Appendix 6(b)

EXECUTIVE SUMMARY

Strategic Outline Case

Version 9 – submitted to North West Strategic Health Authority August 2007

Developed in partnership with Lancashire Mental Health and Social Care Partnership Board

INTRODUCTION

Lancashire Care NHS Trust (LCT) is committed to providing high quality mental health services to the people of Lancashire.

The central element of our plans for future services is the development of accessible and effective community services offering 24 hour support and reducing the need for admission to hospital. Though fewer people will need to be admitted to hospital as these specialist community teams are established, those who will require admission need to be cared for in units which offer the highest standards of care, including the physical environment

The hospital beds will be part of a whole system approach to care, starting from the service user’s home, through their GP and community support. It is accepted that current buildings where in patient services are provided are not fit for purpose. This coupled with the reduction in demand for beds has lead to the need to replace the current buildings with purpose built accommodation which can support plans for the development of user-centred, high quality care.

Though this Strategic Outline Case (SOC) focuses on the replacement of existing buildings, it must be seen in the context of wider system change and development.

The SOC focuses on the intention by Commissioners and Lancashire Care NHS Trust to invest to replace current in patient beds with four purpose built in patient facilities across Lancashire, one in East Lancashire, Central Lancashire, Blackpool and Lancaster.

The SOC also includes information from Commissioners about the whole system approach and plans for future investment in the community and primary aspects of mental heath service provision in the statutory and other sectors

The purpose of this section is to tell the “story” behind and summarise the SOC. This is the majorinitiative in the trust’s future strategic business and has major implications for the delivery of services and the business of Lancashire Care NHS Trust (LCT).

The SOC is a major undertaking and, as such, will be closely examined by MONITOR in the appraisal of LCT as a potential Foundation Trust. The Trust Board has a clear understanding of the clinical and business imperatives behind the SOC and are familiar with the risks presented and how these will be managed as part of the process.

STRATEGIC CONTEXT

Background

The mental health National Service Framework (NSF) (1999) set out a clear direction for the provision of mental health services in England. An over reliance on hospital beds and the often negative therapeutic impact of in-patient admission steered the emphasis in the NSF towards treating people effectively as close to home as possible, avoiding admission to hospital. Hospital admissions, when required, should offer rapid access to the appropriate therapeutic environment for the shortest period required to enable the patient to return to the community, usually in the care of a mental health team or their GP.

The NSF set out the priorities in the provision of mental health services spanning from health promotion and intervention in mild to moderate mental illness, through to a variety of specialist community teams and specialist in-patient services for severe and enduring mental illness.

The NSF set out the provision of three specialist community based services –

  • Assertive Outreach – to support individuals in the community with chaotic lifestyles often involving non-compliance with medication and conflict with authority (local authorities, police, landlords etc)
  • Crisis Resolution Home Treatment – teams which would be available 24 days a week to intervene in crises and offer support and treatment to individuals and their carers without the need for hospital admission
  • Early Intervention Service – designed to identify psychosis at an early stage in the development of the illness (ideally first episode) and to offer the appropriate treatment/therapy to the individual and their family.

The function of these teams is based on international evidence of effectiveness and their structure was clearly defined in the national Psychiatric Implementation Guidance (PIG).

On the basis of these clearly stated national priorities and implementation targets for NHS providers, Primary Care Trusts were obliged to provide significant new investment for the establishment of teams. In Lancashire, this was not without controversy, as historically, commissioners had not invested significantly in mental health services and the pressure to invest in acute hospital services continued to grow. Although some PCTs took longer than others to invest, the services have gradually been established in Lancashire with the final “investment” on crisis and early intervention services agreed by all the PCTs.

LCT recognised that, in the light of new investment and the growing impact of the new teams, hospital admission rates would decline. This threw a sharp focus on the condition of in-patient units, which were universally regarded as not fit for purpose.

The difficulties presented by existing building stock are fundamentally due to the fact that these had been designed on an historical acute medical ward template and as such did not meet the needs of people with mental health problems. The key limitations are:

  • Too many beds
  • Lack of privacy
  • Very few single rooms
  • Complex mixture of needs on each ward
  • No therapeutic activity
  • No occupational/recreational activity
  • No access to appropriate external space
  • Poor observation

These views, constantly reported by service users, carers and staff are echoed across the country as many services find themselves in a similar position. It was clear that with the diminishing need for beds due to the impact of community teams, better facilities were required to offer the appropriate care to those who do require admission to hospital. Simple replacement of existing units on a “like for like” basis was not felt to be appropriate as many of the above issues would persist and may even worsen given the reducing number of beds. Patient mix was seen as a key issue on both older adult and adult wards. The need to have separate facilities for male and female patients was evident and the mixing together of groups of patients with differing complex needs was concluded as not appropriate. There was a general feeling amongst clinicians, users and carers, that more specialist facilities were necessary to offer the appropriate care to groups of people with similar needs such as:

  • Functional and organic mental illness
  • Behavioural problems
  • Dual Diagnosis
  • Early Onset Dementia
  • Personality Disorder
  • Young People
  • Vulnerable Adults
  • Women

These issues were examined by Lancashire Mental Health and Social Care Partnership Board and work was commissioned from Tribal Secta, an external consultancy, to scope what needed to be done.

Tribal Secta examined trends in admissions and carried out an analysis of the potential effects of community teams on hospital admission rates.

This work concluded, in line with national policy, that, as the need for hospital beds reduced as the impact of community teams reduced admissions, new in-patient facilities were needed which offered the therapeutic environment in which specialist care could be delivered within the current financial envelope of investment. It was considered essential that new community teams needed to be fully funded and operational before the anticipated bed and ward reductions would take place. The reductions in beds and wards would provide revenue funds to support the new in-patient unit running costs.

A number of options were then considered ranging from one unit for Lancashire through to five units for the county. Three units were selected as the preferred option. More than three sites were considered not to be affordable within a spending envelope governed by the national average cost per bed. Less than three was considered to be too remote from the majority of the population and to restrict choice significantly. The option of refurbishment of existing units was also considered but this was found to be expensive, whilst offering very limited increases in quality of care and the environment.

It was anticipated that the total revenue funding required to support new units would be less than currently invested in in-patient services, thus freeing up some resources which PCTs agreed would be re-invested in other mental health services such as supported accommodation. It was recognised that these additional services might be provided by non-statutory agencies.

Following PCT consultation on these proposals (Working together to improve mental health services in Lancashire) and endorsement by the Joint Overview & Scrutiny Committee, work began to produce the SOC document for approval by the North West Strategic Health Authority (SHA). The purpose of this document is to demonstrate the affordability of the proposed schemes and to ensure their congruence with local, regional and national plans and priorities.

The SOC also contains an additional site in the Lancaster & Morecambe area following separate consultation on future services formerly provided by Morecambe Bay PCT and transferred to Lancashire Care in October 2006.

Profile of Lancashire Care NHS Trust

Lancashire Care NHS Trust provides mental health and substance misuse services across the county of Lancashire to a population of 1.4 million, employing 3,400 staff. The Trust’s revenue in 2007/08 is £172m, largely from five Primary Care Trusts, three Drug Action Teams and a Specialist Commissioner for Secure Mental Health Services.

LCT has achieved its financial targets every year since its inception in 2002. In 2006 the trust fully met core standards and was rated “fair” for quality of services and “good” on the use of resources.

Like many mental health trusts, LCT has systematically developed strong user/carer involvement in its activities. People who use services, their carers and clinical staff are currently engaged in a strategic programme of change aimed at developing more efficient and effective ways of working to deliver high quality, cost effective services. This Service Transformation Programme is fully resourced and sets out clear outcomes for future service provision in the future.

With a strong financial track record and clear strategic plans developed with input from clinicians and the public, the Trust believes that Foundation Trust status offers the opportunity to maximise future investment and develop its public engagement through members and governors.

Partnership working

Strong partnerships exist with commissioners and other stakeholders through the Lancashire Mental Health Partnership Board, which produced proposals for consultation carried out by PCTs. These proposals led to commissioner approval for new in-patient mental health services in Lancashire, and are the basis on which this SOC is promulgated.

A continuous programme of involvement and engagement with key stakeholders is central to the implementation of the programme

HEALTH NEED

90% of people with mental health problems receive treatment and support from their GP. The remaining 10% are referred to specialist mental health services. Of these, only 10% require in-patient care.

The Department of Health Policy Implementation Guidance states:

“The purpose of adult acute psychiatric in-patient services is to provide a standard of humane treatment and care in a safe and therapeutic setting for service users in the most acute vulnerable stage of their illness. It should be for the benefit of those service users whose circumstances or acute care needs are such that they cannot at the time be treated and supported appropriately at home or in an alternative, less restrictive residential setting” (DOH 2002)

LCT currently provides in-patient services from 13 sites. These units are badly designed, have poor observation, do little to promote privacy and dignity and compromise the quality of care. Wards are generally in excess of 20 beds, with some providing as many as 28 beds, and offer limited access to single room accommodation.

With the “modernisation” of community mental health services, acute wards will continue to offer care for those in the most acute phases of mental illness. Internally, the Trust has seen migration of experienced staff from hospital wards to the more attractive community services and patients and their relatives continually point to the poor environments in which care is offered.

Running costs and maintenance of these buildings is high and the inevitable limitations of design mean that only limited improvements to the environment can be expected. It is therefore essential that Lancashire Care develops plans to offer high quality in-patient care as part of a service model based on recovery, social inclusion and equal access.

If these issues are not addressed, it is likely that patient dissatisfaction will continue, recruitment of key clinical staff will become increasingly difficult and, inevitably, commissioners may seek other providers who can offer the service required.

DEMAND/CAPACITY SCENARIO OPTIONS

LCT currently provides 835 in-patient beds for adult, older adults and psychiatric intensive care units (PICU). The Trust has modelled the future need for beds on the basis of clinical evidence indicating the effect of community teams in reducing demand for admission. Other factors which influence the number of beds required are average length of stay and occupancy levels.

The following criteria were used to develop a “do minimum” option and four other options with varying numbers of beds:

  • Varying levels of demand
  • Varying occupancy rates
  • Different ward sizes

As can be seen from the section below, all the options have been assessed as affordable. The “do minimum” option does not provide the quality improvements required for in-patient care.

A significant number and range of scenarios has been narrowed down to 4 possible options and a preferred option and most likely scenario being 560 acute beds with ward sizes varying from 15-18 beds (PICU – 8 beds) and 85%-90% occupancy. This scenario has been developed in the SOC for planning purposes. The Outline Business case will be developed jointly with Commissioners in each locality and bed numbers varied according to such things as site capacity, local need and decisions about where to locate specialist services which are not likely to be provided in every locality.

AFFORDABILITY
Capital Costs

Capital cost estimates for each scenario have been developed using national guidance and specific guidance for the Private Finance Unit of the Department of Health. Estimated land costs have been included.

The Trust will fund the land acquisition costs of £8 million and has allowed for this in the assumptions. The projections indicate that as a Foundation Trust the Trust will generate certain cash resources and these are detailed in the Integrated Business Plan (IBP). Given a long enough timescale (estimated as 14 years), the Trust would be able to generate sufficient cash to fully fund the programme. The Trust considers this timescale as presenting significant risks of loss of business and is therefore not acceptable.

The SOC has been prepared using the following assumptions:

  • The Trust will fund land acquisitions - £8m
  • The Trust will fund the development of the Central Lancashire and Lancaster schemes - £74m
  • Private finance will be used to fund the development of the East Lancashire and Fylde Coast schemes - £88m
  • The Trust will supplement its own resources with Public and Private Partnership (PPP) funding. This is considered to provide the most suitable compromise between affordability and speed of implementation. PPP funding will be more expensive in the longer term, but has cash flow advantages in the earlier years of the Programme allowing for it to be completed more quickly.

Following discussion with the PFI Review Director of the Department of Health Private Finance Unit, the following adjustments to the capital estimates have been made:

  • On costs calculated at 90% of departmental costs rather than 62%
  • Provisional location adjustments have been removed
  • Optimism bias has been excluded, to be used later when assessing risk

A number of procurement options are available to the Trust and the optimal solution has not yet been determined.

Table 3- Capital costs of scenarios £’000 (excluding VAT)

Scenario / Beds / Total capital cost @ MIPS 455
Do Minimum / 560 / £10,000
1 / 560 / £169,621
2 / 488 / £155,913
3 / 524 / £162,767
4 / 578 / £173,048
Revenue Implications

The Trust has assumed that recent investment in specialist community services will lead to a reduction in demand for in-patient beds and a consequent loss of income. The additional investment required for new in-patient services has been factored in. This investment is necessary to improve the quality of in-patient services to ensure they remain attractive to commissioners and service users.