Sutherland Older Adults Services
FULL BUSINESS CASE
July 2009
CONTENTS1 / EXECUTIVE SUMMARY………………….…………………… / 3
1.1 / Project Background and Objectives…………………………….
1.2 / Preferred Solution ………………………………………………..
1.3 / Capital ……………………………………………………………..
1.4 / Affordability Assessment ………………………………………..
1.5 / Economic Appraisal ……………………………………………..
1.6 / Contract Framework, Project Milestones and Timetable ……
2 / STRATEGIC CONTEXT…………………..…………………… / 7
2.1 / NHS Highland……………………………………………………
2.2 / Deprivation ………………………………………………………
2.3 / Mental Health …………………………………………………….
2.4 / Local Context …………………………………………………….
2.5 / Summary …………………………………………………………
3 / REVIEW OF THE OUTLINE BUSINESS CASE …………… / 19
3.1 / Outline Business Case…......
3.2 / Short Listed Options……………………………………………..
3.3 / Non Financial Benefits Appraisal……………………………....
3.4 / Financial Appraisal…….…………………………………………
3.5 / Preferred Option………………………………………………….
3.6 / Movements from OBC to FBC…………………………….
4 / THE PROCUREMENT PROCESS………..…………………. / 24
4.1 / Introduction……………………………………………………….
4.2 / Background to the Procurement Route………………….…….
4.3 / Advertising the Project…………………………………………..
4.4 / Pre Qualification Questionnaire………………………………...
4.5 / Invitation to Tender (ITT)………………………………………..
4.6 / Post Tender Interviews………………………………………….
4.7 / PSCP Appointment………………..……………………………
4.8 / Involvement of Stakeholders……………………………………
4.9 / Interaction with the Principal Supply Chain Partner………….
5 / THE PREFERRED SOLUTION………..…………………… / 29
5.1 / Introduction……………………………………………………….
5.2 / Project Structure…………………………………………………
5.3 / Project Description………………………………………………
5.4 / Project Management Arrangements
5.5 / Key Features of the Design…………………………………….
5.6 / Clinical Functionality…………………………………………….
5.7 / Selection of Materials……………………………………………
5.8 / Wayfinding & Interior Design…...………………………………
5.9 / Making Best Use of the Site……………………………………
5.10 / Flexibility & Future Expansion…………………………………
5.11 / NEAT-Sustainable Approach to Development……………….
5.12 / Planning Permission…………………………………………….
5.13 / Timeline…………………………………………………………..
6 / EQUIPMENT…………………………………..……………….. / 43
6.1 / Introduction……………………………………………………….
6.2 / Equipment Categorisation…………………………………..…..
6.3 / Equipment Strategy..…………………………………..………..
6.4 / Equipment Procurement……………………..…………………
6.5 / Equipment Commissioning…………………..…………………
6.6 / Funding of Equipment……………………..……………………
7 / CONTRACT FRAMEWORK…………..….………………….. / 45
7.1 / Introduction……………………………..………………………..
7.2 / Overview of the Contract Framework….………….…………..
7.3 / The Principal Supply Chain Partner and its Supply Chain….
7.4 / The Board’s Right to Terminate…………………….……..…..
7.5 / Reviews and Approvals………………..……………………….
7.6 / PSCP Payments…………..…………………………………….
7.7 / Open Book Accounting…..……………………………………..
7.8 / Setting the Target Price……………….………………………..
8 / FINANCE ……………………………………………………… / 49
8.1 / Capital Cost …………………………………………………….
8.2 / Revenue Implications ………………………………………….
8.3 / Economic Appraisal/Value for Money Analysis …………….
8.4 / Accounting Treatment …………………………………………
9 / RISK ANALYSIS AND RISK MANAGEMENT STRATEGY / 51
9.1 / Introduction……………………………………………..…….…
9.2 / Risk Management Overview……………………………….….
9.3 / Risk Management Process……………………………………
9.4 / Current Risk Profile at Full Business Case…..………………
9.5 / Risk & The Commercial Framework………………………….
9.6 / Board Risk………………………………………………………
10 / BENEFITS ASSESSMENTS AND BENEFITS REALISATION PLAN / 58
10.1 / Principles……………………………………………………….
10.2 / Accessibility …………………………………………………….
10.3 / Quality of Care…………………………………………………
10.4 / Operational and Environmental Suitability…………………..
10.5 / Staff Recruitment, Training and Development………………
10.6 / Timing …………………………………………………………..
11 / POST-PROJECT EVALUATION PLAN / 60
11.1 / Process………………………………………………………….
12 / CONCLUSION………………………………………………….. / 61
12.1 / Summary ………………………………………………………
LIST OF APPENDICES
Appendix A / Risk RegisterAttached1. / EXECUTIVE SUMMARY
1.1 / Project Background and Objectives
1.1.1
1.1.2
1.1.3
1.1.4 / Services for older adults in Sutherland have changed markedly in recent years with increasing emphasis on supporting patients in their own homes for as long as possible by increasing community services and offering hospital and community based rehabilitation. MigdaleHospital in BonarBridge, built as the county’s Poor House, has changed from a predominantly long stay unit, to a progressive hospital fully committed to rehabilitating patients and enabling them to return to their own homes if at all possible. Unfortunately, the hospital building which is on 2 floors, has very narrow corridors and totally inadequate sanitary facilities,is not fit for purpose and requires replacement or total refurbishment.
Over a number of years, wide ranging consultations have been held on the needs of older people in Sutherland with local councillors, community councillors, patients and their representatives, NHS and social work staff and voluntary services.
NHS Highland has worked closely with RD Health and Highland Council to bring forward the proposals in this Business Case.
The Outline Business Case (OBC) for “Sutherland Older Adult Services” was approved by the Scottish Government Capital Investment Group. The preferred option identified was for the provision of a new build replacement MigdaleHospital on a greenfield site in BonarBridge.
The purpose of the new hospital is to provide inpatient services for Older People with Mental Illness in Sutherland and GP patients predominantly from central, west and north Sutherland. Also outpatient services for physiotherapy patients.
The population of older adults in Sutherland is projected to continue to increase at a higher rate than the rest of Highland.
The Scottish Indices of Multiple Deprivation show Sutherland at 35% above the Highland average. North and West Sutherland has the worst ranking in Scotland for the “Geographical Access to Services” domain.
There are significant demographic and geographical challenges to the care of older people in Sutherland.
Sutherland has a geographic area of 2268 square miles with a poor road and transport infrastructure in many areas and extensive journey times both within the county and to Inverness. Population density is low, particularly in North and West Sutherland and is distributed along the coastline in many small communities. There is no population concentration that could support a hospital base in the North and West. BonarBridge lies on the main travel route from North and West Sutherland to Inverness.
Sutherland is the most extreme example of Highland’s demographic imbalance. By 2024 it will have the highest proportion of old people and the lowest proportion of children in Highland with a working age population biased towards the older age groups.
The Sutherland hospitals are a key part of primary care and community service provision. They are embedded in communities, accessible, flexible and integrated with key partners in the Local Authority and voluntary sector.
This Business Case meets five of the key objectives that form the strategic framework for NHS Highland.
It is envisaged that a modern 22 bedded community hospital is required in BonarBridge to meet the needs of psychiatry of old age patients with a co-located and integrated community outreach service. General medicine, palliative care and less intensive rehabilitation services for GP patients are required and beds for patients who have undergone surgery and other treatments at acute hospitals and no longer require specialist services. Allied Health Professional services will be provided from the site including outpatient physiotherapy. Enhanced community services will be provided.
1.2
1.2.1
1.2.2 / Preferred Solution
The preferred solution is a new build facility in BonarBridge. The project will be procured through Frameworks Scotland.
The design of the new hospital provides a modern, fit for purpose facility capable of delivering a locally based and locally responsive, high quality, inpatient service.
The design solution will focuses on the creation of a hospital that is responsive to the changing needs of clinical practice and achieves the following objectives:
- Inpatient facilities to provide hospital levels of clinical services together with a high standard of hotel and support services;
- Optimal use of beds by providing a flexible ward design including the provision of all single rooms;
- Facilitating the ability to expand;
- Creation of premises that are secure, efficient, flexible and easy to maintain;
- Creation of inpatient facilities which will demonstrate, as tangibly as possible, a homely and comfortable environment allied to current nursing/clinical philosophy and practice;
- Design and specification of facilities to demonstrate best practice;
- The building and the exterior landscaping will reflect the locality. Architectural style will demonstrate an effective combination of clinical efficiency and aesthetics.
- To enable the provision of a modern community hospital service;
- To maximise clinical effectiveness;
- To improve the quality of service available to the local population by providing modern purpose built facilities;
- To enable the provision of an efficient and effective service;
- To provide accessible services;
- To provide flexibility for future change;
- To provide a facility that is acceptable to patients, staff and the public;
- To provide a contemporary and modern facility which will support health care services over at least the next 30 years.
1.3 / Capital
1.3.1 / The Capital Costs for the new development are summarised in the table below:
Net Cost / Total Cost
£000’s / Include VAT
Works Costs / 5,552
PSCP O/H and Profit / 432
Not to Exceed Price / 5,984 / 6,385
Sunk Fees / 401
Framework Professional Fees / 365
Equipment & ICT etc. / 304
Employer’s Risk / 110
Site Acquisition / 175
Site Disposals / -180
Total Project Cost / 7,159 / 8,322
1.4 / Affordability Assessment
1.4.1 / The cash flow profile for revenue and capital costs between 2009/10 and 2010/11 is outlined in the table below:
Financial Year / NHS Capital
£000
2009/10 / 5,014
2010/11 / 5,014
2011/12 / 6,037
2012/13 / 6,037
1.5 / Economic Appraisal
At the Outline Business Case stage, the capital and associated revenue costs of the options were used to carry out an economic appraisal using discounted cash flow techniques in line with Scottish Government Health Department guidance. The only change in costs is an increase of £0.596m in respect of the preferred solution.
At that time the preferred option was shown to have the lowest Net Present Cost (NPC) and Equivalent Annual Cost (EAC) of those options which could deliver the required project objectives. The updated economic appraisal indicates that the preferred solution would still be the option with the lowest NPV and EAC.
1.6 / Contract Framework, Project Milestones and Timetable
1.6.1 / The key dates and milestones associated with this project are detailed in the table below:
Detailed Planning Consent / 4th February 2009
‘Not to Exceed’ Budget Submitted / 9th July 2009
Submission of FBC to NHS Board / 27th August 2009
Agree Target Cost / 31st August 2009
Submit FBC to CIG / 22nd September 2009
Construction Commencement / 2nd November 2009
Practical Completion / 19th November 2009
Services Commencement / 1st March 2011
2. / STRATEGIC CONTEXT
2.1 / Health of Older People
2.1.1 / There are important challenges to the care of older people including:
- Increased proportion of older people in the population
- Fewer working age people to provide the pool of professional carers
- More single person households
- Changed family and social patterns, meaning that children may stay further from their parents, and may be less willing to be a main carer
- Increasing expectations of the type and quality of care to be provided
Sutherland faces all of these challenges, but with additional risks of depopulation, particularly of younger people who might act as family or professional carers, and of providing services in sparsely populated areas with reductions in efficiency of service delivery, and consequently increased costs.
2.2 / Geography
2.2.1 / The provision of health and social care services is particularly challenging in Sutherland which has a huge geographic area of 2268 square miles, over a third of the Highland Council area. Many roads are single track, journey times from one end to the other can be up to 3 hours and public transport outwith the East Coast is almost non-existent.
2.2.2 / NHS Highland’s catchment area comprises the largest and most sparsely populated part of the UK with all the attendant issues of a difficult terrain, rugged coastline, populated islands and a limited internal transport and communications infrastructure. The area covers 32,518 km² (12,507 square miles), which represents approximately 41% of the Scottish land surface. The geographical nature of the region presents particular challenges for the efficient and effective delivery of health care services.
NHS Highland serves a population of some 299,000 residents (within the Highland and Argyll & Bute Council boundaries)and sees a proportion of its patients from the influx of tourists to the Highlands, which at certain times of the year can double or even triple the local population.
The proportion of older people is above the Scottish average. However, levels of morbidity and levels of deprivation are well below the Scottish average. In total NHS Highland will annually see and treat approximately 38,000 inpatients, 13,000 day case patients, 7,000 renal day attendances, 50,000 new outpatients and 39,000 accident and emergency attendances. About two thirds of inpatients are admitted as emergencies.
In 2008, NHS Highland had a Revenue Resource limit of £526 million.
A higher population growth rate is projected in NHS Highland than Scotland as a whole between 2006 and 2031 (7% compared to 5%). For those over pensionable age, the projected growth rate over the same period is 44% in NHS Highland compared to 31% for Scotland as a whole.
Local Health Plans are produced every three years and set out each Scottish Health Board’s progress against the national and local priorities and targets and the strategy for achieving these.
NHS Highland also operates within the wider Scottish policy framework, largely driven by 3 key reports:
- “Building a Health Service Fit for the Future” (2005), which became known as the Kerr Report. This document sets out the challenges facing the NHS in Scotland, in particular our ageing population and the rising incidence of long-term or chronic conditions. The report also recognises the particular challenges facing rural communities, including access to services and transport issues.
- "Delivering for Health" (2005). A document which describes the need to focus more on preventing ill health and reducing the impacts of long term conditions. This approach aims to provide as much as possible in people’s own communities, and to reduce acute admissions to hospital, especially unplanned or emergency admissions
- “Better Health Better Care Action Plan” (2007). This document builds on the earlier work, and sets out a series of actions to “help people to sustain and improve their health, especially in disadvantaged communities, ensuring better, local and faster access to health care”
2.3
2.3.1 / The People of Sutherland
The North Highland CHP has an older population than Scotland as a whole (Figure 1). The population of Sutherland is unevenly distributed, with around 10,000 people in the East and 3,500 in the north and West (Tables 1 and 2). The proportion of people at younger working age is particularly low in the north and west (Figure 2).
A statistical review had shown that older people in Sutherland are far more likely to be treated in inpatient care than older people elsewhere. A factor may be the lack of other service provision. The only nursing home is in East Sutherland and has 40 places with an occupancy level of 98%, compared with a Highland average of 84%. Trends in social care have led to more community care packages, which it has not been possible to match in a planned or integrated way with community health services.
The latest population projections for Sutherland show that between 2006 and 2031 The number of people aged 65 to 74 is expected to increase by almost a half while the number of people aged 75 and over will double, and in 2031 almost a quarter of the population will be in this elderly age (Figure 3). This, combined with the expectation that there will be significantly lower proportions of children and people aged 16-44 years than elsewhere in Highland, poses significant challenges to our ability to deliver health care in the area.
The Scottish Indices of Multiple Deprivation 2003 show Sutherland at 24.88 which is 35% above the Highland average of 18.41. North and West Sutherland has the highest ranking (i.e. worst) in Scotland for the “Geographical Access to Services” domain.
The provision of health and social care services is particularly challenging in Sutherland which has a huge geographic area of 2268 square miles, over a third of the Highland Council area. Many roads are single track, journey times from one end to the other can be up to 3 hours and public transport outwith the East Coast is almost non-existent.
Figure 1: Comparison of the North CHP Population Structure to Scotland
Source: Scottish Neighbourhood Statistics
TABLE 1POPULATION OF EAST SUTHERLAND
(Data source CHI Practice list population at October 2006)
male / female / total
0-4 / 162 / 174 / 336
5-9 / 235 / 252 / 487
10-14 / 277 / 305 / 582
15-19 / 303 / 266 / 569
20-24 / 230 / 153 / 383
25-29 / 187 / 167 / 354
30-34 / 200 / 191 / 391
35-39 / 256 / 288 / 544
40-44 / 337 / 354 / 691
45-49 / 399 / 421 / 820
50-54 / 381 / 358 / 739
55-59 / 430 / 420 / 850
60-64 / 385 / 378 / 763
65-69 / 316 / 349 / 665
70-74 / 281 / 310 / 591
75-79 / 212 / 290 / 502
80-84 / 137 / 197 / 334
85-89 / 52 / 121 / 173
90+ / 25 / 67 / 92
total / 4,805 / 5,061 / 9,866
Table 2Population of NORTH AND West Sutherland
(Data source CHI Practice list population at October 2006)
male / female / total
0-4 / 65 / 74 / 139
5-9 / 88 / 74 / 162
10-14 / 102 / 103 / 205
15-19 / 112 / 83 / 195
20-24 / 62 / 37 / 99
25-29 / 67 / 55 / 122
30-34 / 64 / 65 / 129
35-39 / 111 / 108 / 219
40-44 / 153 / 140 / 293
45-49 / 150 / 138 / 288
50-54 / 144 / 139 / 283
55-59 / 173 / 157 / 330
60-64 / 145 / 123 / 268
65-69 / 119 / 109 / 228
70-74 / 85 / 82 / 167
75-79 / 58 / 80 / 138
80-84 / 39 / 65 / 104
85-89 / 16 / 44 / 60
90+ / 6 / 17 / 23
total / 1,759 / 1,693 / 3,452
Figure 2: Age Structure of Locality Health Partnership (LHP) Areas within the North Highland Community Health Partnership
(Data source CHI Practice list population at October 2006)
Populations – 2004 (bar) and Projected 2024 (line)
Sutherland WestSutherland East
Figure 3 SutherlandPopulation – 2006 and Projected 2031
(Source: The Highland Council Policy & Information Briefing Note No. 28, Council Area Population Projections 2006-2031)
The population is also distributed in many small communities (Figure 3). East Sutherland, an enormous area in its own right, appears to have a relatively compact population in comparison to the smaller, but much more widely distributed, population in North and West Sutherland. In North and West Sutherland, the main population is distributed along the coastal areas, in extended settlements. Population density, even in settlements, is low, as some villages and associated housing are spread across large areas.
There are important challenges on the north and west coasts, and current joint work is reviewing the scope for small scale residential provision, and associated services. It is apparent, however, that there is no population concentration that could support a hospital base in the north or west. The transport flow is apparent from the map as through Lairg and then Inverness, rather than towards Caithness. Lairg is the most central site in Sutherland, and some have argued for a wholesale move of all Sutherland hospital provision to Lairg. Bonar Bridge lies on the main travel routes to Inverness from North and West Sutherland which is over 2 hours drive time from Inverness. The benefits of established sites at BonarBridge and Golspie are substantial and it was these benefits, considered in the option appraisal process, that lead to the decision to maintain two-site provision.
The challenge for the future, particularly in the context of more single person households, is to provide care in widely distributed, sparsely populated areas with limited sources of staff of traditional working age. Hospitals are an efficient means of concentrating care, but they provide care to a very small proportion of the population at any one time. The hospitals in Sutherland make sense as part of co-ordinated primary care and community service provision, and this business case locates them as a key part of community service provision, rather than an a separate, disconnected secondary care service.
Figure 4: Population Distribution in Caithness and Sutherland.