Wirral University Teaching Hospital NHS Foundation Trust

Wirral University Teaching Hospital NHS Foundation Trust Use of Resources assessment report Arrowe Park Hospital Arrowe Park Road Upton Wirral CH49 5PE Tel: 0151 678 5111 www.wuth.nhs.uk Date of publication: 13 July 2018 This report describes our judgement of the Use of Resources and our combined rating for quality and resources for the trust. Ratings Overall quality rating for this trust Are services safe? Are services effective? Are services caring? Are services responsive? Are services well-led? Requires improvement Requires improvement Requires improvement Good Requires improvement Inadequate Our overall quality rating combines our five trust-level quality ratings of safe, effective, caring, responsive and well-led. These ratings are based on what we found when we inspected, and other information available to us. You can find information about these ratings in our inspection report for this trust and in the related evidence appendix. (See www.cqc.org.uk/provider/wirraluniversityteachinghospitalnhsfoundationtrust/reports) Are resources used productively? Requires improvement Combined rating for quality and use of resources Requires improvement Page 1 of 15

We award the Use of Resources rating based on an assessment carried out by NHS Improvement. Our combined rating for Quality and Use of Resources summarises the performance of the trust taking into account the quality of services as well as the trust s productivity and sustainability. This rating combines our five trust-level quality ratings of safe, effective, caring, responsive and well-led with the Use of Resources rating. Use of Resources assessment and rating NHS Improvement are currently planning to assess all non-specialist acute NHS trusts and foundation trusts for their Use of Resources assessments. The aim of the assessment is to improve understanding of how productively trusts are using their resources to provide high quality and sustainable care for patients. The assessment includes an analysis of trust performance against a selection of initial metrics, using local intelligence, and other evidence. This analysis is followed by a qualitative assessment by a team from NHS Improvement during a one-day site visit to the trust. Combined rating for Quality and Use of Resources Our combined rating for Quality and Use of Resources is awarded by combining our five trust-level quality ratings of safe, effective, caring, responsive and well-led with the Use of Resources rating, using the ratings principles included in our guidance for NHS trusts. This is the first time that we have awarded a combined rating for Quality and Use of Resources at this trust. The combined rating for Quality and Use of Resources for this trust was requires improvement, because: There was an unstable executive leadership team with a significant turnover of senior leaders. The trust was not fully compliant with the fit and proper person requirements as not all appropriate checks had been completed on directors and non-executive directors. Although there was a trust governance structure in place the arrangements did not always operate effectively. The risk management system was applied inconsistently throughout services and risk registers and action plans were not always reviewed in a timely way. Information used in reporting, performance management and delivering quality care was not always accurate or reliable. Not all services had a clear vision for what it wanted to achieve and did not always have workable plans to make improvements. There was not always a positive culture that supported and valued staff, creating a sense of common purpose based on shared values. Not all services provided enough staff with the right qualifications, skills, training and experience to keep people safe from avoidable harm and to provide the right care and treatment. The trust had not always managed patient safety incidents well. There were times when areas were being used which were not always appropriate. In the emergency department patient risk assessments for falls and pressure ulcers had not been completed in line with trust policy and best practice guidance. Access and flow throughout the hospital remained a challenge for the trust. There were safeguarding processes in place to protect people from abuse, however these were not always effective. We had concerns that some patients who required restrictions in place to keep them safe were potentially being deprived of their liberty without lawful authority. The trust had recognised the need for improvement and were beginning to put plans in place. There were concerns and recommendations detailed in the use of resources report. Page 2 of 15

Ratings tables Ratings Inadequate Key to tables Requires improvement Good Outstanding Rating change since last inspection Same Up one rating Up two ratings Down one rating Down two ratings Symbol * Month Year = date key question inspected * Where there is no symbol showing how a rating has changed, it means either that: we have not inspected this aspect of the service before or we have not inspected it this time or changes to how we inspect make comparisons with a previous inspection unreliable. Ratings for the whole trust Page 3 of 15

Wirral University Teaching Hospital NHS Foundation Trust Use of Resources assessment report ADDRESS: Arrowe Park Hospital, Arrowe Park Road, Upton, Wirral, CH49 5PE Tel: 0151 678 5111 www.wuth.nhs.uk Date of site visit: 5 April 2018 Date of NHS publication: This report describes NHS Improvement s assessment of how effectively this trust uses its resources. It is based on a combination of data on the trust s performance over the previous 12 months, our local intelligence, the trust s commentary on its performance, and qualitative evidence collected during a site visit comprised of a series of structured conversations with the trust's leadership team. Proposed rating for this trust Requires improvement How we carried out this assessment The aim of Use of Resources assessments is to understand how effectively providers are using their resources to provide high quality, efficient and sustainable care for patients. The assessment team has, according to the published framework, examined the trust s performance against a set of initial metrics alongside local intelligence from NHS Improvement s day-to-day interactions with the trust, and the trust s own commentary of its performance. The team conducted a dedicated site visit to engage with key staff using agreed key lines of enquiry (KLOEs) and prompts in the areas of clinical services; people; clinical support services; corporate services, procurement, estates and facilities; and finance. All KLOEs, initial metrics and prompts can be found in the Use of Resources assessment framework. We visited the trust on 5 April 2018 and met the trust s executive team (including the chief executive), a non-executive director and relevant senior management responsible for the areas under this assessment s KLOEs. Summary of findings Page 4 of 15

Is the trust using its resources productively to maximise patient benefit? Requires improvement We rated use of resources as requires improvement because the trust is not consistently making best use of its resources to enable it to provide high quality, efficient and sustainable care for patients: The trust spends less on pay and other goods and services per weighted unit of activity (WAU) than most other trusts nationally at 3,289 per WAU vs national median of 3,484. This indicates that the trust is more productive at delivering services than other trusts by showing that, on average, the trust spends less to deliver the same number of services. In 2016/17, the trust reported a deficit of 10.5m against a control total of a 328k surplus excluding Sustainability and Transformation Fund (STF). The trust reported a deficit of 10.5m for 2016/17 (excluding STF), which was 10.8m worse than planned. The trust received 6.9m STF. As of the third quarter of 2017/18, the trust is off track to achieve its control total of a deficit of 9.3m in 2017/18, with a year-end deficit of 22.7m (6.9% of turnover, excludes STF). The trust is reliant on external loans to meet its financial obligations and deliver its services. Overall pay cost per WAU was 2,269 for 2016/17, compared with a national median of 2,157, placing it above national average. Band 5 nurse s sickness levels are currently at 13%. The trust has introduced a range of initiatives to improve the health and well-being of staff. The trust is not meeting the constitutional operational performance standards for Referral to Treatment (RTT) at 77.7% and the trust has not achieved the 4 hour A&E standard for 2016/17 and 2017/18. More patients are coming into hospital on the day prior to treatment compared to most other hospitals in England. The trust commented this can be for clinical reasons but it can also have a detrimental effect on the patient and adversely affect occupancy rates. The Did Not Attend (DNA) rate for the trust is high at 8.2% for the 12 month period ending September 2017 compared to the national median of 7%. However: The trust met its agency ceiling as set by NHS Improvement for the period April 2017 to January 2018. The trust has introduced new roles such as advanced clinical practitioners across the workforce that will challenge the traditional medical models. Patients are less likely to require additional medical treatment for the same condition at the trust compared to other trusts. The trusts readmission rate is 7.82% The trust reports a delayed transfers of care (DTOC) rate of 1.7%, this is well within the national target of less than 3.5% The trust is meeting the constitutional standards for 2 week, 31 day and 62 day Cancer Waiting Time Standards. Table 1 shows performance at April 2018. Page 5 of 15

Standard Description Standard Standard Achieved 2 weeks from GP Referral to first appointment 93% 96% 2 weeks from referral for breast symptoms 93% 94% *31 days from decision to treat to first treatment (all cancers) *31 days from decision to treat to second or subsequent treatment (surgery or radiotherapy) *31 days from decision to treat to second or subsequent treatment (drug therapy) 62 days from urgent GP referral for suspected cancer to first treatment 62 days from screening programme referral for suspected cancer to first treatment *February 2018 96% 98.2% 94% 100% 98% 100% 85% 87.9% 90% 100% Individual areas where the trust s productivity compared particularly well included all the pharmacy and medicine optimisation benchmarks, for example: Medicines cost per WAU is 279 and below the national median of 320. Delivery 122% of Top 10 medicines savings (Year to date YTD January 2018). Medicines stock holding days at 8.0 compared with the national median of 18.8. YTD the trust has met its planned medicines expenditure of 23.9m with underspend of 3.8m. YTD Medicines and Pharmacy Cost Improvement Programmes (CIPs) planned for 330k in savings, with 397k saved to date. For pathology the overall cost per test for the trust is 1.62 against a national median of 1.91. How well is the trust using its resources to provide clinical services that operate as productively as possible and thereby maximise patient benefit? Performance on achieving constitutional standards, re-admission rates and delayed transfers of care suggest the trust isn t using its resources to provide clinical services as productively as possible. At the time of the assessment in April 2018, the trust was not meeting the constitutional operational performance standards for Referral to Treatment (RTT) at 77.7%. In response to this the trust has received support from the NHS Intensive Support Team for RTT and together an action plan for improvement is being enacted. The trust has not achieved the 4 hour A&E standard for 2016/17 and 2017/18. During the first 3 quarters of 2017/18, performance was in the range of 81% - 83.9%. For January 2018 performance was 78.4%. The trust has received improvement support from the Emergency Care Intensive Support Team, Ernst & Young and NHS Improvement. The trust noted the result has been to move performance to consistently 85%. A Wirral Healthcare System A&E Page 6 of 15

Improvement Plan is in place and monitored via the A&E Delivery Board. At 7.82%, emergency readmission rates are better than the national median of 9% as at September 2017. This means patients are less likely to require additional medical treatment for the same condition at the trust compared to other trusts. The acute medical team are reviewing how this can be reduced further. The trust reports delayed transfers of care (DTOC) rate of 1.7%. DTOC rates have been improving since June 2017. The trust noted this low rate is due to the introduction of services such as Discharge to Assess which enables a patient to be discharged home for assessment of the future needs. The rate of pre-procedure elective bed days at the trust is 1.89 days, compared to the national median of 0.13 days. The rate of pre-procedure non-elective bed days, at the trust is 1.09 days, compared to the national median of 0.78 days. This means a patient admitted as an emergency will wait longer than at most trusts before treatment. The trust informed us it is addressing this though a programme to improve the care and efficiency in elective and nonelective care. The Did Not Attend (DNA) rate for the trust is high at 8.2% for the 12 month period ending September 2017, compared to the national median of 7%. The trust noted there is work underway to understand this further and this work will continue based on data in the Model Hospital and the Getting it Right First Time (GiRFT) Programme with good engagement from the clinical teams. How effectively is the trust using its workforce to maximise patient benefit and provide high quality care? The trust has identified areas in which it can improve the effective utilisation of its workforce and has plans to do so. For 2016/17 the trust had an overall pay cost per Weighted Activity Unit (WAU) of 2,269, compared with a national median of 2,157, placing it above average nationally. This means that it spends more on staff per unit of activity than most trusts. At the time of the assessment the trusts Allied Health Professionals (AHPs) staff cost per WAU was 124 and the Medical staffing cost per WAU was 485, placing it in the second lowest (best) quartile and below the national median for both. However, the trust is in the highest (worst) quartile for nursing staff cost per WAU ( 811, with a national median of 718). The trust has identified that there are areas they need to investigate further to ensure maximum benefit to patients through managing workforce costs. This includes identifying were costs for doctors in training lie and how nursing staff s health and wellbeing can be maintained to reduce sickness absence. Greater efficiency could be gained from the sharing of infrastructure services with other trusts such as corporate services, administration and estates staff. The trust met its agency ceiling as set by NHS Improvement for the period April 2017 to January 2018, with the exception of August when costs were above ceiling. The trust is forecasting to meet its ceiling in 2018/2019. It is spending less than the national average on agency as a proportion of total pay spend. Agency staff cost per WAU, at 72, is below the national median of 137. The trust explained they achieved reductions in the cost of agency and locum staff through tackling the run rate overall and implementing a moratorium on the use of agency nursing. All locums in place over six months are monitored on a monthly basis to ensure the initial reason for the agency staff is still relevant. Page 7 of 15

The trust is currently reviewing the use of E Rostering with the aim of finding out how it can be more effectively utilised before relaunching as not all wards are using the system. The trust is working closely with the E Rostering provider and NHS Professionals who provide temporary staff to the trust. The trust has introduced new roles across the workforce that will challenge the traditional medical models. This includes utilising Advanced Nurse Practitioners on medical rotas to allow medical trainees the opportunity to fully complete their training scheme requirements. All consultants have a job plan that is reviewed annually and is recorded electronically. The trust has a staff retention rate of 90.44% (year ending November 2017), compared with a national median of 86%. The trust has a 4.71% 12 month accumulative sickness rate (4.29% at February 2018). The overall turnover of staff is 10.04%. However, sickness rates are above the average within band 5 nurses 13.79% and clinical support staff. The trust explained it has introduced a programme to improve staff health wellbeing and retention. A Nursing and Midwifery Workforce Strategy is in place to address recruitment, retention and wellbeing in response to issues which had been identified in the service. How effectively is the trust using its clinical support services to deliver high quality, sustainable services for patients? The trust is making progress in how it utilises its own clinical support services or works in collaboration with others to do this. For pathology the overall cost per test for the trust is 1.62 against a national median of 1.91. The trust is in the second quartile and has further plans to reduce the cost where possible in closer collaboration with a neighbouring provider. The trust advised that it will also be looking at on-call arrangements collaboratively with other local providers. The trust is working collaboratively with the Countess of Chester NHS Foundation Trust to implement the recommendations from the Carter Review into operational productivity in the NHS of a hub and spoke delivery model at scale. The trust is very actively engaged in this programme both at a local delivery level and at the STP level. The trust is collaborating in the Cheshire & Merseyside Imaging Collaborative which has been selected and supported as an early adopter project. There is an established history of working together and an active project to implement shared Picture Archiving and Communication System (PACS) across the collaborative. The trust acknowledged a shortage in reporting capacity and is outsourcing a significant amount of this work. The trust noted it does not currently offer remote/home working for reporting, although this is something that they are considering in the future. Medicines cost per WAU at 279 is below the national median of 320 and the trust is performing well against the other medicines management key performance indicators (KPIs) and YTD indicates a 3.8m underspend against the planned expenditure, with the trust noting that it has strong clinical pharmacy leadership. The stockholding days for medicines reported by the trust is 8 days compared to a national median of 18.8 days. The trust is delivering cost improvement programme (CIP) levels in excess of the plan for Medicines and Pharmacy planned for 330k in savings, with 379K saved to date. The trust provided some examples of use of technology with virtual clinics to triage and direct Page 8 of 15

patients to the most appropriate test before their outpatient appointment in place within respiratory medicine. Virtual triage is also in place for lower and upper gastro-intestinal services for patients identified requiring an endoscopic diagnostic test. The trust acknowledged that there was much more that could be considered especially related to follow up appointments. How effectively is the trust managing its corporate services, procurement, estates and facilities to maximise productivity to the benefit of patients? The trust has shown progress to managing corporate services, procurement and estates to maximise benefits to patients. The trust is actively engaged in exploring collaborations for payroll, procurement, IT and occupational health services and is working with Countess of Chester NHS Foundation Trust, East Cheshire NHS Trust and Liverpool Heart & Chest NHS Foundation Trust. The trust has a finance cost per 100m turnover of 754,128 which is above the national median of 685,569. The trust indicated that this was due to programme management office (PMO) and consultancy costs at that time related to turnaround. They acknowledged that there was further work to do to develop a viable model going forward. The Human Resource costs are below the national average, with costs per 100m turnover of 649,592 compared to a national median of 761,285. The Supplies and Service cost per WAU is 380 which is just above the national median of 375. The trust has made significant progress on procurement with performance against the Purchase Price Index Benchmark (PPIB) Top 100 opportunities with a variance of 5.90% against the median compared to a national variance of 6.90%. PPIB opportunities are built into the annual procurement work plan. The trust is working with the Countess of Chester NHS FT to further develop procurement opportunities during 2018/19. The trust has one of the lowest estates costs per square meter nationally of 199 which is the second lowest in England. The current cost of backlog maintenance is 59 per square meter which is above the national average of 55 per square meter. The trust is undertaking a six facet survey which will identify the current backlog maintenance needs over the next five years. How effectively is the trust managing its financial resources to deliver high quality, sustainable services for patients? The trust is not currently managing its financial resources to deliver high quality care, however, it does understand the circumstances driving its financial performance. The trust reported a deficit of 10.5m for 2016/17 (excluding Sustainability and Transformation Fund), which was 10.8m worse than plan. The trust received 6.9m STF. For 2017/18, the trust is forecasting to deliver a deficit of 22.7m (6.9% of turnover, subject to audit and excluding STF), which is 13.4m worse than the control total. The trust reported 2016/17 cost savings of 8.3m (1.5% expenditure), with a further 2.9m delivered through income generation schemes with 74% classified as recurrent. At the time of the assessment in April 2018 the trust was forecasting to deliver cost savings of 8.4m (2.4% of expenditure) against a target of 15m (4.2% of expenditure). The trust noted the underperformance is due to delays in implementation of schemes because of unanticipated Page 9 of 15

operational pressures. The trust accepted the 2017/18 control total of a deficit of 0.4m, which includes 8.9m STF. The trust s cash balance at the end of 2016/17 was 5.4m and it is forecasting a closing cash balance of 7.9m at the end of 2017/18. The capital servicing capacity is a measure of the trust s ability to meet its borrowing obligations. This metric was 0.17 at the end of 2016/17 and is expected to deteriorate to -2.70 at the end of the 2017/18, with the deterioration mainly due to short-term borrowing and repayment of working capital in year. The draft annual plan for 2018/19 shows deterioration throughout the year, with a metric of -3.08 by the end of the year. This is due to the deterioration in the trust s deficit, resulting in reduced ability to meet financial obligations, thus requiring cash support. The trust produces costing information by division and clinical area (service line reporting) and has used it to support some service changes. The trust recognises the approach to using SLR requires further development. Outstanding practice There is very strong Pharmacy leadership within the trust with potential high-level practice that could be transferable to others. The service has introduced developments such as extended ward based clinical pharmacy services, with pharmacists and technicians dedicated to every ward and medicines house-keepers who transfer medicines between wards with patients to minimise waste and reduce the need for re-supply. This has led to very low stock holdings of medicines and the opportunity to make efficiency gains and cost This level of service supports quality and safety, patient flow and contains medicines costs. The ability to see discharge prescriptions electronically as soon as they are prescribed, the presence of satellite dispensaries across the hospital and air-tube to transport medicine or support patient flow with mean discharge dispensing times of approximately 40 minutes. The pharmacy service operates 7 days per week 365 days per year. Areas for improvement The trust has shown a number of areas of poor performance in its use of resources which were recognised by the trust during the inspection. These are: Financial Management failing to achieve financial targets in 2016/17 and at the time of the inspection forecasting not to achieve financial targets for 2017/18 Trust is reliant on financial loans from the Department of Health Page 10 of 15

Trusts has higher operating costs as measured by WAU than other hospitals Staff sickness absence levels are higher than the national average. Trust is failing to meet two of the NHS Constitutional Standards; A&E Waiting Times and Referral to Treatment waiting times The number of patients not attending their appointments is higher than the national median. The Executive Team had plans in place signed off and monitored by the trust board to address areas for improvement such as Workforce. Financial recovery. Progress towards achievement of constitutional standards in A&E and RTT. Effective use of the estate. Page 11 of 15

Use of Resources report glossary Term 18-week referral to treatment target 4-hour A&E target Agency spend Allied health professional (AHP) AHP cost per WAU Biosimilar medicine Cancer 62-day wait target Capital service capacity Care hours per patient day (CHPPD) Cost improvement programme (CIP) Control total Diagnostic 6- week wait target Did not attend Definition According to this national target, over 92% of patients should wait no longer than 18 weeks from GP referral to treatment. According to this national target, over 95% of patients should spend four hours or less in A&E from arrival to transfer, admission or discharge. Over reliance on agency staff can significantly increase costs without increasing productivity. Organisations should aim to reduce the proportion of their pay bill spent on agency staff. The term allied health professional encompasses practitioners from 12 diverse groups, including podiatrists, dietitians, osteopaths, physiotherapists, diagnostic radiographers, and speech and language therapists. This is an AHP specific version of the pay cost per WAU metric. This allows trusts to query why their AHP pay is higher or lower than national peers. Consideration should be given to clinical staff mix and clinical staff skill mix when using this metric. A biosimilar medicine is a biological medicine which has been shown not to have any clinically meaningful differences from the originator medicine in terms of quality, safety and efficacy. According to this national target, 85% of patients should begin their first definitive treatment for cancer within 62 days following an urgent GP referral for suspected cancer. The target is 90% for NHS cancer screening service referrals. This metric assesses the degree to which the organisation s generated income covers its financing obligations. CHPPD measures the combined number of hours of care provided to a patient over a 24 hour period by both nurses and healthcare support workers. It can be used to identify unwarranted variation in productivity between wards that have similar speciality, length of stay, layout and patient acuity and dependency. CIPs are identified schemes to increase efficiency or reduce expenditure. These can include recurrent (year on year) and non-recurrent (one-off) savings. CIPs are integral to all trusts financial planning and require good, sustained performance to be achieved. Control totals represent the minimum level of financial performance required for the year, against which trust boards, governing bodies and chief executives of trusts are held accountable. According to this national target, at least 99% of patients should wait no longer than 6 weeks for a diagnostic procedure. A high level of DNAs indicates a system that might be making unnecessary Page 12 of 15

(DNA) rate Distance from financial plan Doctors cost per WAU Delayed transfers of care (DTOC) EBITDA Emergency readmissions Electronic staff record (ESR) Estates cost per square metre Finance cost per 100 million turnover Getting It Right First Time (GIRFT) programme Human Resources (HR) cost per 100 million turnover outpatient appointments or failing to communicate clearly with patients. It also might mean the hospital has made appointments at inappropriate times, eg school closing hour. Patients might not be clear how to rearrange an appointment. Lowering this rate would help the trust save costs on unconfirmed appointments and increase system efficiency. This metric measures the variance between the trust s annual financial plan and its actual performance. Trusts are expected to be on, or ahead, of financial plan, to ensure the sector achieves, or exceeds, its annual forecast. Being behind plan may be the result of poor financial management, poor financial planning or both. This is a doctor specific version of the pay cost per WAU metric. This allows trusts to query why their doctor pay is higher or lower than national peers. Consideration should be given to clinical staff mix and clinical staff skill mix when using this metric. A DTOC from acute or non-acute care occurs when a patient is ready to depart from such care is still occupying a bed. This happens for a number of reasons, such as awaiting completion of assessment, public funding, further non-acute NHS care, residential home placement or availability, or care package in own home, or due to patient or family choice. Earnings Before Interest, Tax, Depreciation and Amortisation divided by total revenue. This is a measurement of an organisation s operating profitability as a percentage of its total revenue. This metric looks at the number of emergency readmissions within 30 days of the original procedure/stay, and the associated financial opportunity of reducing this number. The percentage of patients readmitted to hospital within 30 days of discharge can be an indicator of the quality of care received during the first admission and how appropriate the original decision made to discharge was. ESR is an electronic human resources and payroll database system used by the NHS to manage its staff. This metric examines the overall cost-effectiveness of the trust s estates, looking at the cost per square metre. The aim is to reduce property costs relative to those paid by peers over time. This metric shows the annual cost of the finance department for each 100 million of trust turnover. A low value is preferable to a high value but the quality and efficiency of the department s services should also be considered. GIRFT is a national programme designed to improve medical care within the NHS by reducing unwarranted variations. This metric shows the annual cost of the trust s HR department for each 100 million of trust turnover. A low value is preferable to a high value but the quality and efficiency of the department s services should also be considered. Page 13 of 15

Income and expenditure (I&E) margin Key line of enquiry (KLOE) Liquidity (days) Model Hospital Non-pay cost per WAU Nurses cost per WAU Overall cost per test Pay cost per WAU Peer group Private Finance Initiative (PFI) Patient-level costs Pre-procedure elective bed days This metric measures the degree to which an organisation is operating at a surplus or deficit. Operating at a sustained deficit indicates that a provider may not be financially viable or sustainable. KLOEs are high-level questions around which the Use of Resources assessment framework is based and the lens through which trust performance on Use of Resources should be seen. This metric measures the days of operating costs held in cash or cash equivalent forms. This reflects the provider s ability to pay staff and suppliers in the immediate term. Providers should maintain a positive number of days of liquidity. The Model Hospital is a digital tool designed to help NHS providers improve their productivity and efficiency. It gives trusts information on key performance metrics, from board to ward, advises them on the most efficient allocation of resources and allows them to measure performance against one another using data, benchmarks and good practice to identify what good looks like. This metric shows the non-staff element of trust cost to produce one WAU across all areas of clinical activity. A lower than average figure is preferable as it suggests the trust spends less per standardised unit of activity than other trusts. This allows trusts to investigate why their non-pay spend is higher or lower than national peers. This is a nurse specific version of the pay cost per WAU metric. This allows trusts to query why their nurse pay is higher or lower than national peers. Consideration should be given to clinical staff mix and clinical staff skill mix when using this metric. The cost per test is the average cost of undertaking one pathology test across all disciplines, taking into account all pay and non-pay cost items. Low value is preferable to a high value but the mix of tests across disciplines and the specialist nature of work undertaken should be considered. This should be done by selecting the appropriate peer group ( Pathology ) on the Model Hospital. Other metrics to consider are discipline level cost per test. This metric shows the staff element of trust cost to produce one WAU across all areas of clinical activity. A lower than average figure is preferable as it suggests the trust spends less on staff per standardised unit of activity than other trusts. This allows trusts to investigate why their pay is higher or lower than national peers. Peer group is defined by the trust s size according to spend for benchmarking purposes. PFI is a procurement method which uses private sector investment in order to deliver infrastructure and/or services for the public sector. Patient-level costs are calculated by tracing resources actually used by a patient and associated costs This metric looks at the length of stay between admission and an elective procedure being carried out the aim being to minimise it and the associated financial productivity opportunity of reducing this. Better performers will have a Page 14 of 15

lower number of bed days. Pre-procedure non-elective bed days Procurement Process Efficiency and Price Performance Score Sickness absence Service line reporting (SLR) Supporting Professional Activities (SPA) Staff retention rate Top Ten Medicines Weighted activity unit (WAU) This metric looks at the length of stay between admission and an emergency procedure being carried out the aim being to minimise it and the associated financial productivity opportunity of reducing this. Better performers will have a lower number of bed days. This metric provides an indication of the operational efficiency and price performance of the trust s procurement process. It provides a combined score of 5 individual metrics which assess both engagement with price benchmarking (the process element) and the prices secured for the goods purchased compared to other trusts (the performance element). A high score indicates that the procurement function of the trust is efficient and is performing well in securing the best prices. High levels of staff sickness absence can have a negative impact on organisational performance and productivity. Organisations should aim to reduce the number of days lost through sickness absence over time. SLR brings together the income generated by services and the costs associated with providing that service to patients for each operational unit. Management of service lines enables trusts to better understand the combined view of resources, costs and income, and hence profit and loss, by service line or speciality rather than at trust or directorate level. Activities that underpin direct clinical care, such as training, medical education, continuing professional development, formal teaching, audit, job planning, appraisal, research, clinical management and local clinical governance activities. This metric considers the stability of the workforce. Some turnover in an organisation is acceptable and healthy, but a high level can have a negative impact on organisational performance (eg through loss of capacity, skills and knowledge). In most circumstances organisations should seek to reduce the percentage of leavers over time. Top Ten Medicines, linked with the Medicines Value Programme, sets trusts specific monthly savings targets related to their choice of medicines. This includes the uptake of biosimilar medicines, the use of new generic medicines and choice of product for clinical reasons. These metrics report trusts % achievement against these targets. Trusts can assess their success in pursuing these savings (relative to national peers). The weighted activity unit is a measure of activity where one WAU is a unit of hospital activity equivalent to an average elective inpatient stay. Page 15 of 15