
other
organisations to help sustainability.
Our outcomes monitoring strategy
and
work
with
specialist
commissioning
clinical
reference
groups will inform agreement of safe
and
sustainable
critical
mass
services. We will maintain and
monitor
agreement
with
other
providers for a range of clinical
support services that support standalone services. Service line reporting
information will inform the financial
sustainability of the development of
specialist service critical mass.
5.Reliance on partner organisations
for clinical support services not viable
to be provided “in-house” e.g. general
medical
and
surgical
cover,
pathology, mental health, general
medical paediatrics. These partner
organisations may not be focused on
RNOH priorities
We will maintain strong contract
management arrangements with the
NHS Trusts that provide our clinical
support services. We will build links
with alternative providers through
academic and service links such as
across UCL Partners or the Specialist
Orthopaedic Alliance to maintain an
understanding
of
alternative
74
providers. This is evidenced by
maintaining and monitoring all clinical
support
services
provided
by
organisations outside of the RNOH
monitored by Clinical Governance
and Risk Management Committees
on behalf of the Trust Board.
Opportunities
How will we exploit these
opportunities?
1.Population demographics indicate We will work with commissioners on
potentially growing demand for the managing
demand,
appropriate
services RNOH provides.
referrals
to
RNOH’s
specialist
services and offering increased
Patient Choice seeking high quality capacity if needed.
outcomes
rather
than
local
convenience.
2.Using our land assets and planning We will utilise the planning permission
permissions to enhance private sector on our site for significant clinical
partnerships.
facilities
expansion
to
private
providers to work alongside the NHS
facilities on our site. This will provide
a potential future revenue stream for
future service development.
3.New clinical and academic vision
strategies (links with AHSCs, industry
and aspiring Biomedical Research
Unit status).
We will continue to build our links with
AHSCs such as through our
developing partnership with UCL
Partners.
Threats
1.Economic drivers, the funding
environment
and
organisational
financial sustainability assessments
have historically focused on short
term cost of patient care intervention
rather than the overall value added
economic benefit of high quality
outcomes across patient lifetime
How will we manage these threats?
We will use our links and influence as
part of the Specialist Orthopaedic
Alliance to ensure the added value of
specialist orthopaedic providers is
understood by commissioners and
wider health economies.
We will utilise the direction of travel
indicated in the White Paper “Equity
and Excellence: liberating the NHS”
to recognise the value of high quality
outcomes across the whole patient
75
lifetime pathway.
2.Some of our clinical units are
heavily reliant on small numbers of
highly specialised staff. In some
cases, a clinical unit’s sustainability is
dependent
on
one
individual
consultant working at full capacity
Each clinical unit has developed
succession plans for their consultant
staff as part of the unit’s demand and
capacity plans. We will continue to
attract and develop junior medical
staff by providing a critical mass of
high quality routine work as part of
our academic strategy. We will also
expand joint appointments with other
Trusts.
3.The
service
transformation
programme may not deliver at a pace
sufficient to meet redevelopment
affordability requirements
We have established a clinically led
transformation
programme
and
associated risk management and
assurance framework in line with
“Managing Successful Programmes”
methodology to provide assurance on
delivery.
The
pace
of
the
redevelopment may need to be
adjusted according to progress on
delivery of transformation.
4.We will continue to experience
financial volatility driven by income
risks – case mix/volume variation,
tariff volatility (e.g. PbR changes,
NHS R&D funding, PP market
contraction)
We have established embedded
consultant level demand and capacity
plans linked to clinical unit plans,
directorate plans and the overall Trust
Long-term Financial Model. We have
a
track
record
of
improved
performance in an environment of
extreme tariff volatility for specialist
services.
The SWOT demonstrates that the Trust has many strengths and opportunities, and is in
a strong position to develop and achieve the strategic vision and aims. Several issues
have however been identified that are required to be addressed or closely monitored to
ensure the Trust’s future success.
Capitalising on strengths and addressing weaknesses
A considerable number of the strengths identified in the SWOT analysis relate to the
Trust’s strong clinical reputation and high-quality patient outcomes, as evidenced by low
surgical infection rates and high patient satisfaction. The range of specialist services
provided and pool of clinical expertise, supported by the comprehensive ‘cradle to grave’
76
care of complex musculoskeletal problems presents a significant competitive advantage
to the Trust at a time when patients will increasingly be choosing on the basis of
reputation.
In the future competitive market of patient choice the strengths of reputation, brand, and
high quality will be key determinants. To assist in building on these strengths the Trust is
investing in increasing the coverage and range of outcome monitoring to both further
demonstrate the qualitative output, but also assist in benchmarking performance against
both national and international peer groups. Alongside this, the Trust will be growing the
scale of private patient activity for which quality and brand will be essential precursors.
The Trust has a strong reputation for partnership working, with a particular emphasis on
working with other NHS providers to assist bodies experiencing capacity constraints.
This therefore presents an opportunity to the Trust in establishing potential hub and
spoke models of care, with branded outreach services. This would both increase the
critical mass of specialist expertise within the Trust improving resilience, but also provide
greater opportunity for joint appointments and expanded clinical links.
Several weaknesses and threats to the Trust’s future development were also identified
by the SWOT. These principally centre around the modernisation of the estate, together
with need to recalibrate payment currencies to more favour value added from high
quality outcomes. The Trust will continue to work with specialist commissioners and the
Specialist Orthopaedic Alliance to ensure specialist services are recognised and paid
accordingly.
The renewal of the estate will be delivered by the Redevelopment Programme, with
Phase One of the estate scheduled to be complete through a PFI procurement by
2015/16.
The Trust’s strategic objectives
The Trust’s strategic aims for the next five years relate directly to the SWOT analysis
and will enable the Trust to build on its strengths and limit identified weaknesses. These
aims are encapsulated within the following three programmes of service development
that link to overarching strategies developed through a robust business planning and
performance management process:i.
Redevelopment Programme: Our hospital facilities do not currently match our
vision. The Stanmore site will be renewed through our redevelopment
programme which is supported by full government approval (including
commissioners, Department of Health and Treasury) of an Outline Business
Case for an £88.6m scheme funded primarily through the private finance
initiative (PFI). This will provide new clinical facilities by 2016. The Trust
understands and fully recognises that the number one risk facing the RNOH is
the clinical and financial sustainability of our facilities but believe that the
77
organisation has a track record of managing this risk and an approved, clear,
achievable and affordable plan to develop our facilities in the future.
Over the next five years the following objectives will be achieved:
ii.

Generate receipts from the sale of the Western Development Zone land
to reduce site footprint and enable a bullet payment in the PFI.

Complete necessary enabling works by the appropriate date to allow
commencement of the PFI development to timetable and completed by
March 2016.

Reduce the Trust bed base by 20 beds through the impact of the
Transformation Programme. This will enable the release of the inpatient
wards of the retained estate.
Transformation Programme: The Trust will deliver high quality, innovation,
productivity and prevention to ensure that the RNOH is the safest, most
efficient and effective provider of specialist orthopaedics across the whole
patient pathway in the UK. This will be achieved through continuing the
delivery of our clinically led transformation programme. The service
transformation programme and associated Cost Improvement Programme is
supported by the implementation of a medical management and clinical
engagement plan that ensures all clinical service transformation projects are
clinically led and maintain or enhance quality outcomes for our patients.
Over the next five years the following objectives will be achieved:

Improve procurement of medical supplies through a process of
consolidation of the ranges procured to allow more cost-effective
ranges to be procured.

Improve theatre utilisation to 85% of available slots – allowing scope for
the increased income growth of 2.5% per annum.

Reduce average length of stay through the continuation of the
enhanced recovery programme that will enable the successful
mobilisation of patients at an earlier stage.

Increase imaging capacity through the provision of an additional MRI.
The continued focus within this area will be on improving the patient pathway in
an efficient manner to avoid delays and whilst enhancing the patient journey. This
will allow cost improvement efficiencies enabling greater numbers of patients to
be treated with less resource. Clinical quality however remains foremost in the
thinking of the Trust and will continue to be paramount.
78
iii.
Organisational Development Programme: Recruiting and retaining the best
specialist staff in the UK and internationally to protect and enhance the Trust’s
clinical care standards and academic status. The Trust will continue to build
the RNOH brand, profile and external focus whilst embedding our corporate
values across the organisation.
Over the next five years the following objectives will be achieved:

Launch of the Trusts’ Organisational Development strategy to further
set out the development path in this area.

Consider the application of the hub and spoke model of treatment, with
RNOH services being provided at other provider sites. The Trust is
currently considering the options for a piloted model of this approach.

Increase the scope and size of Private Patient facilities through a
planned Joint Venture with a private sector provider.
The Trust undertook a bottom-up planning process with clinical staff to determine
service development priorities in the future. This ensured that the corporate strategy and
operational delivery were congruent, in addition to further embedding clinical and
managerial ownership of our future direction.
This approach allows the clinical divisions to develop robust business plans which are
then consolidated to form the core of the Trusts Annual Operating Plan. These plans are
monitored through a process of performance management and regular review.
These plans therefore form the core of our future service development programme, and
will focus on the re-provision of a substantial part of the Stanmore estate, whilst
improving the patient experience and increasing productivity.
79
Chapter 6: Financial Evaluation
The financial plan summarises the Trust’s historical financial performance as well as
outlining the short and medium term financial plans required to deliver the service
strategy for the next five years. This chapter also explains how the Trust has delivered a
series of underlying sustained surpluses.
The financial plan also consolidates all the key components of the Integrated Business
Plan and shows the Trust to be in a strong position to deliver its strategy having tested
both income and expenditure projections under a series of downside risks. These
downside risks are further explored in Chapter 7. The purpose of this section is therefore
to:

Outline the financial implications of the Trust’s strategy as detailed in the LongTerm Financial Model (LTFM).

Demonstrate how the Trust has reacted to historic financial pressures and how it
will overcome future ones.
The long-term financial model represents all the key components in this business plan
and demonstrates that the strategic direction of the Trust is both profitable and
sustainable.
The financial plans demonstrate that the Trust has a clear understanding of its current
cost base and income sources through the analysis of historical financial performance,
trend analysis and the development of cost profiles to inform the long-term plan. The
LTFM therefore reflects:

The Trust’s understanding of the financial implications of its evolving activity and
future forecasting anticipated changes in activity and costs.

The financial requirements of the Operating Framework and associated NHS
planning assumptions.

The arrangements the Trust has made to ensure its Phase One redevelopment
plans for the Stanmore site are affordable and sustainable.
Historical Financial Performance
The Trust has continued to make progress in clearing its historical deficits and delivered
a surplus of £1.1 million in 2011/12, achieving a Financial Risk Rating (FRR) score of 3,
representing an improvement on the FRR of 2 achieved in the preceding year. The
historical deficit stood at £1.7 million at the end of 2011/12, and is planned to be
achieved during 2012/13.
80
These deficits were recorded were recorded in the period 2004/05 to 2006/07 and
amounted to a cumulative deficit of £4.6 cumulatively. Table 1 below highlights progress
on achieving breakeven performance from 2009/10 onwards.
Table 1: Historical Breakeven Performance 2009/10 – 2011/12
Breakeven Performance
Retained surplus/(deficit) for the year
Adjustments for Impairments
Break even in-year position
Break-even cumulative performance
2009/10 2010/11 2011/12
£'000
£'000
£'000
154
(911)
1,102
872
1,026
(911)
1,102
(1,928) (2,839) (1,737)
With the exception of 2010/11, which will be explored further in the Normalised Earnings
analysis further on, the Trust has now consistently reported a surplus from 2007/08
onwards. This performance reflects the strong financial management that has developed
across the organisation and the commitment from all staff groups to deliver on cost
improvement schemes. A more detailed view of the Trust’s performance for the last
three years and forecast outturn for 2012/13 is shown in Table 2.
Table 2: Income and Expenditure Accounts 2009/10 – 2012/13
Historic Income & Expenditure
Income
NHS clinical income
Non NHS clinical income
Other income
Total operating income
Expenses
Pay costs
Drug costs
Clinical supplies & services
Other non pay costs
Total expenses
EBITDA
Fixed Asset Impairments
Depreciation
Interest receivable
Interest payable - loans
PDC dividend
Net surplus
2009/10 2010/11 2011/12 2012/13
Actual Actual Actual Forecast
£m
£m
£m
£m
82.0
7.0
5.4
94.4
89.8
5.5
7.2
102.5
101.2
5.8
4.8
111.8
104.9
6.1
4.9
115.9
(49.8)
(1.8)
(22.9)
(14.1)
(88.6)
(55.7)
(1.9)
(25.5)
(15.3)
(98.3)
(60.0)
(2.5)
(27.8)
(15.3)
(105.7)
(61.6)
(2.5)
(28.4)
(15.9)
(108.4)
5.8
(0.9)
(3.2)
0.0
(0.0)
(1.6)
0.2
4.1
0.0
(3.6)
0.0
(0.0)
(1.5)
(0.9)
6.0
0.0
(3.4)
0.0
(0.1)
(1.5)
1.1
7.5
0.0
(3.5)
0.0
(0.1)
(1.7)
2.3
81
The income and expenditure performance in 2011/12 came against a context of
increased activity during the year of 7%, and full achievement of access targets in
throughout the period. This upward trend in activity levels is consistent with previous
years, which have seen activity growth of a similar scale. This level of growth has been
accommodated through a combination of additional investment in increasing capacity
and utilising service transformation programmes to improve efficiency.
2011/12 Income and Expenditure Analysis
The Trust generated total income of £111.7 million during 2011/12, with Primary Care
Trust clinical income accounting for 86% of total income. The main sources of income
for the Trust during the year are set out in the chart below.
Chart 1: 2011/12 Income by source
2011/12 Summary Income (£m)
Strategic Health
Authorities 5.0
4%
Other Income
6.4 6%
Private patients
4.1 4%
Primary Care
Trusts 96.2 86%
Total income increased by 9% on the prior year, with this increase largely being derived
from increases in clinical income, with PCT clinical income increasing by 12% from
2010/11. This is consistent with both the impact of increased activity, as well as
increased complexity of clinical activity undertaken.
Costs increased by £7.1million from 2010/11, wholly relating to increases in both pay
and clinical supplies and services costs (each increasing by £4.3 million to £60 million
and £28.7 million respectively). These increases are again reflective of increased
resources input to achieve both access targets and the aforementioned activity increase.
Chart 2 below highlights expenditure by category for 2011/12.
Chart 2: 2011/12 Expenditure by category
82
2011/12 Summary of Operating Expenses (£m)
General
supplies and
services, 6.3,
6%
Depreciation,
3.4, 3%
Other, 3.6, 3%
Clinical
supplies and
services, 28.7,
26%
Pay costs,
60.0, 55%
Establishment,
transport and
premises, 7.0,
7%
The balance of costs was, in the main, incurred on premises (£7 million), asset
depreciation, amortisation and impairment (£3.4 million) and general supplies and
services (£6.3 million). The strong financial management performance has been
achieved by ensuring that:

The Trust’s cost improvement targets have been met A nine year cost
improvement and transformation strategy is in place supported by a
comprehensive downside risk assessment with mitigations to ensure financial risk
is kept to a minimum.

Where additional income from extra NHS activity has been generated, the
efficient management of costs has been undertaken to ensure the effective
utilisation of capacity levels in terms of beds and theatre resources.

Internal and external audit reviews have reported good quality financial controls
with satisfactory control statements within the Annual Reports of recent years.

Robust audit and risk committee processes are in place to ensure effective
governance processes exist to allow the Trust Board to take action when needed
and thus manage and mitigate risks effectively.
Normalised Earnings Analysis
The normalised earnings position for the Trust excludes one off income and expenditure
and therefore reflects the underlying financial position. The table overleaf details all nonrecurrent sources of income and expenditure whilst also demonstrating the continued
improvement in the Trust’s financial position.
83
Table 3: Normalised earnings 2010/11 – 2012/13
Normailsed Earnings
Reported/Forecast Surplus/(Deficit)
PFI Project Management Funding
Donations/Other Non-Recurrent Income
PFI Project Management Costs
Invoicing Error/Fixed Outturn Over-performance
Other Non-Recurrent Costs
Normalised Surplus
2010/11 Actual 2011/12 Actual 2012/13 Forecast
Note
£M
£M
£M
-0.9
1.1
2.3
1
-2.6
2
-0.5
-0.4
3
2.6
0.6
1.1
4
2.6
5
0.9
1.7
2.1
3.0
The significant items are described in further below:1) PFI project management funding of £2.6m was provided to the Trust in 2010/11
following approval of the Outline Business Case for the redevelopment of the
Stanmore campus.
2) Donations/other non-recurring income is largely comprised of the value of assets
donated to the Trust, with the exception of 2011/12, where funding of £0.2m was
provided to the Trust to undertake a review of the available strategic options that
were best suited to take the clinical services of the Trust forwards.
3) PFI project management costs are comprised of the required support to move the
redevelopment of the Stanmore site forwards.
4) The invoicing error relates to a material billing error of £0.7m in respect of the
irrecoverable under-invoicing of several purchasing consortia. This error, together
with the agreement of a fixed-value contract with a major NHS commissioning
consortium, against which the Trust significantly over-performed against by £1.9m
were the significant factors for the reported deficit in 2010/11.
5) Other non-recurrent costs relate to the significant increase in the provision for
doubtful debt in 2011/12 of £0.7m as the Trust moved to strengthen its balance
sheet, with the residual balance of £0.2m being the contra expenditure to the
strategic option funding previously described in Note 3 above.
The improvement in the underlying financial position of the Trust is congruent with the
reduction in Reference Cost Index (RCI) scores of the Trust over recent years, with the
RCI score of 157 in 2009/10 falling to 135 in 2011/12. Whilst the Trust continues to have
the highest RCI provider score, the decrease points to improved efficiency over the
period as the Trust embeds the transformational programme within the organisation. RCI
scores from 2007/08 to the present day are further discussed in the section below.
84
Reference Cost Index
The Trusts’ reference cost index (RCI) scores since 2007/08 are set out in Table 4
below. As can be seen from the table, the RCI score for the Trust has decreased
markedly over the last five years. This again underlines the improvement the Trust has
made in delivering services more efficiently.
Table 4: Reference cost index scores 2007/08 – 2011/12
Year
Reference Cost Index
2007/08
155
2008/09
148
2009/10
157
2010/11
132
2011/12
135
Although the Trust will aim to reduce its RCI through reduction in costs, as a highly
specialist provider in low volume/ high cost care, the organisation is very likely to
continue to have an RCI score above the national average of 100. This is further
evidenced by the number of specialist hospitals having an RCI above 100 including
successful Foundation Trusts. Examples of such are Papworth Hospital NHS Foundation
Trust (RCI 116, Monitor Financial Risk Rating level 5), Great Ormond Street Hospital for
Children NHS Foundation Trust (RCI 122, Monitor Financial Risk Rating level 4) and The
Royal Orthopaedic Hospital NHS Foundation Trust (RCI 113, Monitor Financial Risk
Rating level 4). The Trust will also proactively work to ensure Reference Costs
adequately reflects the specialist nature of the care provided to further enhance the use
of the information produced.
Cost Improvement Plans
The Trust has implemented a multi-year Cost Improvement Plan (CIP) that aims to seek
the transformation of the Trust as one of the enablers for the redevelopment. Key to this
is Transformation Programme, which seeks to redesign and implement major service
improvements. This covers the significant work streams that are required to deliver
savings, such as improved prostheses procurement, aligning of theatre and inpatient
capacity, and reducing ad-hoc and unplanned working. The Service Transformation
Programme is governed by the Service and Transformation Committee, a formal subcommittee of the Board, and is chaired by the Trust Chair. The Board has therefore put
in place an Assurance Framework to monitor the delivery of the CIP and service
transformation plan during the procurement phase of the proposed redevelopment
project.
85
The Service and Transformation Committee has clinical representation to ensure that the
quality of patient care is not impacted, with savings schemes being sanctioned at both
Performance Committee and Trust Board as part of the governance process.
Responsibility for the delivery of schemes has been assigned, with updates of major
work streams provided to the Service and Transformation Committee. Further assurance
can be derived from the track record of achievement of prior and in-year CIP schemes,
which is shown below in Table 5. All schemes are recurrent.
Table 5: CIP performance against plan 2010/11 – 2012/13
Year
CIP Target £M
Actual/Forecast
Achievement £M
2010/11
2.3
3.1
2011/12
4.3
4.3
2012/13
5.4
5.4
Impact of The National Tariff
The Trust’s financial performance has to a degree been influenced by changes to the
way it is funded through the national tariff. A considerable proportion of activity is funded
under the Payment by Results (PbR) framework with prices set nationally from the
collection of reference cost data. Elements of activity considered too complex or
specialist sit outside of tariff and are charged at a rate agreed with local commissioners.
The introduction of PbR during 2006/07 caused significant turbulence to funding streams
for specialist hospitals as the tariff failed to recognise the complexity of the patients
treated. The introduction of HRG4 in 2009/10 was meant to resolve these issues,
however certain complex joint and reconstruction procedures were still subject to
significant losses.
Given the scale of the issue, the Trust formed an alliance (known as the Specialist
Orthopaedic Alliance or SOA) with other specialist orthopaedic hospitals to work with the
Department of Health PbR team to mitigate areas where material tariff inequality
existed. Orthopaedic expert working groups are continuing to work with the Department
of Health PbR team to further optimise the orthopaedic codes to provide a greater
degree of granularity in acknowledgement that the reimbursement of complex activity is
currently not adequately reimbursed through the existing HRG4 currency. The Trust is
represented on several of these expert working groups and will continue to work other
members of the Specialist Orthopaedic Alliance to further refine the tariff. No resolution
of the remaining areas of inequality has however been assumed in future plans.
86
Balance Sheet
The forecast outturn Balance Sheet for 2012/13 together with the actual Balance Sheets
for the prior three years are summarised in the Table overleaf.
Table 6: Balance Sheets 2009/10 – 2012/13
87
31st March
2010
31st March
2011
31st March
2012
31st March
2013
Actual
£m
Actual
£m
Actual
£m
Forecast
£m
ASSETS, NON CURRENT
Property, Plant and Equipment
Assets, Non-Current, Total
55.1
55.1
56.3
56.3
51.5
51.5
55.4
55.4
ASSETS, CURRENT
Inventories
NHS Trade Receivables, Current
Non NHS Trade Receivables, Current
Other Receivables, Current
Other Financial Assets, Current
Prepayments, Current, PFI related
Prepayments, Current, non-PFI related
Cash and Cash Equivalents
Assets, Current, Total
1.9
1.3
2.6
0.0
6.9
0.0
0.7
2.0
15.3
2.3
2.2
1.4
0.0
8.0
0.0
0.8
1.2
15.8
2.5
1.1
1.4
0.1
6.9
0.0
0.6
1.5
14.1
2.5
5.5
2.1
0.1
6.9
0.0
0.8
1.9
19.8
ASSETS, TOTAL
70.5
72.2
65.6
75.2
0.0
0.0
(0.5)
(0.1)
(7.5)
(2.1)
(0.8)
(3.7)
(0.1)
(14.9)
0.0
0.0
(0.4)
(0.1)
(10.2)
(3.3)
(0.2)
(2.6)
(0.1)
(16.9)
0.0
(1.2)
(0.5)
(0.1)
(4.3)
(2.2)
(0.9)
(3.8)
(0.0)
(13.0)
0.0
(2.5)
(1.0)
(0.1)
(6.3)
(2.4)
(0.9)
(4.3)
0.0
(17.4)
0.5
(1.0)
1.2
2.4
TOTAL ASSETS EMPLOYED
(1.0)
0.0
(0.5)
(0.1)
(1.6)
0.0
54.0
(1.8)
0.0
(0.6)
(0.0)
(2.5)
0.0
52.9
(2.8)
0.0
(0.6)
(0.0)
(3.4)
0.0
49.2
(4.9)
(0.8)
(0.6)
(0.0)
(6.3)
0.0
51.5
TAXPAYERS' EQUITY
Public dividend capital
Retained Earnings (Accumulated Losses)
Donated asset reserve
Revaluation reserve
TOTAL TAXPAYERS EQUITY
25.6
2.3
10.0
16.0
54.0
25.6
1.4
9.6
16.2
52.9
25.6
4.9
0.0
18.7
49.2
25.6
7.2
0.0
18.7
51.5
Balance Sheet Description
LIABILITIES, CURRENT
Bank Overdraft and Working Capital Facility
Interest-Bearing Borrowings , Current
Deferred Income, Current
Provisions, Current
Trade Payables, Current
Other Payables, Current
Capital Payables, Current
Accruals, Current
Finance Leases, Current
Liabilities, Current, Total
NET CURRENT ASSETS (LIABILITIES)
LIABILITIES, NON CURRENT
Interest-Bearing Borrowings, Non-Current
Deferred Income, Non-Current
Provisions, Non-Current
Finance Leases, Non-current
Liabilities, Non-Current, Total
88
Capital expenditure for the period 2009/10 – 2012/13 has amounted to £20 million, of
which £4.6 million has been sourced from capital loans, and a further £0.7 million from
charitable donations. The balance has been the use of internal resources, such as reinvestment of depreciation and surpluses. The capital plan for 2012/13 will see
expenditure of £7 million, with significant investment for a new MRI scanner, and the
construction of a Children’s High Dependency Unit.
Cash Flow Statement
The forecast outturn Cash Flow for 2012/13 together with the actual Cash Flows for the
prior three years are summarised in the Table below.
Table 7: Statement of Cash Flows 2009/10 – 2012/13
Cashflow Description
2009/10 2010/11
Actual Actual
£m
£m
2011/12 2012/13
Actual Forecast
£m
£m
Opening Cash Balance
2.3
2.0
1.2
1.4
EBITDA
5.8
4.1
6.0
7.5
Excluding Non cash I&E items
Movement in working capital
Cash Flow from Operations
(0.4)
(1.4)
3.9
(0.5)
1.4
5.1
0.0
(3.8)
2.3
(0.3)
(1.4)
5.8
Movement in long-term provisions/liabilities
Capex spend
Cash Receipt for land and equipment sales
Cash Flow before Financing
(0.0)
(4.9)
0.0
(1.0)
0.1
(5.2)
0.0
(0.1)
0.0
(2.9)
0.0
(0.6)
0.0
(7.0)
0.0
(1.2)
Interest (paid) on loans and leases
Drawdown of loans and leases
Repayment of loans and leases
Public Dividend Capital received
Public Dividend Capital repaid
Movement in Other grants
Dividends paid
Net cash inflow / outflow
(0.0)
1.1
(0.1)
1.3
0.0
0.0
(1.6)
(0.3)
(0.0)
1.2
(0.4)
3.0
(3.0)
0.0
(1.5)
(0.8)
(0.1)
3.0
(1.0)
0.0
0.0
0.3
(1.5)
0.2
(0.0)
5.2
(1.8)
0.0
0.0
0.0
(1.7)
0.5
2.0
1.2
1.4
1.9
Closing Cash Balance
89
A working capital loan of £3 million was taken out during 2011/12 to support operational
cash pressures and improve Better Payment Practice Code Compliance (BPPC). This is
repayable over a four year period by the generation of surpluses with the last repayment
to be made in March 2016.
A further loan of £3 million is to be taken out in 2012/13 to further boost liquidity and
improve BPPC compliance. This loan will again be repaid by March 2016.
Better Payment Practice Code Compliance
The Trust has historically had an uneven track record against the target of paying
invoices within 30 days of receipt. The percentage of Non-NHS invoices by volume paid
within the timescale since 2010/11 is shown in Table 8 below.
Table 8: Performance Against the Better Payment Practice Code
Year
Volume of Non-NHS
Within BPPC Target
2010/11
9%
2011/12
20%
2012/13
40%
Invoices
Paid
Drawdown of the additional Working Capital Loan of £3 million in 2012/13 will allow for a
further improvement against this metric.
Future Financial Plans
The Trust has submitted its Long Term Financial Model (LTFM) constructed from the
anticipated 2012/13 outturn. The LTFM is attached as an appendix to this Integrated
Business Plan.
The future financial plan is based on a number of key planning assumptions that are
informed by our strategy. The most significant assumptions are described below.
Clinical Income
The following assumptions have been applied to the 2012/13 forecast outturn:

National tariff and deflation – In line with the latest planning guidance a 5%
efficiency factor has been assumed for 2013/14 – 2014/15, before decreasing to
a 4.2% efficiency requirement for the remainder of the term. Funding for
inflationary pressures will reduce the deflator embedded within tariff to -1.3% for
the period 2013/14 – 2014/15, and -0.2% thereafter.
90

Non-tariff prices – A similar deflation of -1.3% (2013/14 – 2014/15) and -0.2%
thereafter has been assumed to maintain consistency with items charged at
national tariff.

CQUIN – These are expected to hold at the current level of 2.5% throughout the
period of review.
Activity - NHS income growth of 2.5% per annum. This is considered a prudent
reflection of the increasing demand for the services of the Trust, which have been
increasing at a rate well in excess of this figure. This growth is particularly
concentrated outside of the Trusts’ local North Central London and North West
London commissioners.


No structural change to the national tariff in terms of a resolution to areas of tariff
inequality for specialist orthopaedic hospitals has been assumed.
Other Patient Related Income

Private Patients – Inflation of 3% per annum has been assumed, which is
consistent with a market analysis undertaken for the Trust.

Private patients – Increase in market share to grow income to £6.6 million from
the £4.3 million achieved in 2011/12 by 2016/17. This is considered prudent
based on the market analysis that estimated that Trust clinical staff were
undertaking £46 million of private patient activity in totality. The Trust has brought
in a private sector provider to assist in growing the business, and the additional
increase to £6.6 million within the given timescale is considered modest. No
further contribution from the proposed Private Patient Joint Venture has been
assumed.

Inflation around Education and Research has assumed to be 2.5% - this is
consistent with assumptions around NHS inflationary pay settlements for the
review period.
Pay

Pay – 3% for the period 2013/14 – 2014/15 inclusive of cost pressures, followed
by 3.5% inclusive of cost pressures for the period 2015/16 – 2021/22. Within
these figures 2% inflation and 1% incremental pay progression as per Agenda for
Change terms and conditions has been assumed.

The appointment of additional clinical staff to support the delivery of the increased
activity.
Non-Pay
91

General non pay has been inflated by 2.9% each year to take account of generic
inflationary pressures.

A further 2% cost pressure in excess of the above has been factored in to take
account of items such as energy costs and NHSLA insurance premia to reflect
the large increase in costs in these areas.

Additional marginal costs of undertaking additional activity aligned have also
been assumed.

A contingency reserve of 0.5% of income (£0.6 million) has been maintained
through the period of review.
Table 9 below summarises the impact of the income and expenditure assumptions
noted above on the Trust’s LTFM. This indicates a consistent increase in annual
surpluses rising from £1.3m in 2011/12 to £4.2m in 2015/16. These surpluses will be reinvested in the Trust estate.
Table 9: Forecast Income and Expenditure Account 2013/14 – 2017/18
Income & Expenditure
Income
NHS clinical income
Non NHS clinical income
Other income
Total operating income
Expenses
Pay costs
Drug costs
Clinical supplies & services
PFI - operating expense
Other non pay costs
Total expenses
EBITDA
Profit / (Loss) on disposal of fixed assets
Fixed Asset Impairments
Depreciation
Interest receivable
Interest payable - loans
Interest element - Unitary Tariff
PDC dividend
Net surplus
2013/14 2014/15 2015/16 2016/17
Planned Planned Planned Planned
£m
£m
£m
£m
2017/18
Planned
£m
106.6
7.0
6.7
120.4
107.8
8.1
5.6
121.5
110.3
8.7
5.9
124.8
112.8
9.3
6.4
128.5
116.1
10.0
6.6
132.7
(62.7)
(2.6)
(28.6)
0.0
(15.9)
(109.9)
(63.9)
(2.8)
(28.9)
0.0
(15.0)
(110.5)
(65.3)
(2.8)
(29.2)
0.0
(15.7)
(112.9)
(66.2)
(2.9)
(31.1)
(1.4)
(14.3)
(116.0)
(68.4)
(3.1)
(32.6)
(1.5)
(14.2)
(119.8)
10.5
2.2
(0.3)
(3.9)
0.0
(0.1)
0.0
(1.8)
6.6
10.9
0.0
(3.5)
(4.2)
0.1
(0.0)
0.0
(1.9)
1.6
11.9
0.0
(12.3)
(4.1)
0.3
(0.0)
0.0
(2.0)
(6.3)
12.6
0.0
0.0
(5.4)
0.2
(0.0)
(3.6)
(2.2)
1.5
12.9
0.0
0.0
(5.6)
0.2
(0.0)
(3.6)
(2.2)
1.8
Note is made of two sources of non-recurrent income within the forward forecast,
namely:
92

A profit of £2.2 million in 2013/14 associated with the crystallisation of the sale of
property in central London in which the Trust has a residual interest;

The income and expenditure benefit from the receipt of donated assets. For
2013/14 this is £1.8 million as the Outpatient department at Stanmore is renewed,
and an estimate £0.3 million per annum thereafter.
Cost improvement plan
The Cost Improvement Plan (CIP) target over the first five years of the model is £24.4
million, and £43.8 million over the entire period of review. The targets for the first five
years are shown in Table 10 below.
Table 10: CIP Target 2013/14 – 2017/18
Future CIPs
2013/14
£000
2014/15 2015/16 2016/17
£000
£000
£000
2017/18
£000
Target
5,168
5,154
5,547
4,628
3,914
% of cost base
4.5%
4.5%
4.7%
3.9%
3.2%
Although the Trust is planning to deliver net surpluses over the next nine years in order
to meet NHS planning assumptions and the costs of the Stanmore site redevelopment
this is not without risk. The main financial risks facing the Trust have been identified as
the delivery of the cost improvement strategy and the service transformation
programme.
To mitigate this risk, the Board has put in place an assurance framework to monitor the
delivery of the cost improvements and service transformation plans. The Trust has
received constructive feedback from NHS London as part of the Outline Business Case
Addendum approval with regard to its long-term cost improvement programme and is
confident of delivering the strategy.
In terms of the assurance process, the Trust has identified key performance indicators
that will need to be delivered to enable the Board to continue to be assured that the cost
improvement and service transformation plan remains achievable. These key indicators
and milestones are formally monitored by the Trust Board through a formal Service
Transformation Committee (STC).
Service transformation is directly linked to a successful, sustainable future for the RNOH.
Our long-term goal is to ensure sound and stable finances for the RNOH, so our rebuild
and our future are secure whilst achieving world class services for our patients and
improving staff experience.
93
Progress and delivery are monitored by the programme office on a day to day basis, and
through the Service Transformation Committee, which reports to the Trust Board.
The improvements in productivity and patient experience are expected to deliver
substantial benefits within the following areas which align to the vision and principal
objectives of the Trust and the service transformation programme.




Reduced costs
Improved patient experience
Release of capacity
Improved working lives
These benefits will arise from projects which will enable significant improvements in:




length of stay
outpatient and inpatient experience
procurement for clinical supplies and stock control
theatre productivity

making best use of scarce capacity
The purpose of the STC is to support the Trust’s Assurance Framework through
monitoring the establishment of detailed plans and delivery of the service transformation
plan.
The STC monitoring provides assurance both that initiatives are being achieved in line
with plan, and that projects have been considered for any qualitative aspects. This is of
significance during the procurement phase of the proposed redevelopment project as
the sustainability of the Trust’s redevelopment plans are dependent on the delivery of
the service transformation plan and cost improvement programme.
The committee is a non-executive committee of the Board, and is established in
accordance with the Trust’s Standing Orders, Standing Financial Instructions and
Scheme of Delegation. The monitoring reports received by the committee will also be
shared with external stakeholders such as North Central London Commissioning
Agency and NHS London.
The main duties of the STC are as follows:

Monitor the service transformation plan and CIP key performance indicators and
agree the detailed reporting arrangements that will be needed to gain assurance
on delivery.
94

Seek assurance that that the work of the individual cost improvement and service
transformation projects are fully integrated into the RNOH’s Assurance
Framework and supporting risk registers and that the process integrates with
developing the Trust’s existing key strategies and annual plans
Clinical engagement, particularly of medical staff, is crucial for the success of the service
transformation programme. Therefore all transformation projects with any impact on
clinical work have an identified clinical lead who is a consultant from the appropriate
speciality. Many projects, such as the enhanced recovery programme, work with several
consultants in implementing change, as well as having a designated clinical lead.
Usually, projects also have several clinical team members covering the range of clinical
professions.
A number of senior consultants in management roles are members of the STC. The
Chair of the Clinical Governance Committee is also a member of the STC.
Key Performance Indicators (KPIs) have been established for the service transformation
programme, grouped into the main headings of:

Quality, covering national indicators and CQUINS

Procurement of medical supplies and equipment

Workforce, in particular reduction in staff rosters and temporary staff bookings

Productivity, detailing length of stay, cancellations and theatre utilisation.
Workforce strategy
Approximately 64% of the Trust’s expenditure relates to pay costs, and it is therefore
axiomatic that control of workforce numbers will play a key role in the future delivery of
the Trust CIP programme. The Trust has undertaken a detailed workforce review as part
of its workforce strategy that has considered:

Future activity requirements and service developments.

Changes to the clinical care and administration pathway.

Opportunity for skill mix review.
Considering the above information, a workforce plan identifying the key changes over
the next 5 years has been considered, and is presented below.
95
Table 11: Staffing by Group 2012/13 – 2017/18
Staff Group
Consultants
Other Medical
Nurses
Scientific, Therapeutic & Technical
Other clinical staff
Non-clinical staff
Sub-total - substantive and
Agency
Total
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18
WTE
WTE
WTE
WTE
WTE
WTE
Forecast Planned Planned Planned Planned Planned
79.6
82.1
84.7
87.4
87.4
90.1
85.1
83.0
82.4
81.9
80.0
80.8
418.5
423.1
421.4
422.1
416.6
419.0
234.3
240.5
247.2
253.2
256.6
259.5
128.1
131.0
131.9
134.5
137.2
141.7
357.4
345.8
336.9
319.6
311.3
306.0
1,303.0 1,305.6 1,304.5 1,298.8 1,289.0 1,297.1
25.6
19.4
15.0
11.5
9.0
7.7
1,328.7 1,325.0 1,319.5 1,310.3 1,298.1 1,304.8
Given the operational efficiencies planned as detailed in the CIP plan, it is anticipated
that workforce numbers can be reduced by a net 75WTE over the period of the plan.
The qualitative impact of schemes will be considered at every step, and will not proceed
if they are thought to diminish clinical quality.
Service Line Reporting
Service line reporting (SLR) has been implemented into the Trust and is currently being
refined to hone its suitability for interrogation by clinical users. Whilst this is being
undertaken, contribution analysis by service area is being undertaken to identify
services that are not generating a significant enough contribution to cover their indirect
costs. This contribution analysis is then used to advise on future workforce plans. It is
anticipated that SLR will be fully operational by the end of June 2013.
96
PFI and affordability
The Trust’s long-term financial model includes the impact of the proposed
redevelopment, financed and constructed through a PFI, with a unitary charge
paid over the life of the contract. The Trust has estimated a shadow unitary
tariff revenue impact of £6 million per annum (at nominal prices), which
includes the cost to fund, design, build and maintain (including lifecycle) the
new build investment. The tariff assumes bank debt financing.
The interest and operating expense elements of the AUP (£5.2 million) have
been incorporated into the table below, along with the depreciation charges in
relation to the new build investment. In addition, the affordability envelope
includes the revenue consequences of the purchase of medical equipment.
Table 12 - Source and Application of PFI Scheme (2016/17 Nominal
Prices)
£’m
Application to:
Annual Unitary Tariff – interest and operating costs elements
5.2
Depreciation - re new build
0.9
Additional costs re energy, soft FM, and rates
0.8
Total
6.9
Funded/sourced from:
Savings re Hard FM costs on replaced estate
0.4
Energy savings
0.1
Savings re existing capital charges on replaced estate/equip
0.2
Improved productivity through cost improvement strategy
10.1
Total
The Trust is confident that improved productivity will result in the operational
efficiencies required to source the balance of the annual revenue funding
required for the new hospital investment.
The RNOH has the one of the highest reference cost scores in the country
and is recognised that it provides services from one of the most inefficient
estates currently in operation.
The Trust therefore believes that significant reconfiguration scope exists to
achieve the efficiency benefits both pre and post redevelopment in order to
deliver the levels of affordability necessary to fund the estate capital
programme presented within the long-term financial plan.
97
6.9
The savings challenge is noted in Table 10 above, with detailed savings
presented in the LTFM itself.
Balance Sheet
Balance Sheets for the forthcoming five years are set out below.
Table 13: Balance Sheet 2013/14 – 2017/18
31st March
2014
31st March
2015
31st March
2016
31st March
2017
31st March
2018
Planned
£m
Planned
£m
Planned
£m
Planned
£m
Planned
£m
ASSETS, NON CURRENT
Property, Plant and Equipment and intangible assets
Property, plant & equipment (PFI)
Assets, Non-Current, Total
59.5
0.0
59.5
53.6
0.0
53.6
71.7
49.0
120.7
71.6
48.2
119.8
69.9
47.4
117.3
ASSETS, CURRENT
Inventories
NHS Trade Receivables, Current
Non NHS Trade Receivables, Current
Other Receivables, Current
Other Financial Assets, Current (e.g. accrued income)
Prepayments, Current, non-PFI related
Cash and Cash Equivalents
Assets, Current, Total
2.5
5.5
2.1
0.1
6.9
0.8
1.7
19.6
2.5
3.8
2.2
0.1
6.9
0.8
24.1
40.3
2.5
4.6
2.5
0.1
6.9
0.8
7.5
24.9
2.5
4.7
2.7
0.1
6.9
0.8
8.5
26.2
2.5
4.8
2.9
0.1
6.9
0.8
11.4
29.4
ASSETS, TOTAL
79.1
93.9
145.6
146.0
146.7
0.0
(2.2)
(1.0)
(0.1)
(6.2)
(2.4)
(0.9)
(4.3)
(0.0)
(17.0)
0.0
(1.5)
(1.0)
(0.1)
(3.8)
(2.4)
(0.9)
(4.3)
(0.0)
(14.0)
0.0
(0.3)
(1.0)
(0.1)
(4.0)
(2.4)
(0.9)
(4.3)
(0.7)
(13.6)
0.0
(0.3)
(1.0)
(0.1)
(4.1)
(2.4)
(0.9)
(4.3)
(0.8)
(13.8)
0.0
(0.3)
(0.8)
(0.1)
(4.3)
(2.4)
(0.9)
(4.3)
(0.8)
(13.8)
NET CURRENT ASSETS (LIABILITIES)
2.6
26.3
11.3
12.4
15.6
LIABILITIES, NON CURRENT
Interest-Bearing Borrowings, Non-Current
Deferred Income, Non-Current
Provisions, Non-Current
Finance Leases, Non-current
Other Liabilities, Non-Current
Liabilities, Non-Current, Total
TOTAL ASSETS EMPLOYED
(2.8)
(0.6)
(0.6)
(0.0)
0.0
(4.0)
58.1
(1.2)
(0.4)
(0.6)
(0.0)
0.0
(2.3)
77.7
(1.0)
(0.2)
(0.6)
(0.0)
(58.8)
(60.6)
71.4
(0.7)
0.0
(0.6)
(0.0)
(58.0)
(59.4)
72.9
(0.4)
0.0
(0.6)
(0.0)
(57.2)
(58.2)
74.7
TAXPAYERS' EQUITY
Public dividend capital
Retained Earnings (Accumulated Losses)
Revaluation reserve
TOTAL TAXPAYERS EQUITY
25.6
13.8
18.7
58.1
25.6
15.3
36.7
77.7
25.6
9.1
36.7
71.4
25.6
10.6
36.7
72.9
25.6
12.4
36.7
74.7
Balance Sheet Description
LIABILITIES, CURRENT
Bank Overdraft and Working Capital Facility
Interest-Bearing Borrowings , Current
Deferred Income, Current
Provisions, Current
Trade Payables, Current
Other Payables, Current
Capital Payables, Current
Accruals, Current
Other Liabilities, Current
Liabilities, Current, Total
98
Financing and Working Capital
The Trust will strengthen its liquidity throughout the plan period by the delivery
of planned surpluses and further working capital efficiencies. Assumptions are
as follows:




A working capital facility of £5m to cover 30 days operational expenses
(agreement to be negotiated)
The LTFM is consistent with achievement of Tier 2 Prudential
Borrowing Limits (PBL), with significant headroom around the PBL. It is
estimated that margin of up to £37.7m of additional borrowing at an
interest rate of 6% is possible.
Debtor days to remain constant at 15 days for NHS debt during the
period of the LTFM.
Creditor days to improve to 20 days as the liquidity position of the Trust
improves by 2014/15.
The future cash flow statement is shown below evidencing an increase in
balances during the LTFM.
Table 14: Cash Flow 2013/14 – 2017/18
Cashflow Description
2013/14 2014/15 2015/16 2016/17 2017/18
Planned Planned Planned Planned Planned
£m
£m
£m
£m
£m
Opening Cash Balance
EBITDA
Excluding Non cash I&E items
Movement in working capital
Cash Flow from Operations
Movement in long-term provisions/liabilities
Capex spend
Cash Receipt for land and equipment sales
Cash Flow before Financing
Interest (paid) on loans and leases
Drawdown of loans and leases
Repayment of loans and leases
Public Dividend Capital received
Public Dividend Capital repaid
Movement in Other grants
Dividends paid
Interest (paid)/ received on cash balance
Interest element of PFI Unitary Charge
Net cash inflow / outflow
Closing Cash Balance
99
1.9
1.7
24.1
7.5
8.5
10.5
(1.8)
(0.3)
8.4
0.0
(6.5)
2.2
4.1
(0.0)
0.0
(2.5)
0.0
0.0
0.0
(1.8)
0.0
0.0
(0.2)
10.9
(0.3)
(1.0)
9.6
0.0
(4.3)
21.0
26.3
(0.0)
0.0
(2.2)
0.0
0.0
0.0
(1.9)
0.1
0.0
22.4
11.9
(0.3)
(1.2)
10.4
0.0
(23.6)
0.0
(13.3)
(0.1)
0.0
(1.5)
0.0
0.0
0.0
(2.0)
0.3
0.0
(16.6)
12.6
(0.4)
(0.3)
11.9
0.0
(4.2)
0.0
7.7
(0.0)
0.0
(1.0)
0.0
0.0
0.0
(2.2)
0.2
(3.6)
1.0
12.9
(0.4)
(0.4)
12.2
0.0
(2.7)
0.0
9.5
(0.0)
0.0
(1.0)
0.0
0.0
0.0
(2.2)
0.2
(3.6)
2.9
1.7
24.1
7.5
8.5
11.4
Better Payment Practice Code
Performance against the Better Payment Practice Code will improve further in
2012/13 upon drawdown of the £3 million Working Capital Facility, but also in
subsequent years as larger surpluses are delivered. The sale of the Western
Development Zone in 2014/15 will be an additional factor in achieving this
metric.
Monitor Risk Assessment
Financial risk ratings (FRR) for the projected period continue to meet those set
out by Monitor, the independent regulator of Foundation Trusts, and these are
set out in Table 15 below
Table 15: Monitor Financial Risk Ratings 2012/13 – 2020/21
2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 22020/
FRR 3
4
4
4
4
4
4
4
The chapter has described the organisation's historical financial performance
and the rationale for key assumptions in developing the long term financial
model. These assumptions show the organisation building on the good
financial performance of recent years.
The Trust has also estimated potential downsides over the next few years
(shown in Chapter 7 – Risk).
100
4
Chapter 7: Downside Risk Assessment, Mitigation and
Sensitivity Analysis
(This chapter needs a lot more work. Some of the risk management content
currently in Chapter 9 will transfer into this Chapter.)
7.1
Downside Risk Assessment, Mitigation and Sensitivity Analysis
Downside Risk Assessment
The Trust has undertaken a comprehensive analysis of the likely impact of its main
risks. The assessed risks are listed below, with the results of the summary combined
downside case shown in Table 12.
Key sensitivities applied to the downside case include:
1. PbR diagnostic and intervention imaging outpatient tariff – risk exists around the
unwinding of the existing agreement with commissioners in relation to the
charging of diagnostic and interventional imaging. Income is currently received
under a HRG code specifically for diagnostic imaging procedures where the
patient undergoes an invasive process. This income could be at risk as
commissioners seek to include this activity within generic outpatient
appointments and charging.
2. Critical care tariff – the Trust has high cost critical care activity, reflecting the
specialist nature of the complex spinal activity undertaken and required
neurological monitoring and support. As critical care activity moves to a
mandated national tariff, there is a risk that a national average price would work
against a specialist provider such as the RNOH.
3. PFI unitary payment interest rate – whilst potential future interest rate increases
of up to 50 basis points have been factored into the financial model, there is a
risk that swap rates may increase over the 50 basis point margin by the time the
Project Agreement is signed at Financial Close. An estimate for a further 100
basis point increase and the resultant impact on the unitary payment has been
calculated.
4. Capital costs increase by 5% – whilst optimism bias has been factored into all the
capital costs, there remains a risk that construction costs (materials and labour)
may increase further as the development moves closer to completion. The impact
will be higher unitary payments and depreciation charges from the year of
construction.
5. Impairment to Phase 1 new build reduced from 15% to 10% - in the event the
impairment value is less than planned in the year the asset becomes operational
(2016/17) and future depreciation charges are higher.
6. CQUIN Income becomes non-recurrent - current planning guidance does not
address future CQUIN payment assumptions. The Trust has planned on the
basis that they will be recurrently available, but not cumulatively, therefore the
risk of losing this income stream has been identified as a financial risk.
7. Pay inflation – An additional 1% increase has been treated as a sensitivity
outside of 2012/13.
101
8. Non Pay inflation greater than planning assumptions - the Trust has assumed a
2.9% inflationary uplift until 2015/16, before moving to 2.5% for 2016/17 onwards.
An additional 1% has been treated as a further sensitivity.
9. Reduced land sale receipt – Trust only realises £16.25m in land sale receipts
across the site (£8.1m for Western Zone by 2016 and £8.15m by 2020 re the
Eastern and Central Zones). The capital contribution towards the UP would be
funded through the Western Zone receipt and a short term bridging loan to be
repaid upon sale of the other land parcels in 2020. The analysis on this downside
scenario is detailed in Appendix 9.
Table 12: Downside Risk Analysis
Nominal prices
BASE CASE Surplus
Approximate financial impact of sensitivities over 10-year LTFM
12/13
13/14
14/15
15/16
16/17
17/18
18/19
£000s
£000s
£000s
£000s
£000s
£000s
£000s
2,295
5,667
2,138
-7,626
982
1,327
1,415
19/20
£000s
1,468
20/21
£000s
1,544
Downside Scenarios:
Diagnostic and interventional
imaging tariff
Critical care tariff
PFI unitary payment interest
rate - further increase of 100
basis points
394
388
382
377
371
365
360
354
349
-1435
-1414
-1392
-1371
-1351
-1331
-1311
-1291
-1272
-502
-507
-512
-517
-522
-380
-390
-399
-409
-419
-59
-61
-62
-64
-66
Capital costs increase by 5%
Impairment reduction from
15% to 10%
Non-recurrent CQUIN income
Pay awards 1% greater than
planning assumptions
Non Pay inflation 1% greater
than planning assumptions
Land sale receipt reduced to
£16.3m in total
Total Downside Scenarios
Deficit after Downside
impact
-1415
-1394
-1373
-1352
-1332
-1312
-1292
-1273
-1254
-553
-1,105
-1,653
-2,177
-2,745
-3,288
-3,820
-4,352
-245
-472
-679
-869
-1,112
-1,332
-1,522
-1,708
-1,883
-2,701
-3,444
-4,167
-4,870
-540
-7,082
-547
-7,859
-553
-8,581
-560
-9,288
-568
-9,987
-406
2,223
-2,029 -12,496
-6,100
-6,532
-7,166
-7,820
-8,443
102
7.2
Downside Risk Mitigation
The Trust has identified a number of mitigations to offset the impact of the downside
scenarios (see Table 13).
Under a downside scenario, the Trust would have to consider measures that would
be unpalatable and while some schemes may appear similar to those included in the
Cost Improvement Strategy; the approach will be entirely different and will adopt
turnaround principles to deliver savings in addition to those that you would expect
from a normal CIP process. These additional savings will be delivered through policy
change and the application of processes, which will in many cases have to be
imposed rather than delivered by local decision making.
The range of mitigation approaches are incorporated within Table 13 and are
identified as follows:
1. Agency and Bank Recruitment Freeze
The Trust would in the short term re-allocate staff from non-core services to cover
vacancies and would only allow vacancies to be filled through use of bank staff.
Any specialist staff requirements will be re-negotiated to reduce premium rates
paid. The Trust has estimated this could save up to £0.5million per annum.
2. Incremental Drift
The Trust has identified that the value of incremental pay increases is
approximately £0.25million per year. In a full downside scenario, the Trust would
freeze increments.
3. Private Patient Joint Venture
External consultancy around growing the Trusts Private Patient activity by
forming a joint venture with a private sector provider has been undertaken as
noted in section 2.2. Key to the success of this joint venture would be the
provision of a new facility for private activity that would renew the existing
infrastructure, with the funding to come from the private sector partner. Should
the necessary approvals be granted, it would be anticipated that the facility would
be operational for 2015/16, with an additional contribution of £2m. This would
grow over the period of the LTFM to reach £3.5m in 2020/21.
4. Private Patient Joint Venture
Use additional land sales to help fund the private patient venture and achieve an
additional return of circa £0.5m per annum.
5. Asset lives
The Trust would commission an independent expert to re-assess the useful
economic life of its facilities and equipment with the aim of getting an additional
years life where additional maintenance costs are not prohibitive. This would
have to be subject to close liaison with the Trust’s auditors and if agreed, would
release savings of £0.1m per annum.
103
6. Structural tariff reform
The Trust has been advised by the Department of Health that all spinal surgery
with a specialist services tag will be moving to being commissioned by specialist
commissioning as opposed to by PCTs. This move is expected to be undertaken
over the next two years in equal measures. As part of this the Specialist
Orthopaedic Alliance (SOA) trusts are working with the Department to better
inform remuneration rates. A review of costs of specialist spinal surgery has
identified a loss of £1.9m on this tranche of activity. It is estimated that by working
constructively with other members of the SOA and the Department of Health that
this loss can be ameliorated.
7. Interest receivable
A land sale of both the both WDZ and EDZ would be expected to accrue c.£45m
of sale receipts. Allowing for the bullet payment into the PFI this would leave
substantial cash balance. This would be invested on a short term basis to accrue
interest receivable.
8. Reduction in site footprint
Reducing the footprint of the site would result in lower estate costs as elements
were retrenched into the central zone. This would result in lower PDC on the
reduced estate.
9. Focus Private Patients on higher margin activity
In the event of substantial mitigations being required the Trust would seek to
rationalise private patient activity around the more complex joint reconstruction
and spinal surgery elements. This carries with it a greater contribution margin.
10. Core Business Review
The Trust would seek to further grow the level of complexity of work undertaken
at the Trust, in line with a consultancy report earlier in the year that highlighted
that a greater contribution could be made on complex specialist as opposed to
routine work. This is also in keeping with the sectors expectation that more
complex work would flow to the Trust, displacing the more routine activity yielding
approximately £0.5million per annum. In this eventuality the impact on both the
commissioning sector within both North Central London and the remainder of
London could estimated to be keeping with the general proportion of activity (12%
or £60,000 and 33% or £165,000 respectively). For further detail re the Core
Business Review as a mitigation strategy, please refer to Appendix 17 Annex 1.
104
Table 13: Risk Management
BASE CASE Surplus
Total Downside Scenarios (see
above)
Deficit after Downside impact
12/13
£000s
13/14
£000s
14/15
£000s
15/16
£000s
16/17
£000s
17/18
£000s
18/19
£000s
19/20
£000s
20/21
£000s
2,295
5,667
2,138
-7,626
982
1,327
1,415
1,468
1,544
-2,701
-3,444
-4,167
-4,870
-7,082
-7,859
-8,581
-9,288
-9,987
-406
2,223
-2,029
-12,496
-6,100
-6,532
-7,166
-7,820
-8,443
985
1,970
1,940
1,911
1,883
1,854
1,827
Downside Mitigations:
Structural tariff reform
Agency and bank recruitment freeze
Incremental drift
Private Patient development
Non-pay
and
discretionary
expenditure
Increased interest receivable on
back of land sale receipts
Focus private patients on higher
margin complex activity
Buy into Private Patient joint venture
Reduction in site footprint leading to
lower estate costs
Asset lives
Core business review
Total Downside Mitigations
Surplus/-Deficit after Downside
Mitigations:
Revised Base Case Surplus
202
253
252
259
468
266
480
272
2009
492
279
2290
504
286
2583
517
293
2889
530
300
3176
543
308
3478
515
529
545
561
575
589
604
619
634
400
408
416
424
433
447
469
492
517
543
500
525
551
579
368
386
405
425
93
70
500
2,000
95
103
493
2,117
98
106
485
3,358
101
109
478
6,405
103
112
471
7,109
106
114
464
7,935
109
117
457
8,302
111
120
450
8,654
114
123
443
9,025
-702
1,593
-1,327
4,340
-809
1,329
1,535
-6,091
27
1,009
76
1,403
-279
1,136
-634
834
-961
583
The following other downside risk mitigations, income related mitigations have not
been factored into the above table but could be considered if the future economic
climate, within which the Trust operates, changes:
Activity and Income Opportunities
The Trust’s Long Term Financial Plan presents a plan that assumes nil activity
increases for 2011/12 onwards. Historical experience has shown that activity has
grown at an average rate of 5% per annum over the last 5 years but acknowledging
that commissioners are operating in a restricted financial envelope, the following
opportunities are available:


Continuing to review activity case mix delivery and increase those income
generating areas that make the most significant contribution. This is currently
being linked to the Trust’s Service Line Reporting project and Specialist
Orthopaedic Alliance benchmarking work;
Continue implementation of contracting, coding and costing strategy to protect
income, and linking this into the detailed work taking place with the Specialist
Orthopaedic Alliance and DH PbR team;
Explore the opportunity to expand the Royal National Orthopaedic Hospital
brand into other Trusts, especially District General Hospitals, by developing a
‘Hub’ and ‘Spoke’ model where specialist orthopaedic facilities are limited.
105
None of these activity and income mitigations has been recognised in the current
mitigation plan, but should be considered a significant risk lever in the event of
materialising
106
Chapter 8: Leadership and workforce
This section:
8.1

Gives an overview of the management structure within the Trust

Provides pen portraits of the Trust Board

Gives an overview of current workforce information and performance indicators
as well as our workforce plans and the impact of service transformation on
staffing

Summarises current workforce issues

Outlines our workforce and OD strategy

Describes what becoming a Foundation Trust means for our workforce
Management Arrangements
The RNOH Management structure is described below (to be replaced with Visio
diagram)
Chair
Professor Anthony Goldstone CBE
Chief Executive
Non – Executive
Directors
Rob Hurd
Directors
Finance
Nursing
Jonathan
Wilson
Camilla
Wiley
Clinical Directors
Clinical
Support
Division
Dr Mike Cooper
Direct Care
Division
Mr Aresh Hashemi
– Nejad
Guy Billington
Anthony Watson
Laurence Milsted
Judith Brodie
Operations &
Transformation /
Deputy Chief
Executive
Lynn Hill
Clinical
Governance
Dr Geraldine Edge
Facilities &
Estates
Mark
Masters
Lead
Clinician
Dr Joseph Cowan
Workforce,
IM&T,
Corporate
Affairs
Dr Saroj
Patel
Spinal
Surgery
Mr Mathew Shaw
Children’s
Dr Benjamin
Imaging
Dr Muthukumar
107
Professor David
Isenberg
Services
Jacobs
Research &
Development
Professor
Alister Hart
Trust Executive Team - Structure and Responsibilities (Visio diagram to be inserted)
(To add structures of Clinical and Non-clinical Divisions)
RNOH has strong clinical and management leadership arrangements in place.
The
Board has significant clinical leadership experience amongst both Non-Executives and
Executive Directors. The Chairman has extensive Clinical Leadership and Medical
Management Experience.
Non-Executives have extensive legal, financial, business operational management,
managing significant capital programmes and property development experience, all of
which align with supporting our strategic aims and vision.
In the last three years our achievements in strengthening our leadership and
management have been considerable:
A comprehensive Board Development programme has been running for
four years tailored to supporting our strategic aims and objectives

A clinically led management model has been implemented with a New
Medical Director appointed and Clinical Directors and Clinical Leads in
place across the Trust – all with objectives that contribute towards the
strategic aims and objectives of the RNOH.

We have enhanced the RNOH’s track record of delivering high quality
care with a track record of delivery on financial and operational
performance – for example we have maintained zero MRSA and high
friends and top quartile family and family scores as well as sustained year
on year financial surpluses and delivery of access targets in a specialty
which has proved a major challenge to others nationally.

We have completed an independently assessed Board Governance
Assurance Framework with only 2 categories out of 15 rated as “red” in
November 2012 and we identified a fully achievable action plan to
address areas where we can improve further.
The Director of Workforce, IM&T and Corporate Affairs has responsibility for corporate
governance and leadership of the Foundation Trust project team.
Our Board members are all well-established in their roles and bring a wealth of
expertise to the organisation, including experience of working in Foundation Trusts.
Our Trust Chair joined the Trust in February 2011, following a successful career in the
NHS.
108
Our non-voting directors are the Director of Projects, Estates and Facilities and the
Director of Children’s Services. We do not anticipate any change to their status
following Foundation Trust authorisation. Given their remit, however, it is important that
they attend Trust Board meetings to ensure that their knowledge and experience
contribute to informed debate.
8.2
Detail of Trust Board skills gap analysis (individual and collective) move to
Section 9 and include BGAF.
In 2008 the Trust undertook a self-assessment of skills and knowledge of executive
Directors. This informed the design of development programmes for the Board.
Appraisal discussions and the setting of objectives were also informed by this selfassessment and are reviewed regularly.
The Board have met monthly in Board development sessions for over four years to
address key strategies issues such as redevelopment, Foundation Trust and service
transformation. We have also ensured that the sessions are used to update Board
members on relevant issues such as risk management, integrated governance and the
challenges and developments within the wider health economy. We ensure that board
members attend Foundation Trust Network events and conferences relevant to their
specialism or role as corporate directors.
The Board development sessions are an opportunity for an open and frank exchange
of views and idea generation. These sessions have been complemented by a Board
development programme which was designed to help us prepare for becoming a
Foundation Trust. The programme has focused on individual and team coaching, an
overview of governance responsibilities and specific knowledge-based seminars.
All executive Directors have access to coaching and are members of NHS networks
linked to their profession to ensure that they remain up-to-date on current issues and
share knowledge.
More recently we undertook another skills assessment of Board members,
complemented by feedback received through the Board Governance Assurance
Framework process which was completed in October 2012. In addition, our executive
Directors are appraised regularly by the Chief Executive and set objectives to support
the Trust’s delivery of its strategic and operational aims.
We are currently working with the Appointments Commission to recruit another Nonexecutive Director with particular experience in large-scale development projects.
8 .3
Pen Portraits of Board Members (convert to landscape, ? add as Appendix)
Insert
photograph
Name
Professor Anthony Goldstone CBE
Title
Chairman
In post since
February 2011
Trust roles
Chair: Trust Board, Service Transformation
109
Committee, Foundation Trust Programme Board,
Remuneration Committee, Children's Services
Strategy Group
Experience, skills and
qualifications
Joined the NHS in 1969.
Consultant Haematologist at University College
London Hospital (UCLH) from1976 to 2011.
Worked for UCLH in a clinical, academic and
managerial capacity initially developing the
leukaemia and transplant unit at UCLH, which is
internationally recognised.
Medical Director of UCLH from 1992 to 2000.
Central figure in the planning, redevelopment and
rebuild of the new UCLH hospital in Euston Road.
Directed the North London Cancer Network from
2000 to 2009 taking considerable responsibility for
developing and rationalising super specialist
activity and making many contacts across the
North Central London region.
Published more than 330 papers.
Appointed as a personal Chair in Haematology at
University College London in 1999.
Awarded a CBE for academic, clinical and
managerial contributions to healthcare in June
2008.
Insert
photograph
Name
Antony Watson
Title
Non-executive Director
In post since
December 2007
Trust roles
Chair: Risk Management Committee.
Co-Chair: Performance Committee.
Member: IM&T Committee, Redevelopment
Programme Board, Remuneration Committee.
Design champion for RNOH Stanmore
redevelopment.
110
Experience, skills and
qualifications
Engineering apprenticeship.
Royal Air Force Pilot and Flight Commander.
Police Officer.
Operations Director of Birmingham International
Airport PLC.
Operations Director of Hong Kong Airport
Authority.
Director of Operations Asia/Pacific - Vivid
Technologies In.
Director of Customer Services/Director of Major
Projects and Safety for Sydney Airports
Corporation Ltd.
Managing Director - Airport Operations and
Management Ltd.
Director - Aviation Investment and Management
Ltd.
Operations and general management specialist.
BA in arts, social sciences and management.
MBA.
Insert
photograph
Name
Guy Billington
Title
Non-executive Director
In post since
December 2007
Trust roles
Member: Remuneration Committee, Clinical
Governance Committee, Audit Committee,
Fundraising Committee.
Until July 2012: Member of the Regulatory Board
of the Royal Institution of Chartered Surveyors
and Chairman of its Scrutiny Panel
Experience, skills and
qualifications
2007: Retired after more than 30 years
experience as a corporate lawyer in a major city
law firm advising public company boards on major
transactions such as mergers and acquisitions,
111
listings, fund raisings and governance issues. In
addition, he was head of the firm's corporate
department with responsibility for more than 130
partners and members of staff, with responsibility
for strategy, budgets, financial performance,
partner and staff performance and client relations.
Also a member of the firm's Executive Committee
responsible for the day to day running of the firm's
global operations.
Insert
photograph
Name
Laurence Milsted
Title
Non-executive Director and Senior Independent
Director
In post since
January 2008
Trust roles
Member of Board and Performance Committee
Chair of Audit Committee
Experience, skills and
qualifications
Currently the Finance Director of a leading
international law firm with offices in London and
the world's financial centres.
Fellow of the Institute of Chartered Accountants
in England and Wales.
Prior to his existing role, he was a practising
accountant and in that capacity has had
extensive experience in a broad range of private
sector industries.
His experience includes financial management,
developing and implementing change initiatives,
governance and stewardship responsibilities,
mergers and other organisational combinations
and the conversion of an organisation's legal
status.
He supports industry training initiatives as a
faculty member for a global law firm conference
group.
Economics degree from the University of York.
He spends much of his time working on financial
issues with highly motivated but intensely busy
professionals.
112
Insert
photograph
Name
Judith Brodie
Title
Non-executive Director
In post since
April 2011
Trust roles
Member: Fundraising Committee and IM&T
Committee.
Experience, skills and
qualifications
Chief Executive, Arthritis Care.
Former Director of VSO, most recently Global
Funding and Brand Director, previously UK
Director.
Former Chief Executive of Impetus Trust, the
pioneering venture philanthropy charity.
Experience in local government and charity
sectors including social services, Age Concern
and Cancerbackup.
Previously Non-executive Director of SE London
Strategic Health Authority.
Held range of charity trustee roles including
Turning Point and a local community
development trust.
Wide ranging experience of governance,
communications and policy making.
BA (Accountancy and Mathematics), MSc (Social
Statistics), MBA (distinction).
Insert
photograph
Name
Rob Hurd
Title
Chief Executive
In post since
September 2005/August 2008
Trust roles
Chair: Redevelopment Programme Board, IM&T
Committee.
Member: Service Transformation Committee,
Foundation Trust Programme Board, Audit
Committee, Performance Committee, Risk
113
Management Committee, Clinical Governance
Committee, Fundraising Committee, Joint
Academic Committee.
Experience, skills and
qualifications
September 2005 until August 2008: Director of
Finance at the RNOH.
1992: Joined NHS on the NHS Graduate
Financial Management Training Scheme and
worked at Southampton University Hospitals.
Previously worked as Deputy Finance Director at
UCLH where he was finance lead for the wave 1
UCLH Foundation Trust application. He has
experience of leading on the financial aspects of
major capital developments including a PS30m
scheme at the Whittington and a PS422m
scheme at UCLH.
BSc (Social Science) Economics.
CPFA Qualified (Chartered Institute of Public
Finance and Accountancy).
Over two decades of experience in NHS
management at senior management level.
2008: Completed the NHS London Chief
Executive Succession Programme.
NHS experience includes financial leadership on
a successful Foundation Trust application and
two major new hospital development PFI
schemes. He has led on establishing new
hospital charities and part of his training included
a placement in a top five accountancy firm.
Chair: Specialist Orthopaedic Alliance, a
collaboration of major specialist orthopaedic
centres, which has a membership of 12 specialist
orthopaedic units from across the UK. He is
developing the RNOH's contribution to the
International Society of Orthopaedic Centres and
is developing the RNOH's contribution to the
International Society of Orthopaedic Centres.
Qualifications include: BSc (Social Science)
Economics, CPFA Qualified (Chartered Institute
of Public Finance and Accountancy).
114
Insert
photograph
Name
Professor David Isenberg
Title
Non-executive Director
In post since
June 2011
Trust roles
Chair: Joint Academic Committee.
Member: Remuneration Committee.
Experience, skills and
qualifications
Since 1991: Academic Director of Rheumatology
at UCL. He has co-authored approximately 700
scientific manuscripts and 17 books.
Since 1996: Arthritis Research UK Diamond
Jubilee Professor of Rheumatology at University
College London Medical School.
Since 2008: Chair of the Autoimmune Rheumatic
Disease clinical trials sub-committee for Arthritis
Research UK.
2004 to 2006: President of the British Society for
Rheumatology.
2006 to 2011: Chair of the British Society for
Rheumatology's Biologics Register Committee.
1998 to 2004: Chair of the Systemic Lupus
International Collaborating Clinics Group.
Chair: British Isles Lupus Group.
Member: Centre of North London Clinical Trials
Network Board.
Insert
photograph
Name
Professor Alister Hart
Title
Professor of Research and Development
In post since
July 2012
Trust roles
Professor of Orthopaedic Surgery, University
College London and RNOH
Specialist interest: revision hip surgery
Experience, skills and
Studied medicine at Caius College Cambridge
115
qualifications
(qualified 1994).
Orthopaedic SpR RNOH rotation.
Clinical Senior Lecturer and Consultant at
Imperial College Healthcare NHS Trust.
Surgical and research interests focus on the
achievement of the best possible patient and
radiological outcomes after hip and knee
replacement.
Published more than 50 papers (including
Nature); raised more than PS4 million in grants;
performed more than 3000 operations; reviewer
for six journals (including PNAS, Science and
BMJ) and four grant bodies.
Led expeditions to six continents.
Led five multi-day experiments at the Diamond
Light Source, the UK synchrotron facility.
Co-Director of the London Implant Retrieval
Centre, receiving material from 18 countries
worldwide.
Member of a worldwide clinical advisory panel to
help surgeons manage their patients with metalon-metal hip replacements.
Exhibited research with large numbers of
attendees: 60,000 at Radiological Society of
North America, 40,000 at American Academy of
Orthopaedic Surgeons, 43,000 at 350th
anniversary exhibition of the Royal Society, and
23,000 at the Science Museum's Science
Uncovered.
Insert
photograph
Name
Matthew Shaw
Title
Medical Director
In post since
August 2010
Trust roles
Member of the following Trust Board subcommittees: IM&T Committee, Clinical
Governance Committee, Risk Management
Committee, Joint Academic Committee,
Redevelopment Programme Board, Service
116
Transformation Committee, Foundation Trust
Programme Board.
Experience, skills and
qualifications
August 2010: Consultant Orthopaedic Surgeon at
the RNOH.
July 2011: Clinical Director of Spinal Surgery at
the RNOH.
May 2012: RNOH Medical Director.
Keen interest in medical education having led a
national doctors' pressure group Remedy UK.
Involvement in the NHS Future Forum and the
National Stakeholder Forum.
Member of the National Spinal Reference Group
for spinal surgery.
Mr. Shaw developed and designed a new
outcomes system for the RNOH's spinal unit in
order to benchmark the department
internationally.
Insert
photograph
Name
Dr. Saroj Patel
Title
Director of Workforce, IM&T and Corporate
Affairs
In post since
March 2005
Trust roles
Member: Information Management and
Technology Committee, Capital Planning Group,
Risk Management Committee, Clinical
Governance Committee, Imaging Committee,
Performance Committee, Foundation Trust
Programme Board, Service Transformation
Committee, Redevelopment Programme Board,
Medical Management Committee, Medical
Education Committee and Corporate Education
Committee.
Trust's Lead Director for Foundation Trust.
Experience, skills and
qualifications
2003: Joined the NHS. More than 20 years IT
industry experience in both private and public
sectors including development of ICT strategies,
programme management, process transformation
and solutions delivery.
117
Since 2005: Director of IM&T.
2009: Appointed the Trust's Senior Information
Risk Officer (SIRO).
October 2011: Appointed a Trustee of Aspire
(Spinal Injury Charity) based at Stanmore,
Middlesex.
2011: Role extended to include Workforce and
Corporate Affairs and so became a voting
member of the Trust Board.
Qualifications include: BSc Statistics and MSc
Computer Science (University of London), MBA,
Diploma in Marketing, PhD (Cranfield School of
Management) and MSP Practitioner.
Insert
photograph
Name
Mark Masters
Title
Director of Projects, Estates and Facilities
In post since
November 2003
Trust roles
Member: Risk Management Committee, Theatre
Capacity Steering Group, Corporate Social
Responsibility Committee, Redevelopment
Programme Board, Capital Planning Committee,
Decontamination Group.
Experience, skills and
qualifications
25 years management experience in estates and
facilities having worked both for the NHS and the
Private Sector.
MSc in Planning Buildings for Healthcare.
B.Eng (Honours) Degree in Building Services
Engineering.
PRINCE2 Registered Practitioner.
Chartered Engineer.
Fellow of the Institute of Healthcare Engineering
and Estate Management.
Insert
Name
Dr. Benjamin Jacobs
118
photograph
Title
Director of Children’s Services
In post since
January 2009
Trust roles
Consultant paediatrician at the RNOH since
2002.
Member: Royal College of Physicians (1988),
Children's Services Strategy Committee, Clinical
Governance Committee, Clinical Audit
Committee, Resuscitation Committee and
Safeguarding Children's Committee.
Experience, skills and
qualifications
His role at the RNOH includes: ensuring the
Trust's child protection systems are effective,
ensuring the RNOH provides paediatric services
of the highest safety and quality and providing
strategic direction for the development of the
RNOH's children's service.
1985: Qualified at the Middlesex Hospital Medical
School with credit in surgery.
Trained in paediatrics in London at the
Whittington Hospital, UCH, Great Ormond Street
and Northwick Park until 1992.
Worked as Lecturer in Child Health at the
University of Manchester, obtaining an MD in the
psychological effects of eczema in children.
1996 -1999: Fellowship in paediatrics at the
Hospital for Sick Children, Toronto.
MSc in Clinical Epidemiology.
Worked at the Royal Naval Hospital, Gibraltar
before returning to the UK.
Qualifications include: MBBS (London 1985),
DCH (London 1988), MRCPUK (London 1988),
MD (Manchester 1996), MSc (Toronto 1999).
Fellow of the Royal College of Paediatrics and
Child Health.
Insert
photograph
Name
Jonathan Wilson
119
Title
Director of Finance
In post since
January 2011
Trust roles
Member: Audit Committee, Performance
Committee, Service Transformation Committee,
Redevelopment Programme Committee,
Foundation Trust Programme Board, Risk
Management Committee, IM&T Committee.
Experience, skills and
qualifications
Previously worked as Deputy Director of Finance
and subsequently Acting Director of Finance at
Moorfields Eye Hospital.
1998: Joined the NHS on the Graduate Financial
Management Training Scheme and worked at
West Hertfordshire Hospitals NHS Trust.
BA History.
CIPFA Qualified (Chartered Institute of Public
Finance and Accountancy).
Insert
photograph
Name
Camilla Wiley
Title
Director of Nursing
In post since
August 2010
Trust roles
Co-Chair - Clinical Governance Committee.
Member - Children's Services Strategy Group,
Service Transformation Committee,
Redevelopment Programme Board, Foundation
Trust Steering Group, Audit Committee,
Performance Committee, Risk Management
Committee.
Chair - Nursing Advisory Committee.
Trust Director of Infection Prevention and Control.
Accountable Officer for Controlled Drugs.
Experience, skills and
qualifications
Qualified as Level 1 registered nurse since in
1988.
Worked in Accident and Emergency Departments
to nurse practitioner level for 13 years.
120
Worked for three years as a clinical re-designer in
conjunction with PFI partners, developing new
ways of working and related building design for a
district general hospital.
Previously worked in general management at the
Royal Marsden NHS Foundation Trust, at
Director level in the private sector and before
joining the RNOH as operational head of nursing
at the Whittington Hospital.
Chair of Conduct and Competence Panels for the
Nursing and Midwifery Council.
Gained an MBA in 2002.
Completed the King's Fund Aspiring Nurse
Director Programme in 2010.
Insert
photograph
Name
Lynn Hill
Title
Deputy Chief Executive and Director of
Operations and Service Transformation
In post since
September 2010
Trust roles
Member: Performance Committee, Risk
Management Committee, Children's Services
Committee, Service Transformation Committee,
Imaging Committee and Trust lead for
decontamination.
Experience, skills and
qualifications
Joined the NHS in 1976.
Dual qualified biomedical scientist in haematology
and clinical chemistry.
Past Chair of UK Scientific Advisory Panel for
haematology and a member of the Institute of
Biomedical Science.
Capsticks diploma in Clinical Risk and Claims
Management.
Gained the patient/public employee of the year
award for her work with Women Against Medical
Injustice at West Hertfordshire Hospitals NHS
Trust.
121
PRINCE2 foundationer.
Graduate of the King's Fund Top Managers
Programme.
Joined the RNOH from the Royal Free London
NHS Foundation Trust where she was Divisional
Director of Operations for Specialist Services.
Served on the North London Cancer Network
Board.
Chair: Patients' Participation Group for the
Abbotsbury Practice in Eastcote, Middlesex.
8.4
Current and Historic Workforce Key Performance Indicators
We have included as Appendix X a 2012 workforce profile, the main points of
which are as follows:


Ethnicity – with 62% of our staff being white/38% Black, Asian and Minority
Ethnic (BAME), we reflect the local population as determined by census data.
Like other NHS Trusts, BAME staff are currently not as well represented at
senior management levels

The age profile of staff indicates that almost half of our staff are less than 40
years of age, giving us reassurance regarding the impact of retirements

The majority of staff are female – over 73%

Length of service, over 50% have worked at the Trust for more than five years
and with over 8% working here for more than 15 years, we have a good balance
of new staff and experienced, well-established staff in the Trust
Table x
Current and Future Workforce Key Performance Indicators
Trust Revenue
%
Increase
Revenue
Staff Cost
% of Revenue
Agency
in
2009/10 ('000)
2010/11 ('000)
2011/12 ('000)
£94,370
£102,477
£106,985
-
8.6%
4.4%
£49,508
£55,422
£60,045
53%
54%
56%
£2,701
£2,643
£2,656
122
% of Revenue
Bank
% of Revenue
3%
3%
3%
£2,662
£2,867
£2,989
3%
3%
3%
Whilst we have experienced an increase in pay expenditure over the last three years,
this has been because of a steady increase in activity. We are now treating more
patients than ever before.

Table x
Sickness absence
At just over 3.25%, our sickness rate is low compared with other acute Trusts, but just
over the Trust target set for 2012/13. All Trusts in London are required to reduce
sickness absence to 3% by March 2013 and our intention is to meet this requirement.
A strengthened business partnering team in the new Workforce and Corporate Affairs
structure will enable us to ensure that managers are skilled in best practice in reducing
sickness absence. This is to be facilitated with access to up-to-date sickness data. We
will ensure that the Bradford Index model is utilised across the Trust for the
management of short-term sickness absence.
Insert table with sickness absence rates
8.5
Agency and Recruitment Arrangements
Staff cost is the single biggest expenditure in the Trust, accounting for 56% of revenue
spend in 2011/12. The total amount spend on staff has been increasing over the last
three years as the Trust has grown. This increase has been in substantive staff with
the percentage spent on bank and agency remaining constant at 1% of revenue.
The Trust has eliminated agency spend in most areas (excluding theatres) and runs a
well-established in-house temporary staffing unit which actively recruits all clinical and
non-clinical staff for bank shifts. We sometimes find it difficult to recruit highly
specialised AHPs and nurses (particularly in theatres, ITU and spinal injuries) and
Operating Department Practitioners (ODPs) for theatres but continue to use the Trust’s
good reputation as an employer and leading provider of specialist services to attract
the best applicants in the market. A regular review of bank and agency spend is
undertaken to ensure that wards and departments keep within budget and emerging
issues such as increased sickness are tackled quickly and effectively. In addition, our
weekly vacancy control panel scrutinises requests for cover/backfill, ensuring
appropriate justification for use of bank or agency staff.
We remain committed to reducing our reliance on bank and agency staff and through
our service transformation programme have established tighter controls on, and
monitoring of their use.
8.6
Recruitment Hotspots and Actions to Address
Medical staffing – recruitment and retention
Some of our clinical units are heavily reliant on small numbers of highly specialised
staff. In some cases, a clinical unit’s sustainability is dependent on one individual
123
consultant working at full capacity. To minimise the impact of this and to address the
hard-to-recruit areas, we are developing new ways of working, based on multidisciplinary principles, which will facilitate movement towards a new clinical model. For
example, we have invested in piloting the new peri-operative specialist practitioner
role, rehabilitation assistants in the Spinal Cord Injury Centre, extended scope
practitioners in physiotherapy and also introduced successfully the role of Physicians‘
Assistants in a number of clinical units. The Trust has also participated in the national
piloting of the arthroplasty practitioner.
We have not encountered problems recruiting medical staff because of the reputation
of the organisation. However, it is vital that we continue to attract the most able
medical staff, given their contribution to our work. Junior medical staff are keen to work
at the RNOH because of the range of complex and rare cases that are undertaken
here as well as giving them the chance to work alongside consultants of international
repute.
The learning opportunities available at the RNOH are reflected in the range of courses
held at our post graduate education centre. The RNOH continues to be a major
contributor to NHS education and training both internationally, nationally and
regionally. We co-ordinate and host the North East London Orthopaedic Training
Programme and train over 50 postgraduate junior doctors and over 30 undergraduate
trainees, over 100 nursing students and over 50 physiotherapy and occupational
therapy students each year. We also organise a portfolio of courses which focus on
routine procedures, complex and rare cases and advances in musculoskeletal
medicine and science and continue to provide a critical mass of high quality routine
work as part of our academic strategy.
Wider Workforce
The Trust has recently completed a programme for trainee Operating Department
Practitioner (ODPs). They worked in our theatres, as well as those of other hospitals,
whilst studying to become qualified practitioners. This programme was the result of an
extended campaign to encourage increased training provision within the academic
sector.
We will continue to consider international recruitment for ‘hard to recruit’ areas such as
in theatres and spinal surgery. We have particularly acute shortages in non-medical
staff in our anaesthetic department. We will therefore develop our work with NHS
London on commissioning ODP and anaesthetic nurse training either in partnership
with another Trust or on our own.
We have developed competency programmes to enhance career progression and use
recruitment and retention premia (RRP) as appropriate. We have also continued to
undertake recruitment drives, for example targeting agency staff in theatres.
8.7
A vision for education and training
The Trust is committed to empowering all staff to develop their skills and fulfil their
potential through education and training. The learning and development team recently
undertook a Trust-wide training needs analysis and are now developing programmes
to address the needs identified. The team aim to foster a culture of lifelong learning,
developing a clear and flexible career framework, and linking Trust plans and
124
resources for education, training and development to the organisational and wider NHS
objectives. Our training and development strategy is incorporated into the Trust’s OD
strategy and outlines our priorities for developing the management and leadership
skills of our staff.
We plan to strengthen our links with South Bank University and other universities and
are participating in the strategy development for the Local Education and Training
Boards to ensure that we maximise the opportunities that changes in education funding
and provision will bring.
We aim to attract and retain the best people who can meet the changing needs of the
hospital, as well as develop leaders from within our current workforce. The RNOH
brand is an important factor in our ability to recruit and retain staff, but our outer
London location is a challenge for us, and we also face national skill shortages in
clinical and non-clinical disciplines. These are subject to change dependent on issues
such as pay rates offered by other employers (particularly in the highly competitive
London market) and the numbers of trained people in the jobs market. Key groups
where recruitment and retention can be difficult include:

radiographers

healthcare science staff, particularly clinical physiologists

high quality administrative staff with specialist skills such as medical secretaries
We already do a great deal to make our sites attractive places to work, offering:
8.8

extensive training and development opportunities

help with caring responsibilities

help with finding accommodation including onsite accommodation, and

free or subsidised health benefits such as physiotherapy, alternative therapies,
counselling and use of ASPIRE gym and swimming pool and our own staff
swimming pool
Medical Education plans
As outlined earlier, the Trust continues to be a major contributor to NHS education and
training, both nationally and regionally.
As part of the joint academic plan, the wide range of teaching, already provided
through both the RNOH and IOMS, will be consolidated within one comprehensive
education facility. This improved facility will strengthen the relationships between
clinicians, academics and scientists acting as a base to facilitate information exchange.
Following the introduction of Modernising Medical Careers, the RNOH is developing an
orthopaedic programme which complements the competency assessments by
developing a dry bone workshop to provide specialist trainees with the facilities to
enhance their practical, hands-on skills.
125
The IOMS has established a multi-disciplinary MSc course which is developed in
collaboration with the Faculties of Biomedicine, Engineering Sciences and MAPS. The
masters course will be extended to accommodate new advances in neuromusculoskeletal science and to support the development of tomorrow’s doctors. The
existing high level of provision for higher degrees for both scientists and doctors in
training will be extended, particularly in orthopaedics through the recent programmes
for academic training fellowships and academic lectureships.
In association with the IOMS, we will continue to organise and develop national and
international orthopaedic courses and conferences aimed at all professions and multidisciplinary teams. In 2006/07 (need more recent number) we attracted over 700
external NHS staff to our events, providing an invaluable continuation of professional
development.
8.9
Impact of a change in the proportion of specialist and routine orthopaedic
work
There remains a risk for the Trust of losing core surgical trainees if we do not continue
with routine work such as hip and knee replacements as these procedures are
fundamental to junior doctors in their early stages of training. If we take the decision to
reduce the proportion of routine work, then we will endeavour to work with our
education partners to ensure that trainees have access to appropriate levels of routine
surgical procedures and training.
8.10
Overview of Workforce/Organisational Development
Following our FT consultation in 2007, we increased the proposed number of staff
governors from three to four. Our staff will be represented on the Council of Governors
by these staff governors and we will work closely with them to ensure that staff
engagement remains high. In addition, we will continue to provide opportunities for
input and feedback through project groups, open forums and other communication
channels. We are confident our relationship with the trade unions will build on this.
We will continue to provide training and support for staff to ensure that they are aware
of clinical governance issues, supported by subject experts in the Trust.
In September 2012, we completed a review of the structure of the Workforce and
Corporate Affairs directorate, resulting in some role changes necessary to ensure that
the directorate is able to support the organisation in working towards FT status and
beyond. Recruitment is almost complete and our OD strategy, being submitted to the
Trust Board in December 2012, outlines our approach to developing the staff within the
Trust as well as developing the culture of the organisation fit for the future. We are
implementing an HR business partner model which will provide a service that supports
operational managers more effectively and integrates HR professionals and processes
within our core business.
We currently offer a range of in-house training programmes for managers ranging from
HR skills to finance training and developing business cases. Through appraisal, we
identify individual needs and offer training or coaching as appropriate.
We aim to ensure that business-related skills and knowledge continue to be developed
and will support managers across the Trust to fulfil their service obligations. Current
126
learning and development projects include leadership development, customer service
and enhancing appraisal and performance management.
Members of the Workforce and Corporate Affairs directorate work closely with
colleagues implementing the service transformation programme, providing
communications and OD advice to ensure that changes, developments, as well as
savings, are understood and supported by staff across the Trust.
8.11
Evidence of Clinical Engagement
Clinical support for the Trust’s vision is driven by:

Independent acclaim for the Trust’s clinical services, model of care and patient
outcomes achieved, for example, as identified in a National Clinical Advisory
Team review

Senior clinicians are embedded in the senior management structure of the Trust
- the Medical Director, Clinical Directors, Lead Physician and Director of
Children’s Services, as well as Clinical Leads in each unit. All have agreed
objectives consistent with the Trust’s vision and corporate objectives

Within directorates, all services have a clinical lead working alongside a unit
service manager, informing the development of unit business plans including
demand and capacity projections

Medical and Clinical Directors contribute to the work of the Specialist
Orthopaedic Alliance

The Trust’s Redevelopment Clinical Working Group comprises senior clinicians
representing all areas within the Trust informing the design of clinical services in
the new hospital development
We continue to seek opportunities for clinicians to inform our future plans and have, for
a second year running, held clinically led business planning events to ensure that
business plans are informed by both operational and clinical leaders within the Trust.
8.12
Agenda for Change and partnership working
The Agenda for Change (AfC) process provides a good example of how partnership
working in the Trust was developed. The project team members drawn from HR and
staff-side worked seamlessly throughout the period of implementation, undertaking
joint communication activities and delivering the project on time and within budget. The
Trust regards its implementation of Agenda for Change as a success given that all staff
are now paid under AfC terms and conditions and assimilation targets were achieved
by December 2005. Importantly, the entire project was achieved in partnership with
staff-side colleagues, from job evaluation to policy development and introduction of the
Knowledge and Skills Framework.
8.13
European Working Time Directive (EWTD)
The Trust is currently fully compliant with EWTD requirements and in 2009 achieved
the target of reducing the working week for junior doctors to 48 hours.
127
8.14
Consultants’ Contract
The Trust began implementing the new consultants’ contract in 2003 and currently
93% of consultants are signed up to it which means that, for most of the Trust’s
consultants, there is explicit agreement between management and the consultants
around the scheduling and organisation of the consultants’ activity. We have recently
undertaken a comprehensive review of consultants’ job plans to ensure that they
accurately reflect activity and meet Trust requirements.
8.15
Electronic Staff Record (ESR)
The Trust implemented the Electronic Staff Record system (ESR), in October 2007.
The HR team reviewed ESR’s functions and revised existing processes and
documentation to enable them to maximise the potential benefits of the system. It is
clear that ESR supports the Trust in enhancing its HR practices through an improved
and consistent approach to recording data and reporting on trends. We have recently
recruited a workforce information and systems manager who will enhance our capacity
to deliver informative reports for managers to enable them to utilise and manage staff
effectively.
8.16
Relationship with Unions
The Trust enjoys a positive and productive working relationship with the unions,
meeting monthly with the Partnership Forum (PF) (formerly the Joint Staff
Management Committee (JSMC) and involving union representatives in organisational
change initiatives and policy development. The Trust will continue to consult regularly
with staff-side representatives both formally and informally. As a Foundation Trust,
trade union representatives will continue to play an essential role in promoting good
employee relations, supporting effective change management as well as learning and
development.
PF members will have an opportunity to stand as staff governors but will still have the
opportunity to work closely with management on day-to-day issues such as policy
development. Foundation Trust status will allow the Trust to further develop its culture
of encouraging discussion and dialogue at all levels in the organisation.
Examples of joint staff side/management working include promotion of appraisals, staff
survey action planning and ongoing consultation about organisational change.
Partnership working has been particularly evident through two projects, one of them
involving management and staff-side cross-Trust (with Whittington Health). Decisions
and activities were shared between management and staff-side colleagues, resulting in
greater collaboration and development of new processes.
8.17
Stakeholder Interests
Through our FT members' events, we have provided members and potential governors
with an overview of their role. We are developing an induction pack which will include
key Trust information and guidance on governor responsibilities. Once governors have
been elected, we will undertake an induction programme for them which will include a
tour of the hospital, meetings with staff and selected groups. We anticipate that
governors will play a major role in patient and public involvement activity as well as
providing input on service provision and development.
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Our communications team will work with the governors to guide and advise on effective
channels for communicating with their constituents, the public and local communities.
We are undertaking an analysis of our current membership (over 3000 members) in
order to inform a targeted membership drive if we need to establish a more
representative membership base, as well as building on strong relationships with local
community groups.
We will also work with our partner organisations to ensure that their representatives
are fully engaged and involved in RNOH activity.
8.18
Staff Engagement and Communication
Securing NHS Foundation Trust status presents many opportunities for staff at the
Trust. Whilst partnership working has been very successful at the Trust through the PF
and on-going projects, becoming members of the Foundation Trust will enable all staff
to contribute to Trust business development plans.
The proposal to have four staff governors on the Council of Governors will afford staff a
direct route to influencing the Trust’s future. Staff involvement has already been
evident in the development of the Trust’s values and through the Trust’s wellestablished team briefing process whereby staff hear about key developments and
then have an opportunity to feed back comments and questions relating to them.
Through the IWL framework, the Trust was able to enhance its communication and
staff involvement processes by reinforcing the importance of staff input across all
aspects of Trust activity. This has been demonstrated by the on-going commitment to
providing directors’ open forums (where staff can attend and ask directors about any
business issue); ensuring that directors undertake “back to the floor” activities (recent
participation has included working in pre-operative assessment, research and
development and our prosthetic rehabilitation unit). The Chief Executive hosts regular
lunches with randomly-selected staff to enable discussion in an informal setting.
Below are positive examples of how the Trust has engaged and involved staff which
will be used as the basis for developing staff involvement as the Trust embarks upon
Foundation Trust status:

Following implementation of joint action plans with staff side support, the Trust
achieved recognition as one of the Health Service Journal/Nursing Times
Healthcare Top 100 employers in 2010

Working towards IWL Practice Plus status involved staff throughout the process
through focus groups, staff involvement days as well as active participation in the
IWL working group. Pro-active staff-side representation ensured that the Trust fully
implemented its plans in relation to IWL criteria before agreeing to their inclusion
in the Trust’s IWL submission

Staff feedback was sought in the development of the Trust’s equality schemes
whereby surveys were issued and analysed and the draft schemes themselves
were circulated for comment. In 2006, the Trust was commended by the 1990
Trust for its Race Equality Scheme. Staff have also contributed to our assessment
against the requirements set out in the Equality Delivery System
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
Once the annual staff survey results are known, the Trust embarks on a series of
feedback sessions across the Trust, outlining the results but, as importantly,
seeking staff views on where and how to make improvements

Staff are encouraged to submit copy for the staff newsletter, Articulate, a
publication which regularly promotes staff-led initiatives and highlights successes
Although the Trust has a well-established process for involving staff through the
Partnership Forum, open forums, team brief and the Say So suggestion scheme, it
recognises and welcomes the opportunities that staff membership of the Foundation
Trust will bring. It will be important, however, to ensure that existing mechanisms still
work effectively and remain valued within the Trust.
8.19
Recruitment and retention for excellence
The Trust fully embraced the principles of IWL as an effective framework for good
employment and people management practice and achieved Practice Plus status in
February 2006. The Trust’s approach to IWL was to consider each element as a
fundamental basis for being a model employer and we continue to apply the principles
of communication and staff involvement, equality and diversity as outlined in IWL. We
aim to build on the IWL framework, ensuring that we maintain our high standards for
employment issues.
Equality and diversity issues were highlighted for particular praise in the Trust’s IWL
Practice Plus validation report. Staff and patient involvement in the development of
recent equality schemes ensured that action plans were based on feedback and need,
not simply as a corporate exercise. Regular monitoring of recruitment practices,
ethnicity of applicants and staff, ensure that the Diversity Working Group bases its
work on factual information and prioritises where potential problems may arise.
Following a confidential staff survey, organised nationally, we learned in July 2010 that
we had been identified as one of the top 100 healthcare employers in the UK, evidence
that the Trust’s commitment to providing an effective working environment for its staff
is recognised by staff themselves. In addition, staff commitment and motivation were
recognised in an external review as “exemplary”. We aim to build on staff loyalty to the
organisation and their passion for the services we provide by continuing to involve
them in our service development plans.
Flexible working practices are well established at the Trust with a large proportion of
staff working different work patterns. The Trust is committed to reviewing current
policies to ensure that it encourages the recruitment and retention of highly skilled and
motivated staff.
We believe that robust induction processes form the basis for an effective working
environment and to this end we have revised and streamlined local and corporate
induction processes not only for permanent staff but also bank staff. The decision to
include contractors in the staff constituency of the Foundation Trust was based on
willingness to involve everyone working at the Trust, irrespective of contractual
arrangements.
The Trust is committed to being regarded as a model employer and so we ensure that
all aspects of employment are under regular review and practices are changed or
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developed to meet emerging needs. Recruitment practices have been enhanced
through ensuring that all managers are trained before becoming involved in recruitment
and selection. Regular spot checks of recruitment practices are undertaken to ensure
that managers are following best practice and working within current legislation and
guidelines.
The Trust will continue to refine and develop these processes in the lead up to
Foundation Trust status and beyond. Plans are underway to rationalise and streamline
our current HR policies to facilitate business-led practices and recruitment/retention of
talented staff.
8.20
The Trust’s future workforce
Developing a workforce strategy
In 2008, the Workforce Strategy Group agreed that, for the purposes of developing a
documented workforce strategy, it should hold a workshop with the aim of agreeing a
set of ‘destination statements’ that would accurately summarise the type of workforce
the Trust would require in five years’ time. It was felt that these destination statements
would form the basis for a strategy that should steer all aspects of workforce
development and planning within the Trust. Moreover, they would form the basis for
the work and planning of the Trust’s HR function.
A cross section of staff representing nurses, medical staff, AHPs and managers
attended the workshop and a number of presentations were given on key issues facing
the Trust, its services and workforce over the next few years. Presentations on the
Trust’s clinical model, business plan and the potential impact of Modernising Medical
Careers were followed by discussion and brainstorming on how these issues would
affect the Trust’s workforce.
Workforce ‘destination statements’ were drafted using the notes from the workshop
and then circulated to members of the group for agreement. The final agreed
statements are as follows:
1. There will be more emphasis on a consultant-delivered service as a result of
Modernising Medical Careers although many of these consultants will be less
experienced than most consultants are today. The introduction of the EWTD
time limit of 48 hours in 2009 will mean there will be roles that cover the current
roles of Junior Doctors e.g. Night Nurse Practitioners, Extended Scope
Practitioners and Clinical Nurse Specialists who will be carrying out more
triaging, assessing, direct treatment and follow-up care. Given the changes
concerning the training of junior doctors and the impact this could have on
patient throughput, there will also be an increasing requirement for medical
fellows, possibly on rotation with other specialist orthopaedic trusts.
2. With more emphasis on integrated care, there will be more multi-disciplinary
team working with services being delivered around structured Integrated Care
Pathways (ICPs). The organisational structure will support this model of working
by aiming to reduce the rigidity of current departmental boundaries. This may
mean that structures will be more connected with service delivery than
professional or organisational groups. This will also contribute to the seamless
throughput of patients and 18-week standard of referral to treatment.
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3. To support MDT working and the new roles outlined above for doctors and other
health professionals, there will be more requirement for the use of the following
skills:
i. Management, team working, training, appraisal, feedback
ii. Technical nursing skills and, for therapists, the ability to assess
patients to find the most suitable clinical pathway
4. There will be a greater awareness and drive for productivity and efficiency with a
requirement for robust systems of measuring how value is added. Costs of
procedures will be more accurate and sophisticated, resulting in a drive to
create more generically skilled workers at a lower cost. In some cases, this will
create a blurring of professional boundaries and using shared services. As all
Trusts will have Foundation Trust status, there will be more focus on business
and commercial skills for all support staff but in particular managerial staff.
In 2012, we have developed our Workforce and OD strategy – Appendix X - (being
submitted to the December 2012 Board meeting), building on this previous work and
aiming to address the requirements of workforce changes and challenges prompted by
the LTFM.
The strengthening of our business partnering team means that we will be well placed
to support operational managers in identifying areas where savings can be made, new
roles can be developed whilst quality of care is maintained.
We will continue to strengthen our links with universities and other providers of
education for staff. This will drive forward the development of management and
leadership skills within the organisation to ensure that staff and services are managed
effectively. In addition, the training provision will be enhanced by continuing to develop
the Trust’s performance review process, thereby identifying and meeting staff
development needs. This will ensure that staff in all disciplines are given the training
and education which will not only enable them to carry out their roles effectively, but
will also meet the emerging needs of the workforce.
As part of our demand and capacity plans, we are putting in place succession plans for
our medical staff. This is important as some services are vulnerable if consultants
leave in an unplanned way. We have also built effective networks with other Trusts to
ensure appropriate cover is always available, for example we have a service level
agreement with North West London Hospitals for paediatrician cover and a
pathology/general medical service level agreement with Royal Free London.
In summary, the future workforce is likely to differ from the current workforce in the
following ways:

Revised and new roles for staff, reflecting modernised clinical practice and
integrated clinical pathways

More emphasis on a consultant-delivered service and the development of new
roles such as enhanced practitioners and clinical specialists
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
Highly specialised and advanced multi-disciplinary teams working to support the
seamless throughput of patients

Redesigned systems of working to improve productivity and, where appropriate,
accessing the use of shared services
8.21
The HR Department’s role in delivering the workforce strategy
In considering how HR would deliver the workforce strategy, we used the HR 10 High
Impact Changes framework.
As a key element of our workforce plans is to improve productivity, we aim to use these
high impact headings to facilitate the improvement of organisational efficiency as well
as improve quality and the patient experience.
Support and lead effective change management
HR will support managers to effect change e.g. through efficiency drives and
increasing productivity. They will do this through providing advice, consultation,
management information and championing excellent communication and people
management practice.
Effective recruitment, good induction and supportive management
To ensure the Trust is a model employer, HR must work towards developing and
implementing the best possible practices ranging from carefully planned induction
programmes to regular and constructive staff appraisal, including identification of
development needs, to appropriate recognition and reward, and work-life balance
initiatives.
We will continue to use the annual staff survey results to assess performance,
developing strategies to reduce turnover, tackle bullying and harassment and promote
positive behaviours, improve communication, champion flexible working options to
maximise staff retention and improve morale. These will contribute to achieving
reduced sickness absence and turnover as well as improved morale, reputation and
delivery of patient care on the ground.
Develop shared service models and effective use of IT
The HR department will continue to maximise efficiency by using e-recruitment and will
seek to capitalise on developments in cost-effective shared service arrangements as
they emerge.
The Trust’s introduction of the Electronic Staff Record system in 2007 provided a major
step forward in terms of the provision of management information across all aspects of
employment matters. In particular, the system allows much more effective tracking for
both front-line managers and HR staff of sickness absence, appraisal, turnover and
vacancies. We aim to build on this facility to provide timely information via the Trust’s
online information management system – Insight.
Manage temporary staffing costs as a major source of efficiency
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The Temporary Staffing Unit will provide well-trained bank staff (covering all staff
groups) to complement the Trust’s permanent staff and support managers to manage
their areas flexibly to meet changing service needs. Expenditure on temporary staff
has reduced over the last three years, particularly in nursing. We must ensure,
however, that we continue to reduce our reliance on temporary staff in all areas,
including medical.
We will continue to exploit efficient ways of procuring temporary staff via new national
or local framework agreements and agency projects which are designed to reduce
costs significantly.
Promoting staff health and managing sickness absence
HR will manage the Occupational Health contract, ensuring that the Trust receives a
proactive service at a competitive rate. In particular, we will be aiming to deliver a more
responsive service which supports both staff and management in addressing absence
issues.
HR will lead on initiatives that manage sickness absence effectively so that overall
levels of absence are reduced. Initiatives have already included the introduction of the
Bradford score index and specific emphasis on the management of staff on long-term
sickness absence. We have also undertaken initiatives to enhance health and
wellbeing, utilising the skills of our medical and therapy colleagues to encourage
increased activity, healthy eating and smoking cessation.
Job and service redesign
HR will support service redesign by continuing to follow Agenda for Change guidelines
and facilitating changes. This will involve working closely with managers to maximise
opportunities by developing new roles which exploit the flexibility of the pay system.
Partnership working will form an important part of this process as we involve staff and
their representatives in identifying and developing new roles.
Work on redesigning working arrangements included those for junior doctors to meet
the European Working Time Regulations in 2009. This was achieved by maximising
the potential of multi-disciplinary team working and exploring new roles for non-medical
healthcare practitioners and involved the effective rostering, scheduling of junior
medical staff and recruitment of medical fellows. These plans were closely linked to the
planning that took place in preparation for the implementation of MMC.
Appraisal policy development and implementation
HR champions the appraisal process and supports managers to develop their staff to
meet emerging needs utilising the Knowledge and Skills Framework (KSF) as a way of
identifying needs as well as designing development options to meet those needs. HR
will continue to monitor and promote appraisals with a view to increasing the take-up to
90% of all staff, a target that was achieved in 2009/10.
We will improve the effectiveness of appraisal by continuing to provide training for
managers and staff and by reviewing and following up on agreed personal
development plans. A recently launched project aims to provide enhanced training and
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online advice for both managers and staff to maximise the potential of appraisals for
achieving improved staff motivation and performance.
Staff involvement, partnership working and good employee relations
For some years the Trust has had a very strong and positive relationship with our
Trade Union and staff-side colleagues. The strength of a high level of partnership has
had real benefits for both the Trust and its staff and the maintenance and
enhancement of this relationship forms a key part of our workforce strategy.
The diversity of our staff broadly reflects the population we serve. However, in common
with other organisations both within and outside the NHS, staff from black and minority
ethnic (BAME) backgrounds are currently under represented within the higher and
professional posts and we aim to address this, for example through effective forms of
monitoring of recruitment practices and training. We have, in the past, provided
targeted management development opportunities to BAME staff, and will review
demand for such programmes as part of our diversity action planning process.
Championing good people management practices
HR will support and develop managers to enable them to manage their staff effectively
with a view to improving services. They will model good people management practices,
challenge poor performance by managers and promote the Trust values through
encouraging positive behaviours. They will also seek to develop managers’ skills in
managing people through training and management development initiatives.
Effective training and development
As outlined earlier, we will continue to:

Empower staff to develop their skills through education and training

Strengthen our links with academic institutions and engage with our Local
Education and Training Board in the coming years

Drive forward the development of management and leadership skills

Make our sites attractive places to work
8.22
Preparing to become a Foundation Trust
To meet the FT requirement that the Trust is well governed, we have invested in
supporting the Trust Board to have the appropriate capacity and skills to lead the
organisation successfully as a Foundation Trust. Experience shows that this requires a
degree of Board development both as a team, but also in the respective roles held as
Executive and Non-executive Directors, through coaching and mentoring, to ensure
that they are individually and collectively fit to lead the organisation in a Foundation
Trust environment. Our Board development programme, coaching provision and
ongoing cross-functional working aim to help us achieve this goal.
A powerful feature of Foundation Trust governance arrangements is the opportunity to
have staff representatives included as members and participating in the Council of
Governors to oversee the Board’s management of the Trust. This gives staff a real
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place at the “top table” and can provide a new impetus to staff engagement in how the
Trust delivers its services and manages its resources.
Becoming a Foundation Trust will mean that the workforce, by becoming members, will
have even more opportunity to become involved in service development and influence
decisions across the spectrum of Trust business. Plans are in place to encourage
greater openness so that staff understand and contribute effectively to the Trust’s longterm vision with an emphasis on developing frameworks which enable staff to function
together within the organisation whilst maintaining adaptability and flexibility.
We will use Foundation Trust status to support our recruitment and retention initiatives
through establishing links with our local communities and reaching a wider pool of
potential employees. We will also explore more flexible reward initiatives such as
‘recruitment and retention premia’ within the framework of Agenda for Change.
We aim to use the opportunity of becoming a Foundation Trust to develop our
communication strategies both externally and internally. Although the staff survey and
open forums are effective mechanisms to collect the views of staff, we will look to
improve the methods we use to allow for greater two-way communication between
senior management and front-line staff. We will also attempt to breakdown the silo
working that exists in some areas between departments and professions so that
information is shared appropriately across the Trust. Our external communications
strategy is under development and we are actively pursuing opportunities to raise the
Trust’s profile and further develop our brand.
8.23
Workforce plans
The Trust has a detailed workforce plan for each staffing group over the next five
years. The Trust’s Service Transformation Plan (Appendix X) gives a detailed
breakdown of how the workforce projects and projected reduction in headcount
produce financial savings without compromising service quality. Progress on each
transformation project is monitored through the Trust’s service transformation
committee.
It is important to state that underpinning the following workforce transformation plans is
the Trust’s commitment to ensuring that the quality and safety of our services is
maintained. The RNOH has a reputation as a provider of excellent clinical care and we
will ensure that any workforce change that takes place enhances this reputation and
does not compromise it. We will also be guided by our commitments to communicate,
consult and work in partnership with staff.
8.24
Service transformation projects that impact on staff
Reduce Staff Turnover by 1% a year
A yearly reduction in staff turnover will yield savings in recruitment costs and bank and
agency costs associated with covering posts, mainly in clinical areas. We will use the
ESR system and data from exit interviews to establish reasons for leaving and areas
with low retention rates and this will also inform intervention strategies. The annual
staff survey results will inform subsequent action plans and we will ensure greater
ownership of these plans from General Managers/Senior Managers/HR Advisors, in
particular around improving people management practice.
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In partnership with staff-side, we will revitalise our working within the IWL framework to
ensure best practice in employment, in particular improving the quality and
effectiveness of the appraisal process. We will also continue to utilise our probationary
period process to ensure effectiveness of recruitment.
Reduce Sickness Rate from 4% to 2%
The Trust sickness rate is already relatively low compared to most other Trusts and we
are one of only a few who have a 95%+ sickness return rate in London. To further
reduce rates we need to provide more support to managers in using the Bradford
scores. HR staff will introduce a more targeted approach with line managers to identify
and manage individuals with high sickness rates.
The Trust will support the ‘wellbeing at work’ programme through identifying key
causes of sickness and provide advice and support as appropriate. Consideration will
be given to the introduction of bonus schemes for good attendance.
A reduction in absence will reduce bank and agency costs and support the planned
reduction in WTE staff across clinical and non-clinical areas.
Aligning consultant job plans to unit business plans
We are introducing robust job planning (via e-job plan) to ensure working patterns are
aligned with clinical unit objectives and this will include the implementation of a more
co-ordinated approach to the scheduling of annual, study and professional leave.
As part of implementing plans in preparation for revalidation, we will review supporting
professional activities with a view to maximising the benefits to the service and the
generation of grant income for research projects. This will involve gathering data and
benchmarking this with other similar Trusts.
.Outsourcing of corporate functions including Finance, Procurement, HR and
IM&T to a shared service provider
The ESR system will support this and our approach will be to undertake a
comprehensive feasibility study, detailing the risks and implications of using shared
services and then introducing a phased approach to transferring transactional services
to a shared service provider. For example, we currently outsource our payroll function
to UCLH and the recruitment service is a service that particularly lends itself to being
outsourced.
Although we currently outsource our payroll services to UCLH, for general financial
services and procurement we will consider using a national provider as they are
already set up and in IM&T we already have in place arrangements for IT financial
systems support from North West London Hospitals Trust.
Introduce new roles to support productivity improvements and reduce doctors
working time
We will work with division heads and service leads to identify areas where new roles
support more efficient clinical pathways and a more cost-effective way of deploying
staff. We will identify opportunities for piloting new roles and review the benefits they
bring.
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We will use enhanced practitioners and clinical fellows to reduce the reliance on
doctors’ and consultants’ time respectively and consider introducing a nurse
practitioner role to improve cost-effectiveness of the skill mix on wards. The reduction
in junior doctors’ working time will enable the Trust to reduce the banding of doctors
from 2B to 1C making a saving of 30% of their salary between 2012/13 to 2015/16.
We successfully piloted the Productive Ward initiative and have rolled it out across the
Trust.
The introduction of new roles will realise cost savings through skill mix changes but will
not necessarily reduce WTE staffing numbers.
Theatres – reduce reliance of bank and agency staff
Reducing the reliance on bank and agency staff reduces the costs associated with
premium rates of pay but also provides an increased ability and certainty to planning
theatre capacity.
We will continue international recruitment for ‘hard to recruit’ areas such as in theatres
and spinal surgery.
Reduce non-front-line administration staff
We will complete implementation of voice recognition to ensure reduction in the
requirement of administrative staff. We will review the role and numbers of medical
secretaries/typists and introduce an internal system of digital dictation and off site
digital transcription as appropriate.
All Trust administration services will be reviewed with a view to pooling and centralising
administrative support services. The Trust’s vacancy control panel continues to
challenge requests with a view to improving productivity whilst recognising where
additional resource is needed to maintain qualify of service.
The previously stated objectives of reducing sickness and turnover will support the
reduction in WTE staff by ensuring temporary staffing is not required to cover
substantive posts.
Impact on nursing staff from reduced beds reduced length of stay and higher
bed occupancy. Using staff flexibly and changing skill mix
With the introduction of shorter stay admission wards and the increase in step down
support facilities, the Trust can reduce the number of beds overall by 26, with a
prospective reduction in the number of nursing staff required.
With a move to reducing length of stay (one or our service transformation projects) and
increasing bed occupancy rates, we have the opportunity to initiative a flexible
management process for some beds and consider closing at weekends. This will allow
these wards to only open to deal with a short term rise in demand and will support our
plans to reduce the number of nursing staff required to staff our wards.
Reducing WTE will be facilitated through a combination of natural turnover, the
recruitment of staff on contracts with flexible working patterns and change
138
management processes involving staff consultation. The introduction of rotational
nursing roles has provided additional flexibility in working patterns.
Job analysis and job design to support productivity and reduce costs
We aim to embark on a system of job analysis through methods such as interviews
with managers and staff, questionnaires, observation, critical incident investigations,
and gathering data on performance and productivity. The HR department will lead on
this and assess the suitability of current job descriptions and person specifications.
This will help in challenging existing bandings where band drift has occurred and
support the development of new roles, redeployment or the re-design and re-banding
of current posts.
The above approach will underpin and support all productivity measures introduced
within the Trust over the next 10 years. We anticipate cost savings as a result of this
but there may not be significant impact on WTE staff numbers.
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Chapter 9: Governance Arrangements
9.1 Introduction
Foundation Trusts are legally constituted as public benefit organisations. As such they are
membership organisations based on the principles of mutuality and shared ownership. All
Foundation Trusts have the same governance structure:

Membership - patients, public and staff

Council of Governors – made up of elected members from the patient, public and staff
constituencies, plus members appointed from the stakeholder organisations.

Board of Directors – appointed by the Foundation Trust.
The Chair of the Foundation Trust chairs both the Board of Directors and the Council of
Governors.
Figure x
Foundation Trust Structure
9.2 Foundation Trust Membership
As described in xxx (Section 4) RNOH is national provider and this is reflected in the structure
proposed for the the Council of Governors.
The Trust is proposing that the membership community is made up of the following
four constituencies:
1. Public
2. Patients
3. Staff
4. Partner organisations
Public Constituency
The public constituency will consist of residents from:
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
Greater London and Hertfordshire

England and Wales
Patient Constituency
The patient constituency will consist of patients or carers of patients over the age of 16.
This will ensure that service users and carers have a voice on the Council of
Governors.
Staff Constituency
The proposal is that all staff will automatically become members unless they choose to
opt out. Members of staff will be eligible to become members of the Trust if they:

Have a permanent contract of employment

Have a fixed term (temporary) contract which runs for at least 12 months

Are employed at the Trust by an independent contractor
Partner Organisations
The Trust works closely with a number of partner organisations and is proposing to
appoint the following partner organisations:
Representative of Barnet PCT (host PCT)
Representative from Harrow, Brent, Hertfordshire PCTs
Representative of one of the Specialist Commissioning Groups which commission
services from the Trust (groups may vary from time to time)
Representative of University College London
Representative of Barnet and Chase Farm NHS Trust
Representative from ASPIRE
Representative
from
University
University/Middlesex University
of
Hertfordshire/London
Proposed numbers of Governors (update after Board meeting)
Members
Number
Public
6
Patients
9
Staff
4
Partners
10
Total
29
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Southbank
During the public consultation process, the Trust held a partnership event with the
stakeholders that we would like to be involved in the future direction of the Trust to
advise them of our plans. All partnership organisations were very supportive and felt
that productive and effective links could be maintained and developed.
These partnership organisations will need to determine the selection process
themselves and then employ that process to select a governor.
The Council of Governors will be nominated from the members of the public, patients,
staff and partner organisations to reflect wider opinion and express current concerns
and issues. Their responsibilities will include appointing (and removing if necessary)
the Chair and Non-executive Directors, approving the appointment of the Chief
Executive and receiving the annual report and accounts of the Trust.
The Trust recognises the development of the role of the governors as being essential
to the success of the Foundation Trust. The Trust will ensure that the governors have a
distinct and meaningful role and will ensure that commitment and enthusiasm are
channelled positively and constructively. The Trust will provide core training and an
induction programme to develop the skills of each individual governor.
Our FT plans, strategic direction and financial assumptions have been regularly tested
with key stakeholders and commissioners, through the commissioning cycle and the
engagement activities related to redevelopment of the RNOH site and the business
case approval process. All of the key stakeholders continue to be supportive of both
our FT application and our redevelopment plans, and recognise that both are essential
to secure the long term future of the RNOH.
Members
Membership means commitment, participation and responsibility. It describes a role
and relationship where local people and service users become involved in the running
of the RNOH for the benefit of the wider community rather than for the benefit of the
individual.
Membership forms the basis of governance and accountability in a Foundation Trust.
The Trust therefore needs members to be fully engaged in order to play and active role
in shaping the future of the organisation. We also recognise that some members will
want to be more actively involved than others. This will be reflected in our
communications and involvement plan, which will describe communication with
members through different media and through a range of different formal and informal
channels, as well as developing membership specific material.
The Trust is keen to maximise the potential of its membership and aims to use the
membership to ensure that plans for service development are in keeping with the
needs of our patients and the local community.
We have already produced a members’ newsletter, regular updates and held a number
of Foundation Trust members’ events which have attracted attendance of c. 100
members each time. We already have a substantial membership base of over 3000
members (excluding staff) and have plans to further develop the membership to ensure
that it is representative of our community and patient population.
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Our membership strategy describes how we plan to use the membership and facilitate
their empowerment within a framework of accountability.
The objectives of the Trust in developing and managing an active membership are:

Develop the quality and level of participation in the Trust’s democratic structures
and processes, to enable to Trust to achieve its objectives and fulfill its statutory
obligations.

Build a membership of active, informed members who are representative of our
patients and local communities.

Encourage members to stand for election to the Council of Governors

Adopt electoral processes which encourage active participation of all members

Enable the individuals on Council of Governors to fulfill their designated roles
and responsibilities, and facilitate their full involvement.

Encourage a collaborative approach between the members, the Council of
Governors and the Trust Board
During our first year as a Foundation Trust, the management team and Council of
Governors will work together to:

Develop an induction programme for elected members of the Council

Develop terms of reference to be adopted by the Members Council

Establish a programme of involvement with the Members Council

Establish the meetings programme for the Members Council

Agree and embed the mechanisms for engagement with the Board of Directors

Review our progress towards our membership objectives e.g. overall numbers
and representation and agree further actions to progress this.

Develop a code of conduct for the membership.
During the period between the elections taking place and authorisation as a
Foundation Trust, the Council of Governors will operate in a shadow capacity and
commence taking these objectives forward with Trust.
Further detail is given in the Membership Strategy which attached to this Business
Plan as a separate document – Appendix 5 (final document only) .
9.2 Corporate Governance and Management
9.2.1 Trust Board
As an NHS Foundation Trust our Trust Board will lead the organisation and be
collectively responsible for the Trust’s performance in all areas. The executive directors
on the Board will be as follows:



Chief Executive
Director of Finance
Director of Operations & Transformation (Deputy Chief Executive)
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


Medical Director
Director of Nursing
Director of IM&T, Workforce and Corporate Affairs
As a Foundation Trust we will be strengthening the Board by increasing the number of
non-executive Directors from five to six, in order to recruit an additional non-executive
Director with property development experience. This responds to a gap in the skills and
knowledge of the Board that was identified through the Board Governance Assurance
Framework assessment. This increase in the number of non-executive Directors will
be reflected in the RNOH FT constitution. In the meantime this will be addressed
through the appointment of an associate NED.
Board Development
Prior to the introduction of the BGAF assessment into the FT process, RNOH had
planned to undertake a formal evaluation of the Trust Board during 2012. Although
this was rescheduled as a result of the introduction BGAF, some of the initial work had
been completed e.g. members of the Board have undertaken a self-assessment to of
Board effectiveness against best practice standards.
Board has been further strengthened through a series of Board development events.
For the past two years, the Trust Board has held monthly Board development
sessions, which are externally facilitated. This provides the Board with greater
opportunity to explore a range of operational and strategic issues (e.g the
implementation of service line reporting, options regarding the potential for expanding
to off site locations) outside of a formal Board meeting.
The Trust Board has reconfigured its agenda to ensure that it meets the Board's
requirements in preparation for becoming a Foundation Trust. There are now
distinctions between strategic, operational and governance issues and greater clarity
between voting and non-voting Board membership. The Trust's performance report has
been revised to ensure that it provides all information needed to give Board members a
comprehensive overview of Trust performance including financial, quality, access,
management, productivity and estates.
The Board has reviewed the information it receives against the Intelligent Board. The
outcome of this was a revision of the content and format of Board papers to make
them more comprehensive and to provide a higher level of assurance. For example,
the Board now receive an integrated performance report, the format of which is subject
to further refinement following its introduction. This is part of an on-going review of the
content and format of information presented to the Trust Board.
The Trust Board works as a unitary Board with all members having equal responsibility
for all aspects of performance - financial, quality and operational. The minutes of Board
and committee meetings confirm that the Board has a track record of appropriate
challenge, all members of the Board being actively involved in identifying priorities,
mitigating risk, developing strategy and holding each other to account.
The role of Trust Secretary has been incorporated into the HR and Corporate Affairs
role, ensuring day-to-day management of corporate governance issues as well as a
presence at Trust Board and a range of sub-committees.
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The Trust continues to develop the capability and capacity of the finance function,
identifying gaps and recruiting or developing staff to address them. The Trust
undertook a "fit for purpose" exercise in relation to the Finance department in early
2011. (This should be in the Finance section)
As part of the Board development activity and an earlier mock due diligence exercise,
the Trust has reviewed the committee structure, revised terms of reference for each
formal sub-committee of the Board and reviewed membership of each committee,
ensuring strong representation by Non-executive Directors. Appendix X provides
information about the committee structure and terms of reference
9.2.2 Trust Board and Committee Structure (diagram to be improved)
Our Trust Board leads the organisation and provides a framework of governance within
which we deliver high quality healthcare. Details of the current members of our Trust
Board are provided in Section 8.
A diagram showing the current Board committee structure and terms of reference for
each of its committees are shown in Appendix x. As indicated below three
subcommittees have been established on a time limited basis to oversee the delivery
of major programmes of work which deliver key corporate objectives for RNOH.
Board Subcommittees
Audit
Permanent Subcommittees of the Trust Board
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Performance
Risk Management
Clinical Governance
Remuneration
Joint Academic
Fundraising
Service Transformation
Redevelopment
Time limited subcommittees established to oversee the
delivery of specific programmes of work.
Foundation Trust
9.3 Board Assurance and Risk Management
Assurance framework: contains risks to corporate objectives. It ensures that the
Board is confident that existing systems, policies and people are operating effectively
in driving the delivery of objectives by focusing on minimising risk. This framework
provides the Trust with a simple yet comprehensive method for the effective and
focused management of the main risks to meeting our principal objectives. The
framework has been developed by Board members in conjunction with the Head of
Risk and is monitored and reviewed through the following mechanisms:

the framework is sent to the executive team every two months for monitoring
and review. Each director is responsible for identifying modifications that may
be required

Risk Management Committee reviews the assurance framework at all
meetings. (every eight weeks)

the Trust Board receives a copy of the document for review and approval four
times per year
Each of the principal objectives detailed within the assurance framework are linked to
the risks documented within the corporate strategic risk register. In turn these risks are
linked to the risks highlighted within each directorate risk register.
Corporate risk register: contains risks to operational objectives. This is a ‘live’
document which is populated through the Trust’s risk management process. There is a
scheme of review of the register by identified leads. The risk register provides a
comprehensive picture of all risks that affect the Trust.
Accepted risk register: when there are adequate control measures in place and the
risk has been managed as far as is considered reasonably practicable.
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Local risk registers: These are ‘live’ documents populated through local incident
reporting and risk assessments.
9.3.1 Assuring the Board
Board Assurance on quality, governance and risk is given through:











Three monthly reviews of the Board Assurance framework
Clinical Audit – a clinical audit report is submitted to the Clinical Governance
Committee bi-annually
Morbidity and mortality meetings within the clinical units report to the Clinical
Audit Committee and through to Clinical Governance Committee
Clinical Risk Outcome Panel discusses the Patient Safety Incidents and all
patient safety issues and reports to the Clinical Governance Committee three
monthly
Clinical outcomes relating to CQUINs are reported monthly to the Board, these
include pressure ulcers, patient feedback, nutrition and clinical VTE
assessments
The Patient Experience and Improvement Committee report quarterly to the
Clinical Governance Committee
Patient group visits to clinical areas, which take place monthly are reported to
the Board by a patient representative. This incorporates recommendations
made as a result of the visit and these are monitored including the actions
identified through the Clinical Governance Committee and the Patient
Experience Improvement Committee
Patient safety walk rounds, undertaken by all members of the executive team on
a rotational basis and subsequent feedback sessions to the clinical areas that
have been assessed.
Complaints are monitored through the Patient Experience Improvement
Committee on a monthly basis
Litigation is monitored through the Clinical Governance Committee and the Risk
Management Committee
Quality accounts inform the public about the quality of services the Trust
provides and these are approved by the Trust Board and are published annually
The governance reporting structure can be found on page?
9.3.2 Risk Management
The Trust Board has a duty to ensure that everyone using its premises is
protected from all foreseeable hazards/risks in so far as they may be affected
by Trust activities.
The Trust Board is committed to ensuring that risks are managed appropriately in line
with statutory, mandatory and best practice requirements. The aim of the risk
management programme is to make effective management of risk an integral part of
everyday management practice. This can be achieved if there is a comprehensive and
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cohesive risk management system in place, underpinned by clear accountability
arrangements throughout the management organisational structure. The risk
management structure will be integrated into the achievement of the Trust’s business
objectives and in turn support the organisation’s strategic plan. The aims and
objectives are developed with consideration of the assurance framework and risk
register which reflects all risks, as well as those identified through the requirements of
internal and external agendas.
Accountability arrangements (move to Risk Chapter)
The Chief Executive has overall responsibility for ensuring that effective risk
management systems are in place within the Trust, meeting all statutory requirements
and adhering to guidance issued by the Department of Health in respect of
governance. He is also accountable to the Trust Board for the implementation of the
risk management strategy and he will make the necessary arrangements to carry out
the recommendations endorsed by the Trust Board.
Through the Trust Board, Audit Committee, Performance Committee, Risk
Management Committee and the Clinical Governance Committee, the Chief Executive
is assured that effective leadership for risk management is provided and that the
strategic objectives for risk management are met.
The Trust Board is ultimately responsible for managing risk. Board members have
corporate responsibility for the management of risk and each member must be aware
of the obligations to promote this and protect the public from risk in the normal course
of events within local NHS provision. An annual risk report and quarterly updates on
the risk register and assurance framework are provided to the Board to provide
assurance that identified risks are being managed effectively.
The Chief Executive, as well as the Executive Directors with delegated responsibility,
sit on the Risk Management Committee which is the Board sub–committee responsible
for compiling the Trust risk register and has overall responsibility for prioritising and coordinating risk management issues. The Executive Team also meets on a weekly
basis, so risk management issues can be discussed as necessary.
Director of Nursing
On behalf of the Chief Executive, the Director of Nursing has delegated responsibility
for managing the strategic development and implementation of organisational risk
management, clinical and non-clinical risk and clinical governance.
Director of Finance
On behalf of the Chief Executive, the Director of Finance has delegated responsibility
for managing the strategic development and implementation of financial risk
management.
Director of Workforce, IM & T and Corporate Affairs
On behalf of the Chief Executive, the Director of Workforce, IM & T and Corporate
Affairs has delegated responsibility for corporate governance.
Head of Risk
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The Head of Risk (reporting to the Director of Nursing) is responsible for compiling and
managing the risk register as well as monitoring new developments, developing
knowledge and expertise and acting as a liaison point for risk management issues,
both within the Trust and with external bodies.
The Head of Risk monitors all initiatives and checks that they are compliant with good
risk management practice. A number of measures are used to ensure effective
monitoring such as:

audit/investigations by competent advisors

inspections

trend analysis

monitoring and review of policies and procedures

underlying causes related to poor trends identified from key performance
indicators
Risk registers are maintained through the risk management database and appropriate
individuals have access to the risk register so that they can monitor progress against
action plans.
General Managers are responsible for co-ordinating, on behalf of the Chief
Executive/Executive Directors, the activities of risk officers at ward/departmental level
and to act as their representatives for all matters relating to the management of risk.
Ward/departmental managers are responsible for managing risks relating to their staff
and the workplaces they control. They have the authority to manage risk within the
level of their competency and within the financial constraints of their ward/department.
All staff have a statutory requirement to take care, as far as possible, of their health
and safety and that of others who may be affected by their acts or omissions at work
and to act in accordance with training and instruction provided by the Trust. In addition,
contractors and agency staff must work in accordance with the health and safety
arrangements of the Trust.
9.4 Performance Management
A performance management framework has been established to ensure that the
delivery of the Trust’s vision and its associated strategic goals and objectives are
embedded in day to day Trust management.
The Trust Board has overall responsibility for approving the performance management
framework and agreeing the key performance indicators it should review to seek
assurance on Trust performance.
The role of the Performance Committee is to allow appropriate scrutiny and review to a
level of depth and detail not possible in Trust Board meetings. The Committee makes
recommendations to the Trust Board on the basis of reviewing the following areas of
the Trust’s work:
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i. Setting financial, activity and workforce business plans over the short, medium
and long-term (generally, but not exclusively, a one, three and five year planning
horizon). This includes financial, activity and workforce targets (including revenue
and capital budgets) that need to be approved by the Trust Board on an annual
basis before the start of each financial year. The liquidity and balance sheet
“health” of the Trust is also considered as part of these business plans. These
plans are set according to an agreed timetable and ensure that they support the
achievement of performance targets.
ii. Discussion of the development of future strategies and business plans.
iii. Monitoring in-year performance against the quality, financial, activity and workforce
targets agreed by the Trust Board, discussing and agreeing corrective action
where necessary. This includes cost improvement and other productivity
improvement programmes.
iv. Considering financial and performance implications of externally driven new
legislation, performance targets and guidance impacting on the Trust.
v. Overseeing and monitoring the performance review framework encompassing
monthly/quarterly performance review of clinical and corporate directorates.
vi. Overseeing and monitoring performance against the prevailing NHS performance
measurement regime. This includes discussing and agreeing recommendations
to the Trust Board for corrective action.
Activity targets and monitoring include NHS and private and both clinical and non-clinical
(e.g. research and education) and encompass NHS clinical activity access targets.
Executive Director Objectives for the year are based on and linked to the objectives
agreed by the Trust Board and monitored by the Performance Committee.
9.4.1 Performance Reviews
Directorate performance reviews take place every month. The purpose of these review
meetings is to:

Monitor directorate performance against Trust objectives and key performance
indicators through the following key themes:
o Quality of patient services including monitoring patient experience
through receiving the directorate patient experience report
o Clinical governance, research governance and information governance
o Financial performance - budget, CIPs, transformation projects, income
generation and service line reporting performance
o Workforce indicators – including performance against targeted sickness
absence, appraisal and turnover rates
o Business performance and productivity – performance against activity,
access and productivity targets
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o Review of directorate risk registers
o Review of directorate contribution to delivery of corporate projects e.g.
Redevelopment, Transformation and Foundation Trust projects.

Inform cross-directorate issues impacting on delivery performance that should
be highlighted to the executive team

Consider the Directorate’s input into key strategic imperatives e.g.
redevelopment project, Foundation Trust application and the service
transformation programme

Agree how to address key risks highlighted, and the mitigating actions required
within the Trust to address these. This includes agreement of which individuals
and groups are responsible for specific actions, the associated timescales and
the means by which assurance that the action has been carried out will be
monitored.
The chair of the directorate review reports to the Performance Committee and the
executive team and reports the conclusions drawn with respect to the key issues
discussed at each meeting.
As a Foundation Trust, we will continue to have these core committees reporting to the
Trust Board. We will review their terms of reference and composition as required to
ensure that they continue to meet the needs of the Trust.
9.5 Financial Controls and Reporting
9.5.1 Financial Controls
Content required
9.5.2 Audit
The external auditors for RNOH are Grant Thornton, who issued an unqualified opinion
of the accounts for the year ending 31 March 2012.
Key messages arising from that audit were :

The Trust has restructured its finance department and the Board needs to
monitor the performance of the function to assure itself that it is able to operate
at the standard required to achieve Foundation Trust status and that there is no
recurrence of the previous difficulties in preparing for the year end audit
process.

There is a need to continue to strengthen procedures for ensuring that income is
correctly billed to avoid the risk of year end disputes with Commissioners

The annual report should be prepared earlier in 2012-13 to enable proper
review and consideration by the Board
The internal auditors for RNOH are RSM Tenon. No adverse internal audit reports
have been issued.
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9.6 Compliance Framework
Since he introduction of the Tri-partite Formal Agreement in 2011, the performance
management of applicant Foundation Trusts has evolved to include the Accountability
Agreement and the Single Operating Model (SOM). Trust are now required to complete
the SOM return on a monthly basis, with Board discussion and sign off of quality and
governance declarations, RAG rating of performance and financial risk ratings .
This process mimics the requirements of the Compliance regime and is intended to
introduce applicant Trusts to the process of self-certification and escalation (if
required).
RNOH is forecasting a financial risk rating of 4 for 2012/13
9.7 IT Systems
Information Management and Technology
The Trust’s Information Management and Technology strategy (Appendix X) is
approved by the Trust Board and documents the direction and major goals for IM&T at
RNOH to support the Trust’s goals and objectives and fulfils the requirements of the
NHS Operating Framework. The implementation plan for the strategy (Appendix X) is
also approved. This is reported quarterly through the IM&T Committee to the Board.
The strategy is currently being refreshed and will be presented to the IM&T Committee
in January 2013 from which point an implementation plan will be developed and
reported upon. A range of developments are underway.
The key areas include:

Technology developments are constantly monitored to provide a robust, resilient
and flexible infrastructure supported by an IT service desk focussed on
delivering excellent customer service. The Trust already has secure wireless
available in all clinical areas which has been extended to provide patient and
guest access to the internet.

Continuous programme of improvement in management of information risk.

Continued support for the Trust’s service transformation programme by
delivering IM&T-underpinned business process changes to improve efficiency
and effectiveness and improve delivery of patient care. Several systems have
been delivered to support this programme. Significant management information
has been supplied, the electronic requesting system has been extended to
remove paper from processes where possible. The use has been extended to
Pathology, requests for patients To Come In, requests for Physiotherapy and
Orthotics services. The use of e-learning as a tool continues to grow as further
systems are implemented to continue to improve access to learning and
development and deliver efficiency gains.

Improved access to
business intelligence
range of information
corporate information
information and extending the delivery of our modern
system to provide flexible and easy access to a wide
to support operations and decision making through a
portal. Information sharing with clinicians will also been
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enhanced through the provision of a clinician portal which will provide access to
clinical documents, activity data, outcome data, ability to extract data for audit
and research and a coding validation tool to improve communications and
knowledge transfer between clinicians and coders. Wider and more coherent
access to information and knowledge base for patients and staff is being
delivered by enhancing both the intranet and the internet sites.
The Trust has taken full advantage of the Connecting for Health (CfH) Programme
investments. The following CfH services and applications have been implemented and
are fully integrated with Trust’s systems:

Picture Archiving and Communications System (PACS)

Order Communications and Results Reporting (OCRS) for Imaging. This has
being extended to included Therapies, Orthotics and Pathology

Choose and Book

Electronic Staff Record and Unified Identity Management

N3 connection

Implementation of Registration Authority

Radiology Information System
The Trust strategy had been to implement Cerner Millennium Care Records System
through the CfH programme. However having been informed that this option was no
longer available due to budget cuts the strategy has been revised. An appraisal was
developed to review what EPR options were available to the Trust and the conclusion
was that a “connect all” approach with the delivery of a clinical portal would be the
most cost effective for the Trust. A further detailed options appraisal for the
management of paper case-notes has also been completed.
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