Turnaround Plan Turnaround Recovery Plan 2010/11 to 2012/13

1. Turnaround PlanTurnaround Recovery Plan 2010/11 to 2012/13 Executive summary

2. Executive summary (1) • The objective of the Turnaround Plan • The objective of the Turnaround Plan is to return the Trust to financial balance, by addressing the Trust’s underlying operational and financial problems, to deliver high quality clinical services, achieve recurrent financial balance over the next three years and attain a Monitor Financial Risk Rating of 3. • Our vision for the Trust • We have a clear vision for the Trust that will be implemented as an integral part of the Turnaround process: • Our hospitals and services will be better and more efficient with patients, safety and quality at the heart of everything we do • We will offer a full range of core DGH services with a strong emphasis on improving the patient experience • The organisation will be financially viable and provide value for money through a new patient focused and clinically led divisional structure • Why is there a problem? • The Trust’s problems stem from a legacy of three inherent structural weaknesses: • a) Weak leadership : • The Trust has traditionally administered processes, rather than providing real leadership and has been unable to grasp and address problems unfolding within the organisation. • b) Inadequate systems and processes: • Poor reporting information – management information has been poor, which has hampered decision making from the Board down and across the organisation. • c) A range of governance issues, such as: • Poor planning – financial problems have appeared as a ‘surprise’ and were not anticipated as part of the planning process. • Optimistic business decision making processes – the Trust has expanded its range of services and facilities, but these have not always been connected to improving the financial position of the Trust. • How the problem has manifested itself • The problem has manifested itself in a number of ways, including: • A deteriorating financial position – the Trust is forecasting a deficit of £9.9m for 2009/10 (even after implementing a £10.3m savings plan) and deteriorating liquidity. • Governance, compliance and data quality issues – the Trust was unable to provide sufficient assurance for seven of the 44 core Standards for Better Health and is currently working with an external organisation to review its governance procedures for two of the core standards. • Other manifestations of the problem include: • Inappropriate focus of the management team. • Inefficient clinical process that have increased costs – the Trust has not implemented efficient practice such as Hospital at Night. The late implementation of changes such as EWTD have been rushed and not provided best value. • Poorly managed services that do not provide the best care for patients – the Trust was bottom of 132 Trusts on new to follow up outpatient ratios. • Overtrading and poor margins where the Trust has expanded services, but has not achieved the financial margin and surplus that other FTs have. • Excess estate, as the Trust has a large estate which is not optimally configured. There are too many beds for the level of activity that should be undertaken by the Trust which have kept costs high. • Back office functions that rely on inadequate systems and processes which need significant manual intervention. • A divisional management structure that employs too many staff compared to its more efficient peers. • Additional costs from poor investment decisions. • A lack of clinical engagement and a general inability to grasp the need to focus on efficiency and modernise clinical service delivery. • Poor relationships with commissioners, which has resulted in disputes over income that have not been promptly resolved.

3. Executive summary (2) • The Turnaround Plan • Ensures patient safety and care are a top priority for the Trust • Addresses the Trust’s structural weaknesses. • Produces break even in each year of the three year turnaround period. • Is supported by a coherent savings programme and implementation plans that deliver £51.4m savings per annum from 2012/13. • Workstreams within the Turnaround Plan: • WS1 - Clinical Service Efficiency • Patient pathway, Beds - theatres - outpatients • WS2 - Clinical Workforce Review • Workforce management • WS3 - Clinical Support Service Development • Pharmacy - Pathology - Rehabilitation - Radiology • WS4 - Back Office Consolidation • Finance - HR - IT and Procurement - Patient Records • WS5 - Estate Management and Optimisation • Rationalisation of footprint • WS6 - Data Quality & Income • Local pricing challenges - coding • What the Turnaround Plan will achieve • This plan sets out the way to turn around the Trust, making it a financially viable standalone organisation and an asset for the local health economy. • The plan releases cash savings of £110m over three years • The plan is dependent on the Trust raising transitional funding of up to £45.3m. The Trust recognises the current external constraints and is exploring a number of pragmatic options to either reduce the requirement and/or raise the funding required. • The options considered • The Trust has considered a number of factors in developing its plans: • Addressing the inherent inefficiencies internally – changing clinical practice to become more efficient and reduce costs. • Increased trading – this has been considered but rejected because of the economic climate and the Trust not being recognised by commissioners as a cutting edge service provider. • Service rationalisation and reductions – these were also considered but rejected, as the scale of income reduction was so great, it was not possible to implement a Turnaround of sufficient size within the timescales required. • One of the key constraints in considering options is the Trust’s cash position, which is weak and relies on long creditor payment periods as well as cash support from the PCT. If the Trust does not implement the Turnaround Plan to address the issue of excess costs quickly, it will not be financially viable, even taking account of PCT cash support. • The Trust has identified additional capacity within the Plan to support the execution of Turnaround , whilst maintaining day to day ‘business as usual’. The Trust will however need to raise Transitional Funding to cover the costs of implementing the plan. • The impact of these issues are that the Trust must: • Quickly address its inherent clinical and operational inefficiencies to secure its future as a standalone organisation. • Implement changes as quickly as possible in 2010 to address the Trust’s weak cash position. • When Turnaround is successfully implemented, the Trust will be in a strong position having identified and addressed foreseeable problems over the next three years.

4. Executive summary (3) • Risk • The Trust has developed an integrated approach to managing risks. The programme and plans have been evaluated using this approach and robust plans put in place to evaluate and address risks throughout the Turnaround period. • Dependencies • The Trust acknowledges there are aspects of the Turnaround that will be dependent on Commissioners and other stakeholders, most notably the need to raise transitional funding. The Trust will work with stakeholders to agree more efficient discharge processes, alternative discharge routes and other parts of care pathways to facilitate the implementation of Turnaround schemes. However, an analysis of individual turnaround schemes shows that 82% of these schemes are within the direct control of the Trust. • What a successful Turnaround will bring • The Trust’s objective is to survive and provide excellent care for patients by: • Providing safe and high quality services that comply with best practice clinical guidelines, with low mortality and low re-admission rates. • Not just meeting but beating national targets and be recognised as being amongst the best. • Making good use of taxpayer’s money, providing efficient services across our sites. • Having a smaller establishment and ensuring that employees have the right skills to deliver high quality care. • The Trust will have strong clinical leadership – doctors and nurses will be empowered to deliver all aspects of services but also be clearly accountable for their success. • We will work with commissioners, other local healthcare organisations and a range of interested community stakeholders to develop and deliver the right services for patients. The Trust is actively working with commissioners to ensure the Turnaround Plan is aligned with their proposals for service changes. • This transformation will deliver improvements to patients by: • Ensuring the Trust’s services are delivered to recognised standards of clinical best practice • Not being admitted to hospital when care can be provided on an ambulatory basis, so patients can go home straight after they have been treated • Patients spending less time in hospital and being discharged promptly as soon as they are deemed fit for discharge • Shorter waiting times in A&E in line with national targets • Patients are treated by clinical staff that have the right skills and experience to provide the best quality care for the best possible outcomes • Ensuring our hospitals are clean and the services we provide are safe • Providing best value across the organisation so we maximise the money spent on direct patient care and minimise the money spent on overheads.