The recent letter from NHS Improvement (NHSI) left Trusts in no doubt about the regulator’s expectations for pathology consolidation as part of a series of measures aimed at restoring financial control. All trusts were asked to send a two-page note for pathology services for their sustainability and transformation (STP) footprint to NHSI by 31 July 2016, setting out:
So why did NHSI want outline plans by the end of July? NHSI has stated; 'given the financial challenges faced by NHS trusts, there is a need to accelerate delivery of these recommendations and to encourage trusts, through their sustainability and transformation plans, to actively pursue further consolidation of services. NHSI has also committed to provide a ‘template business case’ for STPs to help STPs assemble their case for consolidation by end of September 2016'. But what is required in a business case for consolidation? Having prepared a few using the 5 case model, here are my thoughts.
Strategic Case 1. A summary of the current situation including the recent history e.g. Pathology CIP performance, previous pathology transformation initiatives etc., and the rationale for the proposed change; 2. A set of Board agreed commercial principles setting the boundaries of expectations; Economic Case 3. A complete understanding of the financial and activity baseline. This is the reference point for all comparisons and is essential to get right; 4. A range of options. E.g. partnering with a neighbouring Trust, either informally or as a contractual joint venture, forming an incorporated pathology joint venture with one or more partners, or pure outsourcing. 5. Qualitative evaluation of options against criteria based on the commercial principles; 6. Quantification of costs and benefits of each options; 7. Quantification of risk for each option; Commercial Case 8. For the preferred option, the proposed high level contractual and commercial terms; 9. The preferred procurement route (if required); Financial Case 10. For the preferred option and the do nothing / do minimum option, forecast costs over the life of the proposed arrangement, and hence savings of the preferred option compared to do nothing / do minimum; 11. Sensitivity analyses to test the robustness of the preferred option against various downside scenarios; Management Case 12. Setting out the planned project management and governance arrangements to make the preferred option happen. Please get in touch if you would like to discuss your pathology business case requirements. You may also be interested in my previous blog on pathology outsourcing and joint ventures, available here.
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Mark Magrath MBAI am a management consultant with 12 years experience as an executive director in an NHS Foundation Trust, including 10 years as Deputy Chief Executive. I only write blogs on projects and assignments that I have personally led. My aim is to write amazing content that combines real world experience with insightful advice. Categories
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August 2021
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