Report by John Bogle, Acting Head of Capital and Property Planning on behalf of Malcolm Iredale, Director of Finance

Transcription

1 Highland NHS Board 7 December 2010 Item 4.7 TAIN HEALTH CENTRE OUTLINE BUSINESS CASE Report by John Bogle, Acting Head of Capital and Property Planning on behalf of Malcolm Iredale, Director of Finance The Board is asked to: Approve the attached (OBC) for the replacement of Tain Health Centre Agree that the Tain Health Centre Project Team engages with Hubco to produce a Full Business Case (FBC) for submission to NHS Highland Board in June 2011, with this work funded by capital enabling funds from Scottish Futures Trust (SFT) Approve the purchase of a site adjacent to Craighill Primary School, Tain from Highland Council funded by capital enabling funds from SFT 1 Background and Summary Tain Health Centre is not fit for purpose, it is over crowded and the current facilities do not meet modern standards. General Dental Services in Tain are provided from inadequate premises above ground floor level with no disabled access. The Mid CHP have intended providing new premises for some time but the project is not on the Board s Capital Plan. It had been intended to use a Third Party Developer to provide new premises for rent and the NHS Highland Board previously approved the OBC for this, unfortunately the new Scottish Capital Investment Manual (SCIM) had been published before the OBC was considered by Scottish Government Capital Investment Group (SGCIG), it was therefore referred back to the CHP with a recommendation that the project be considered for the hub initiative. NHSH Board approved an Initial Agreement (IA) for the project in October 2010; SGCIG also approved the IA in September Frameworks Scotland was used to appoint members of a Project Team to produce a new OBC in line with the new SCIM, funding for this work was obtained from SFT. The Board are asked to approve the OBC and agree that the Project Team engage with the new Hubco which will be established to produce an FBC for the Board meeting in June 2011 and SGCIG meeting in July The cost of this would be met from capital enabling funding from SFT. The Board is further asked to approve the use of these capital enabling funds to purchase the preferred site for the new health centre adjacent to Craighill Primary School, Tain. 2 Tain Health Centre Tain Health Centre is some 35 years old, it houses 2 GP practices and Community staff, some of the accommodation is provided from temporary portable buildings. The premises are over crowded and there are various Health & Safety concerns. The Mid CHP have recognised for some time that replacement premises were required. There is only one Dental practice in Tain and this is situated on the first and second floors of a building in the centre of town. The premises do not have the potential to become compliant in terms of DDA or the revised guidance for Decontamination compliance in Primary Care. NHS Highland Salaried Dental Service took over the lease of the premises from a GDP practice at short notice in 2005 as the practice was to close due to poor recruitment outcomes.

2 No capital funding has been identified for a replacement health centre including dental provision apart from dental fit out funding. It had been intended to provide premises using a Third Party Developer and a developer was appointed however it was not possible to demonstrate value for money or to get the project off balance sheet. Also the OBC which was prepared and approved by the NHS Highland Board was not in the required format for the new SCIM. SGCIG recommended that the scheme should be taken forward using the hub initiative. The North Territory hub is on target to come into existence in December The project team were successful in their bid to SFT for capital enabling funds of just over 1M to produce the OBC and FBC for this project and to purchase the site for the new health centre. Frameworks Scotland was used to appoint an external Project Manager, a Principal Supply Chain Partner, a Cost Advisor and a CDM Co-ordinator, all funded from the capital enabling funds. The project team also included representatives from the 2 GP Practices, Community Staff, Dental advisors and CHP managers. The IA was approved by SGCIG at their meeting on 28 September 2010 and by NHS Highland Board on 5 October If the OBC is approved Hubco will be asked to develop the project and produce an FBC for approval by the NHSH Board in June 2011 and SGCIG in July The replacement of Tain Health Centre does not appear on the Board s 5 year Capital Plan apart from 419,000 for dental fit out, therefore the preferred option is to have a revenue funded solution with the new Hubco providing a Design, Build, Finance and Maintain package. The additional revenue costs of this option are estimated to be 559,095 per annum funded by 344,356 from CHP covered through local redesign and cost improvement enabled in part by this development 147,494 from Dental, 20,000 from current funding and 127,494 from currently non cash limited GDS funding 67,245 from additional charges levied on the 2 GP practices As well as the additional non cash ltd GDS spend identified above, the pay and non pay costs associated with the additional patient services will also be funded through non cash limited GDS. Although NHS Highland is aware that cash limiting of GDS funding is planned it has no knowledge of the timescale for this. These costs are based on advice provided by SFT advisors. In discussion with Hubco detailed costs will be produced for financial close and at this point firm commitments will be required from the CHP, Dental Services and the 2 GP practices. 3 Contribution to Board Objectives A new health centre in Tain will contribute to the following Board objectives: BH.1, BH.2, BH.3, BC.2, BC.3, BC.4, BC.5, BV.1, BV.2, BV.3, BV.4, BV.5, SF.1, SF.2, SF.3, SF.4 and SF.5 4 Governance Implications Staff Governance Staff have been and will continue to be involved in the development of Business Cases and on the design of the new facility 2

3 Patient and Public Involvement Patients and public representatives have been and will continue to be involved in the development of Business Cases. Clinical Governance Clinicians have been and will continue to be involved in the development of Business Cases and on the design of the new facility. Financial Impact The emphasis of hub is on delivering quality projects as efficiently as possible; hub will be required to demonstrate value for money. 5 Risk Assessment Risk assessments have been an integral part of the process for developing the Business Case and will continue throughout the project. 6 Impact Assessment An Equality and Diversity Impact Assessment has been carried out for this project. John Bogle Acting Head of Capital and Property Planning Capital and Property Planning 26 November

4 NHS Highland Mid Highland Community Health Partnership

5 PRIMARY CARE SERVICES IN TAIN OUTLINE BUSINESS CASE CONTENTS 1 PROJECT TITLE AND PROPOSED INVESTMENT 3 2 EXECUTIVE SUMMARY 4 V7 November 2010

6 1 Project Title and Proposed Investment This summarises the planned investment in the development in Primary Care Services, in Tain. The title of the project is as follows: The proposed investment will not only address the current deficiencies in clinical services and facilities at the existing Tain Health Centre but also consider, in the longer term, rationalisation and coordination of services across the Mid-Highland locality. The existing Health Centre is over 35 years old and is in poor physical condition. It currently fails to meet modern healthcare standards, in terms of functional requirements, special needs, compliance with current clinical guidance, fire regulations and infection control measures. The accommodation is cramped throughout and is characterised by inadequate GP consulting rooms, limited community staff accommodation and overcrowded and noisy waiting areas. Furthermore, there is a significant backlog in maintenance. The plant and equipment are well beyond their design life, and hence are inefficient in terms of energy use and carbon footprint. The existing premises, both Dental and the Health Centre in Tain, are currently not fully Disability Discrimination Access (DDA) compliant. In addition it is highlighted that it is proposed that the investment consider the inclusion of new dental accommodation (4 surgeries) to replace the existing leased premises. The existing facilities (2 surgeries) fail to meet the current demand, are in poor condition, do not provide the required decontamination facilities and have poor access.

7 2 Executive Summary 2.1 Introduction The following (OBC) introduces NHS Highland s project, the Development of Primary Care Services in Tain, and provides evidence that the proposed project is affordable, deliverable and robust. The project is presented on the basis that there is a clear and long held view amongst the Tain community, Health Centre patients, GPs, dental practitioners and community care professionals that the current Health Centre and Dental facilities in Tain are inadequate. The OBC also goes on to provide clear guidance with regards to the project objectives, timescales, measurability and governance. NHS Highland presented an Initial Agreement document, the Development of Primary Care Services in Tain, to the Scottish Government Capital Investment Group (CIG) in August It received approval on the 12 th October Some of the challenges to health and wellbeing identified in NHS Scotland s publication Building a Health Service Fit for the Future (2005) are an ageing population, persistent health inequalities, a continuing shift in the pattern of disease towards long term conditions and growing number of people with multiple conditions and complex needs. To respond to these changes in population needs, the introduction of anticipatory care and the focus on reducing the rate of emergency admission will add to the demands on the local health care facility to accommodate the different types and styles of intervention. The increased space provided in a new facility will allow the introduction of an increased range of services to meet specific health needs, which are currently restricted by the space available. Services are designed and will develop to support the principal of treating patients more locally. These will cover a range of GMS Enhanced Services, Long Term Condition Management, Self Care programmes and additional Community Services such as Dental, Podiatry and Physiotherapy. The Patient s Journey would be improved by providing more locally based services utilising a team approach to care, enhancing communication between professionals and facilitating joint working. 2.2 Existing situation The Health Centre in Tain currently cannot accommodate all the requests for space, and the trend for locally based services will add to this demand. The existing Salaried Dental Service premises do not have the capacity to allow for expansion of services which would include the roll out of the national Childsmile project within the locality, which is an initiative to improve and promote oral health care. The current Tain Health Centre is grossly overcrowded and the lack of space is hindering additional services being offered. There are problems of confidentiality due to the configuration of the public

8 areas, and disabled access is poor. In summary the current health centre facilities are inadequate and improvements are required to provide the following:- A platform for sustaining and expanding clinical services, in line with the current model of primary care Facilities which allow a fully patient centred service and one stop shop for all primary care services Modern facilities and design that meet the required standard for health related infection The required focus on reducing inequalities in health set out in Better Health, Better Care. A platform for meeting satisfactory levels for attracting and retaining suitable levels and calibre of staff Facilities which have a satisfactory carbon footprint Facilities which meet the required quality standards Facilities which are flexible and adaptable Facilities that enable effective and efficient use of the CHP s resources 2.3 Dental The existing dental services supplied in Tain are inadequate in many respects. The Tain Salaried Dental team provide services from leased premises to the rear of the High Street. There is no car parking available and the accommodation is spread over the 1 st and 2 nd floors with no lift access. The NHS Highland Estates department provided an assessment which confirmed that the premises did not have the capacity to fully comply with the requirements of DDA or Decontamination. As there were no alternative premises available at the time, the decision was made to enter into a short term lease for the property. A number of minor refurbishments have been made to the premises to manage the risks associated with the accommodation in the short term. The planned dental strategic approach which is being developed aims to Maximise Access to Primary Care Dental Services, initiated June The desired outcome is that oral health inequalities in Highland will be reduced by ensuring that those with additional needs are clearly signposted into affordable, accessible, acceptable services which are appropriate to meet their individual needs, through collaborative working between all dental providers and the wider health, social and voluntary care sectors. The co-location with other health care providers will facilitate collaborative working and improve the access to dental services for those patients with additional needs.

9 2.4 Strategic Context In May 2005, the National Advisory Group on Service Change (2005) published its final report Building A Health Service Fit For The Future (also know as the 'Kerr Report'). The group set out its vision of the NHS as: "Our vision for the NHS is that it should deliver safe, high quality services that are as local as possible and as specialised as necessary. This was followed in December 2007 by Better Health, Better Care: Action Plan which stated its aim to:- "Help people to sustain and improve their health, especially in disadvantaged communities, ensuring better, local and faster access to health care" Delivering Quality in Primary Care National Action Plan: Implementing the Healthcare Quality Strategy for NHS Scotland in Primary Care was published on 19th August There were local contributions to the dialogue at the consultation event on the 24th May 2010; attended by representatives from Scottish Government, NHSH and Practioners in Dingwall. We believe that the proposals within the Tain OBC demonstrate planned improvements in the areas identified in the action plan, in particular; Improving access for patients Ensure we have in place an up-to-date, agreed suite of care pathways Continue to give priority to anticipatory care Take steps to ensure more effective partnership between the different primary care professionals NHS Highland provides strategic leadership and direction for all NHS services in the north of Scotland. It is accountable to the public and to the Scottish Government for all elements of the NHS system in Highland region and Argyll & Bute. It works with partners to improve the health of local people and the services they receive and to ensure that national clinical and service standards are delivered across the NHS system. NHS Highland is working to improve services with the involvement and support of the public, partners in other NHS Boards, Highland Council, Argyll & Bute Council and voluntary agencies. NHS Highland will continue to inform and consult local people at the earliest possible stages on developments. Situated in a large rural area, with varied geography and surrounded by several small outlying centres of population, there are particular challenges to meet the health needs of the people of the district. The strategic vision has been to develop, with our partners, particularly Highland Council, integrated services accessible in as many localities as possible. Services are being enhanced and the skill mix of staff is such that the needs of the local population can be met without the need for onward referral.

10 2.5 Background The Health Centre was built in the mid 1970s and the physical condition of the premises is of a standard that is consistent with a building over 35 years old which fails to meet modern healthcare requirements in terms of functionality, special needs, compliance with current clinicall guidance, fire regulations, DDA requirements and infection control measures. Furthermore there is a significant backlog in maintenance, and with plant and equipment at an age which is well beyond their design life, and hence inefficient in terms of its energy use and carbon footprint. The Tain Health Centre Figure 2.1: The accommodation in the Health Centre is cramped throughout and is characterised by inadequate GP consulting rooms, limited community staff accommodation and overcrowded and noisy waiting areas. Hence, the experience for patients who are receiving care in these conditions is not optimal. Similarly, staff working in the building are constantly frustrated by a lack of space and the poor functional suitability of the buildings and inevitably this impacts upon their ability to deliver effective and efficient services. The current service provided in Tain Health Centre is unable to support the required focus on reducing inequalities in health set out in Better Health, Better Care: Action Plan (2007). In recent years the expansion of primary care has resulted in new services being developed which the building has been unable to accommodate. There are also a number of services which practices and the CHP would wish to develop, in accordance with the proposed model of care in the future e.g. enhanced services under the GMS contract. These would be impossible to provide in the existing facilities. Lack of appropriate accommodation for locally based clinical services and community teams has restricted their development and not enabled these benefits to be delivered to date. The recruitment of generall practitioners, nurses, community care workers, and support

11 staff with the ability to provide the wide range of services needed in the proposed model of service provision is likely to become increasingly more difficult as the facilities become more out dated. 2.6 Service Objectives NHS Highland has a published Local Health Plan that adheres to the national format. This sets out the strategic direction for the Board, provides evidence of performance to date and plans to address the national targets, which are detailed within the Local Delivery Plan. There are 6 key objectives that form the strategic framework for NHS Highland. To continue to improve the health of people in the Highlands and to reduce the inequalities in health between different sections of our community. To reduce the time people wait to receive services. To reduce, to an absolute minimum, the chance of acquiring an infection whilst receiving health care and to ensure our hospitals, clinics and surgeries are clean. To ensure services delivered are high quality and clinically effective through robust outcomes evaluation. To treat people with chronic conditions sooner, near to home and earlier in the course of their disease. To deliver our programme of service modernisation. 2.7 Case for Change The aim of the project is to both overcome the shortcomings of the current environment and facilitate and enable changes in service provision to meet the specific needs of the local population. At the same time this will also improve the working environment of the staff and GPs. Local and national drivers were reviewed to ensure these were appropriately identified and addressed where possible. The work on this aspect of the project was based on understanding the implications of four major drivers for change: The Health Policy Agenda: which requires quicker, more flexible access to treatment, a greater emphasis on primary care, ill health prevention, health promotion, integration of health and social care and changing roles of healthcare professionals. New technologies; changing clinical practice, internet, telecommunication and IT advances. Changes in society; meeting the demographic changes including the ageing population.

12 The future patient; what does the patient need, want and expect. o o o Quicker and more flexible access to treatment. Good quality relationships with health professionals. Better and more information about treatments, choice etc. 2.8 Critical Success Factors The key stakeholders have undertaken a review of the Investment Objectives and potential benefits, identifying the following list of Critical Success Factors: 1. The achievement of the project within the available affordability envelope for NHS Highland (revenue funding) 2. Deliver facilities that enable clinical effectiveness to be delivered, in terms of improving health in the catchment area and assisting Mid Highland CHP in meeting health targets 3. Deliver facilities that enable the existing and currently planned enhancement to clinical services to be delivered 4. Compliance with all relevant Health Guidance (unless otherwise agreed as being inappropriate) including HAIScribe guidance to ensure facilities are commensurate with current policy and reduce the risk of health related infection spread 5. Avoid any significant disruption to existing clinical services in the locality. 6. Quality Delivery of key stakeholders expectations (where these match the brief) is critical to the success of the project. AEDET reviews will be undertaken and will achieve a minimum target score of 4/6 in all categories. 7. Sustainability. The achievement of BREEAM Healthcare Excellent for new build or Very Good for refurbishment development is critical to the project success. 8. Achieve improved efficiency associated with the whole life costs of the building. 9. Integration of dental services 10. Improve the patients journey by proving a one stop shop.

13 2.9 Summary of Short listed Options The short list of feasible options for the project is summarised as follows: Option 1: Do nothing Option 2; A & B New Build Using a Central nucleus model. Scoping Option - Existing catchment area and services Service solution: Existing Model In accordance with Scottish Capital Investment Manual (SCIM) guidance, this option is included only as a baseline against which the other options can be compared. It is based on an assumption that the existing property will remain, and some investment will be made to enable it to continue to support service delivery. Improvements will be required to achieve BREEAM very good rating. The assumption is that issues such as backlog maintenance and poor condition and performance of property would be addressed, where it is economically viable to do so. The size of the building would remain as it is. Service Delivery In-house Implementation maintenance and improvements to sustain building Funding NHS Capital/Revenue funding costs for repairs, improvements and maintenance Scoping Option Extend catchment area, where possible, for selected clinical services through rationalisation from other premises Service Solution Central nucleus model.this option is based on a theme of centralising services and bringing services and people together under one roof. It is a broadly similar model to that which is currently employed at Tain Health Centre but with further integration and expansion of services including dental, within a new build facility. An option based on the theme of providing an integrated building, bringing together a range of health, social and community services across Tain. Service Delivery In-house Implementation Single project to completion Funding via transfer to hub There are 2 new build sites potentially available; Option 2A is the school site located on Craighill Terrace. Option 2B is the retail site located at the South East edge of the town.

14 Option 3: More of the same Refurb and extend. Scoping Option Existing catchment area Service solution More of the Same Model. This option would seek to retain and invest in what is good now, building on the strengths of the existing models of service and premises provision. Service Delivery In-house Implementation Decant to allow construction phase. This option would largely rely on the existing site and location to deliver future services with an extension to the existing building to create additional space. The implementation of this option would be undertaken as one initial phase of construction with no incremental maintenance work envisaged. A temporary decant of the facility would be required in order to allow this option to proceed. Funding NHS Capital/Revenue/hub funding based on traditional procurement Option 4: Network Model Scoping Option - Existing catchment area and integration with other health and social care services with the Tain locality Service solution: Network Model. This option emerged from the workshops sessions as a response to the requirement to provide a flexible and dynamic model of service and property provision. Its underlying theme is to provide the widest possible range of services locally as is practical and commensurate with safe clinical practice. Hence, it envisages similar service development as in Option 2: Central nucleus model, but seeks to distribute those services across a portfolio of properties in Tain. Service Delivery In-house Implementation Phase services in utilising rented, additional serviced space. Funding NHS Capital/Revenue funding for any new build/refurbishment and smaller projects in connection with developing facilities within the network. Table: 2.1

15 2.10 The Preferred Option The preferred option to emerge from the option appraisal exercise was No 2A: the New Build solution on the school site based on a Central nucleus Model of service provision. This option is based on a model of service provision that is similar to that currently employed, but seeks to further integrate services such as dental and has the potential to significantly improve patient care. It would make Tain Health Centre the central focal point for primary care services in the district, rationalising the existing NHS leased and owned properties in Tain. It would lead to the co-location of multi-disciplinary health care teams and dental practitioner services. This model is further complemented by the inclusion of Community Care staff and the potential inclusion of social work into the Health Centre. The option appraisal exercise demonstrated that this option was most likely to maximise the non financial benefits from the project and is comparatively low in terms of risks. It also demonstrated that the option is most likely to meet the increasing health and dental care needs of people living in and around Tain Results of economic and financial appraisal/s The following tables are expanded upon fully within this document and provide a summary of the economic and financial appraisals that have been undertaken to validate the delivery options. The initial capital cost estimates for the options short-listed are detailed as follows: Initial Capital Cost Estimates. Option Initial Capital Cost Estimate Option 1 Do Nothing No capital cost Option 2a New Build School Site 5.7m to 6.3m Option 2b New Build Retail Centre 5.8m to 6.4m Option 3 Refurbishment 7.6m to 8m Option 4 Network Model Revenue solution Table 2.2

16 The table below sets out the forecast revenue impact and running costs for the short listed options: It should be noted the additional recurring revenue funding required in option 2A, is 559,094 and is broken down as follows: Dental 147,494 (from non cash limited GDS), Tain GP 's 67,245 and the Mid Highland CHP (RCWN Locality) 344,356. Forecast Revenue Impact 25 year Life Cycle Do Nothing New Build School site New Build Retail Centre Refurbishment Network Model Appraisal Element Option 1 Option 2a Option 2b Option 3 Option 4 Capital charge 23, Unitary charge 468, , , ,504 Running costs 58, , , , ,885 Total Revenue costs 81, , , ,353 1,135,389 To be Funded as Follows Budgets in Mid CHP -81, , , , ,355 Additional Revenue Funding required Financed by: 0 559, , ,596 1,006,034 Additional Income from Dental -147, , , ,631 Additional Income from Practices -67,245-67,245-84,334-53,932 Additional funding from R&CWN Locality -344, , , ,471 Balance Table 2.3

17 The table below shows the analysis for the short listed options. VfM Analysis 25 year Life Cycle Do Nothing 1 New Build School Site, 2A New Build Retail Centre, 2B Refurbishm ent, 3 Network Model, 4 Appraisal Element Option 1 Option 2a Option 2b Option 3 Option 4 Benefit Score a Rank Net Present Cost b 3,911,320 4,865,635 4,865,635 6,558,047 9,010,481 Cost per benefit point b/a 15,900 5,684 5,891 11,172 43,320 Rank Risk c , Risk % (out of a 150 d 0% 383% 420% 828% 661% max) Rank Risk adjusted Cost per Benefit point b/a x d 21,774 24,733 92, ,487 Rank Table Outcome The results of the Economic and Financial Analysis consolidate the position of Option 2A New Build as the preferred option, alongside that of the non-financial benefits We have used the HM Treasury Model to demonstrate Value for Money. The table below shows the result of comparing the Scottish Futures Trust hubco model against a Public Sector Comparator. Using an IRR of 13%, gives an indicative PFI VfM of 5.46%, which complies with the requirements.

18 Public Sector hubco VfM Quantitative Assessment Option 2A. VfM analysis for option 2A IRRs 13% Pre Tax Equity IRR 13.01% VfM Other Values Pre Tax Project IRR 7.48% "Indicative" PFI VfM 5.46% CP Costs (NPV) -7 PFI Costs (NPV) -7 Unadjusted Annual Unitary Charge 0.4 Table Benefits Realisation The Benefits Criteria articulated in this document are all desirable outcomes for the project that can be achieved by the Preferred Solution (Option 2 New Build ). In summary, it is anticipated that the following benefits will be realised as a result of the proposed Investment. The achievement of the project within the available affordability envelope for NHS Highland revenue funding. Deliver facilities that enable clinical effectiveness to be delivered, in terms of improving health in the catchment area and assisting Mid Highland CHP in meeting health targets. Expanded range of services and promotion of a preventative and self care model Provision of a patient centred one stop shop The enhancement of new ways of working, in particular effective collaborative/ partnership working Provision of facilities which significantly reduce risk of spread of infection Provision of easy and equitable access to nearby services

19 Address health inequalities Retention and recruitment of staff Enhance the sustainability of built facilities within the locality whilst also promoting alternative forms of transport Improve quality and functional efficiency of physical environment Provision of a flexible and adaptable property which allows delivery of NHS Highland s overall Strategic plans 2.14 Summary of Key Dates A summary of the estimated key project dates is provided in the table below: Project Phases Stage 2: Consideration of OBC December 2010 Stage 3: Submission of FBC June 2011 Stage 4: Start on site September 2011 Completion date October 2012 Services Commencement October 2012 Table Scottish Capital Investment Manual (SCIM) Compliance This OBC has been prepared in accordance with the requirements of the Scottish Capital Investment Manual and presents the programme s objectives, benefits, risks, costs and other relevant information.