NHS HEALTH AT WORK NETWORK. Draft Business Case

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1 NHS HEALTH AT WORK NETWORK Draft Business Case Involvement of Network Members in tendering for provision of the Governments Health & Work Assessment and Advisory Service Introduction This paper has been developed for the benefit of Members of the NHS Health at Work Network, who might be interested in participating in a potential bid for the proposed DWP funded Health & Work Assessment and Advisory Service. This document was first drafted in June 2013 and was discussed by members of the Network Board in July The paper will be further developed as events unfold over the next six months. Network Members who would like to register an interest in potentially being part of a group across England delivering this service are invited to contact andrew.gilbey@syngentis.co.uk. Circulation of this draft business case is limited to Network Members and Senior Managers within their host organisations. A version is being developed in conjunction with NHS Employers for the information of Trust Board members. Purpose of this paper The NHS Health at Work Network was launched in Spring 2011 and is dedicated to improving the health of NHS staff. The primary aims of the NHS Health at Work Network as set out in the Constitution are to: 1. Act as the voice of NHS occupational health providers in informing and influencing national and international policy on occupational health matters 2. Build a robust evidence base and promote best clinical and business practice in the innovative delivery of health & work services to NHS staff 3. Exchange information, expertise and best practice across the network for the purpose of developing the capacity and capability of individual network members and securing and retaining accreditation 4. Identify and pursue cross network opportunities and co-ordinate service delivery to meet customer need In April 2013, the Network published a consultation paper setting out the Board s thinking in terms of the context and priorities for the next two years. Consultation closes on 31 st May. The Consultation paper set out three proposed priorities for the next two years; 1. Promotion and influence on behalf of NHS occupational health services 2. Improving clinical quality and service delivery 3. Offering a network of NHS OH service providers to deliver national contracts NHS Health at Work Network 1 July 2013

2 For those members who wish to participate, we will develop a sub grouping within the Network as a trading association. The members of the trading association will agree the criteria for membership and operating arrangements. The trading association will work with our colleagues in Syngentis in co-ordinating and submitting bids and delivering substantial national contracts. An example of the type of bid we would wish to make is for the proposed Independent Assessment Service. This paper sets out the business case for members of the NHS Health at Work Network and their host Trusts, to choose to join in a partnership to bid for the proposed Independent Assessment and Advisory Service. Background In 2011, the Government commissioned David Frost and Dame Carol Black to take a critical look at sickness absence in Great Britain. Their report was published in 2012 and the Government in turn published its response to their report in January 2013 [Fitness for Work: The Government Response to Health at work an independent review of sickness absence]. The Government accepted virtually all of the Frost/Black recommendations including measures to improve sickness absence management, reforming the benefits systems, supporting healthcare professionals and introducing a health and work assessment and advisory service. In their Review, Dame Carol Black and David Frost called for a service that would provide healthcare professionals, employers and employees with an independent assessment of an individual s occupational health needs. The Government proposes the establishment of a health and work assessment and advisory service to make occupational health advice more readily available to employers and employees, so they can better manage sickness absence. The new service will be delivered in 2014 and will include: - a State-funded assessment by occupational health professionals for employees who are off sick for four weeks or more; - signposting to appropriate interventions including Universal Jobmatch, an online jobsearch service for those employees who are able to work, but unlikely to return to their current employer; - case management for those employees with complex needs who require ongoing support to enable their return to work. The Department for Work and Pensions is leading the commissioning of this service and has established an internal project team. We are given to understand that a specification is being developed and DWP proposes to issue invitations to tender to interested parties in summer It is proposed that the new service will launch by the end of 2014 if not from Spring [DN This section will be updated as further information becomes available] The Government expects that around 560,000 absentees will use the service every year at a cost of between million. The government also expects that the service will recommend follow up interventions and undertake case management at a total cost of between million. Context for the NHS The NHS Health at Work Network believes that the proposal to launch a Government funded Independent Assessment and Advisory Service creates a significant opportunity for the NHS. NHS Health at Work Network 2 July 2013

3 In the context of a challenging financial climate, the development presents a significant income opportunity for a share of potential business in the form of face to face assessments and the sell on of further interventions Involvement in the provision of assessment and advisory support to local employees and their employers will help build the reputation of the local NHS healthcare provider, contribute to the social responsibility agenda and support the local economy The service provision will constitute a contribution by the NHS Trust to the local public health strategy and early intervention will help to reduce the burden on acute services By providing support externally, Occupational Health teams will play more of a mainstream role in supporting the local economy, networking with primary and secondary care clinicians and bringing external income into the Trust There are around 150 NHS occupational health services in England and a further 34 Trusts have outsourced their service to the private sector. NHS Occupational health services and potentially, their private sector provider colleagues, are therefore in a unique position to deliver at least part of the Independent Assessment and Advisory Service. The NHS offers three distinct advantages; 1. Geographical reach - so that no person of working age is more than an hour from a local NHS site 2. A strong trusted brand with local populations critical in inspiring confidence amongst potential clients 3. Local connections into primary and secondary care to support on-going case management and care to support return to work The NHS is also realistic about its limitations; 1. The NHS lacks capacity and investment in terms of an IT infrastructure 2. The NHS lacks capacity to support large scale telephone assessments 3. The NHS does not have a track record of winning large Government contracts The NHS Health at Work Network is therefore exploring a potential partnership with Capita, a large private sector occupational health provider, which has strengths in the above three areas. The broad proposal is that the NHS will jointly partner in bidding to provide face to face assessment support. This business case sets out the business model and proposed commercial arrangements in the next sections. Independent Assessment Service - Business Model Delivery Model At the time of writing, the exact nature of the future IAS is unknown. It is though considered possible that the service will be delivered via a two-tier process. Tier One (T1) will receive all new referrals for individuals absent from work for over 4 weeks and provide centralised: co-ordination signposting web-based information and support telephone assessment triage to Tier Two clinical governance and care pathways T1 is anticipated to handle in the region of 560,000 referrals a year, equivalent to about 2,200 new referrals per day. It will require an organisation with exemplary systems, a large and well managed service support centre and the ability to invest potentially significant capital sums in designing and NHS Health at Work Network 3 July 2013

4 developing new telephony and IT systems, and care pathways. It is envisaged that Tier One will consist of a large multi-disciplinary contact centre, with the ability to provide telephone health assessments by appropriately qualified health professionals. Tier Two (T2) may consist of local occupational health (OH) clinicians and other health professionals such as Occupational Therapists and Physiotherapists, delivering face-to-face assessment and a report to an agreed template, back to the T1 centre. T2 sites will need to be available in every major town and city in the UK, so that no employee has to travel more than 60 minutes to attend an appointment. The strengths already alluded to in this paper identify that the potential unique role for the NHS Health at Work Network (the Network) is in delivering the T2 face-to-face assessments in England for the IAS. Telephone assessment at T1 will optimise the cost effectiveness of the business model. The likely triage rates to T2 are not known at this stage, neither is the exact number of T required to deliver the service. Activity Volumes Tables 1 and 2 below illustrate a number of possible scenarios based upon the proportion of T1 referrals being triaged to the Network s T2 service. Table 1: Business Activity Model based upon 560,000 Referrals Per Annum To Tier One Total triaged cases to Tier 2 OH providers per annum, per site [scenario based upon % of referrals triaged to T2 OH] 5% (28,000) 10% (56,000) 15% (84,000) 20% (112,000) 15 1,866 3,733 5,600 7, ,400 2,800 4,200 5, ,120 2,240 3,360 4, ,866 2,800 3, ,600 2,400 3,200 Table 2: Business Activity Model Capacity Requirements Number of Tier Two OH appointments required, per site, per week [scenario based upon Table 1 figures] 5% (28,000) 10% (56,000) 15% (84,000) 20% (112,000) Quality It is possible that the IAS specification will outline some essential quality requirements for providers of T1 and T2 services. SEQOHS accredited Network T2 sites are likely to be at an advantage in this respect. T2 sites will also need to have appropriate clinical governance and audit systems in place. Access It is possible that the IAS specification will require providers to offer enhanced access to appointments and assessments, meaning potentially extended opening hours, including evenings and weekends. NHS Health at Work Network 4 July 2013

5 Geography The IAS will cover the entire UK. The focus for the Network will be to partner with a lead party and provide the T2 OH service in England. Commercial Arrangements: The Department for Work and Pensions (DWP) are currently working up the tender specification for the IAS contract. It is possible that any future contract may follow the route taken by the DWP for awarding its Personal Independence Payments (PIP) contract, which commenced in The PIP contract was broken down into 5 regional lots as well as a single national lot to provide full national coverage in the event that the procurement decision was to award the entire contract to one provider working on a national basis. Ultimately, a number of different providers were awarded the regional lots. This approach helps to encourage innovation, mitigate contractual risk, and create competition within the provider market place. For the reasons referred to earlier in this paper, the Network does not have the resources, or the expertise, to be the lead provider for such a large-scale contract. However, the NHS is potentially well positioned to leverage its trusted brand, geographical coverage, and OH expertise, to deliver an effective face-to-face T2 service. As such, the Network will need to partner with a chosen provider that offers the best strategic fit. To help the Network facilitate this arrangement, it will work with our colleagues at Syngentis (formerly NHS Plus) to provide the business support to help to develop and negotiate our commercial arrangements. As a not for profit limited company, Syngentis will hold the contract with the chosen lead partner on behalf of the Network, and will operate on a hub and spoke basis working with any qualified Network Member. The length of the contract is not yet known, but is likely to be in the region of 3 to 5 years, with the potential for performance-related extensions. Risk In the event that the IAS contract follows the same route as the PIP contract, it is recognised that there is a degree of risk associated with partnering with one single organisation in the event of an unsuccessful bid. To mitigate this risk, Syngentis and the Network have embarked upon discussions with six of the leading OH and health assessment market providers. The choice of partner will be taken by the Network Board, who will weigh up the strengths and weaknesses of each provider to determine the best fit. There is an additional risk of direct approaches being made to Network Members by other providers, who may request exclusivity. The Network will need to communicate its plans to Members to minimise the potential risk associated with fragmentation of the Network in this way. Network Members are susceptible to rapidly changing demands upon their services by their host employer, such as responding to infectious disease outbreaks, delivering large-scale winter influenza immunisation programmes, and even occasionally covering for general hospital staff shortages. Annual cost improvement programmes exacerbate these pressures. Participation in delivering the IAS under contract has to be seen as a long-term commitment, and requires ringfenced staffing and other resources to avoid any breach of contract. To mitigate against this risk, participating Members will need to seek Trust Board approval and Chief Executive sign-off for any subsequent IAS contract. Revenue Scenarios The DWP expect the total value of the IAS contract to be in the region of 45m - 135m per annum. This is broken down as: NHS Health at Work Network 5 July 2013

6 Tier One: 25m - 50m per annum (for the central process, sickness certification, initial telephone health assessment and triage) Tier Two: 20m - 85m (for follow-up interventions and assessment) The revenue opportunity for Network Members exists at the T2 stage. The scope of contract, including the proportion of T2 interventions requiring OH assessment as opposed to other forms of mental- or physical-health support or treatment by other health professionals, is not yet known. For the purposes of revenue modelling solely for OH services, if the T2 workload split was considered to be on a 50/50 basis between OH and other health professions, the value of T2 interventions would be in the region of 10m m per annum. Whilst there are many unknown variables at this stage, Table 3 illustrates the possible OH annual values of the IAS contract based on this scenario. Table 3: Potential Annual IAS Contract Value for Occupational Health Services Per Network Member Total contract value per Tier Two site per annum [scenario based upon 50% of T2 interventions requiring OH intervention] 10m p.a. 20m p.a. 30m p.a. 42.5m p.a ,000 p.a. 1,334,000 p.a. 2,001,000 p.a. 2,833,000 p.a ,000 p.a. 1,000,000 p.a. 1,500,000 p.a. 2,125,000 p.a ,000 p.a. 800,000 p.a. 1,200,000 p.a. 1,700,000 p.a ,000 p.a. 666,000 p.a. 999,000 p.a. 1,417,000 p.a ,000 p.a. 572,000 p.a. 858,000 p.a. 1,214,000 p.a. A number of NHS Trusts may also wish to be involved in the full provision of all T2 interventions including the other forms of mental- or physical-health support or treatment by other health professionals such as Physiotherapists and Occupational Therapists. If we are to model the potential annual contract revenues to Trusts willing and able to provider 100% of T2 interventions, this is illustrated in Table 4. Table 4: Potential Annual IAS Contract Value for NHS Trusts, Per Trust Total contract value per NHS Trust per annum [scenario based upon 100% of T2 interventions being delivered by the Trust] 20m p.a. 40m p.a. 60m p.a. 85m p.a. 15 1,334,000 p.a. 2,668,000 p.a. 4,002,000 p.a. 5,666,000 p.a. 20 1,000,000 p.a. 2,000,000 p.a. 3,000,000 p.a. 4,250,000 p.a ,000 p.a. 1,600,000 p.a. 2,400,000 p.a. 3,400,000 p.a ,000 p.a. 1,332,000 p.a. 1,998,000 p.a. 2,834,000 p.a ,000 p.a. 1,144,000 p.a. 1,716,000 p.a. 2,428,000 p.a. Summary: Network Members will have to carefully consider the benefits and disadvantages of participating in delivering the IAS. It would be a long-term contractual commitment, requiring determination and continued focus to deliver the required volumes to high quality standards. In return, the financial rewards are potentially significant. NHS Health at Work Network 6 July 2013

7 Table 4: Pros and cons of participating in the IAS Advantages Disadvantages Potentially significant financial return Long-term commitment requiring dedicated resources working to challenging KPIs, under contract Secure future of internal OH service Failure to deliver could result in breach of contract Profit can be invested in OH infrastructure and May be difficult to locate and attract suitably H&WB enhancements for NHS staff qualified OH staff to deliver and sustain the service Contribution to local public health agenda Places the NHS at the heart of local and work strategy Contributes to the Trust s corporate social responsibility aims Facilitates early health intervention thereby helping reduce the need for further NHS clinical intervention Will off-set the loss of ad hoc and contractual OH income in the event that local employers dispense with their OH provision in favour of the new national IAS service Exposes OH teams to a wider and varied range of health issues across all employment sectors, enhancing their knowledge and skills May require SEQOHS accreditation Staff turnover and/or Trust demands are likely to place significant pressure on OH teams to deliver Keith Johnston and Andrew Gilbey 18 July 2013 NHS Health at Work Network 7 July 2013

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