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101213_Rotherham_Fast_Track_FINAL

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									Cooperation and Competition Panel

Fast-track report



Merger of NHS Rotherham’s provider services arm and (i) Rotherham NHS
  Foundation Trust; and (ii) Rotherham, Doncaster and South Humber
  Mental Health NHS Foundation Trust



16 December 2010



29 September 2010
EXECUTIVE SUMMARY
1. NHS Rotherham is proposing to merge parts of the Rotherham Provider Services business with (i)
   Rotherham NHS Foundation Trust (the Rotherham NHS Foundation Trust Transaction); and (ii)
   Rotherham, Doncaster and South Humber Mental Health NHS Foundation Trust (the Rotherham
   Mental Health Transaction). Together the Rotherham NHS Foundation Trust Transaction and the
   Rotherham Mental Health Transaction are referred to as the Transactions.

2. We received assurances from NHS Rotherham and Rotherham NHS Foundation Trust,
   concerning the protection of the GP gatekeeper role. Our advice to Monitor is that the
   Transactions are consistent with Principle 10 of the Principles and Rules for Cooperation and
   Competition (Principles and Rules).

3. Rotherham Provider Services provides the majority of community services in Rotherham. The
   organisations being transferred have a projected combined income from NHS Rotherham for
   2010/11 of approximately £33.8 million. As a result of the Transactions, Rotherham NHS
   Foundation Trust, and Rotherham, Doncaster and South Humber Mental Health NHS Foundation
   Trust will provide the services currently provided by Rotherham Provider Services, pursuant to
   the standard form NHS contract for community services (for the period 1 April 2011 to 31 March
   2014).

4. The CCP has carried out an assessment using the screens set out in its fast-track guidelines. We
   concluded that the number of credible bidders for community services contracts within, or in
   PCT areas adjacent to, NHS Rotherham meant that the Transactions are unlikely to have a
   material adverse impact on patient choice and competition.

PARTIES
5. Rotherham Provider Services is the community services provider arm of NHS Rotherham and had
   total operating costs in 2009/10 of £53.5 million. NHS Rotherham has a population of
   approximately 252,000. Rotherham Provider Services is contracted to provide almost all of
   Rotherham PCT’s community services in Rotherham.

6. Rotherham NHS Foundation Trust is an acute NHS Foundation Trust providing a wide range of
   health services to the people of Rotherham. In 2009/10 Rotherham NHS Foundation Trust had
   an operating income of around £178.7 million. Rotherham NHS Foundation Trust is registered
   with the Care Quality Commission (CQC) with no conditions.

7. Rotherham, Doncaster and South Humber Mental Health NHS Foundation Trust provides mental
   health, substance misuse and rehabilitation services to people living in Rotherham, Doncaster
   and North Lincolnshire. In 2009/10 Rotherham, Doncaster and South Humber Mental Health
   NHS Foundation Trust had an operating income of £114.3 million. Rotherham Mental Health and
   Social Care is registered with the Care Quality Commission (CQC) with no conditions.




                                              2|Page
TRANSACTION
8. It is intended that the majority of the Rotherham Provider Services business (as specified in
   Appendix 1) will transfer to Rotherham NHS Foundation Trust with effect from 1 April 2011. The
   Heads of Terms, agreed between NHS Rotherham and Rotherham NHS Foundation Trust in
   respect of a transfer agreement, were entered into on 4 November 2010.

9. It is intended that certain Mental Health, Learning Disability and Children’s Services (as specified
   in Appendix 2) will transfer to Rotherham, Doncaster and South Humber Mental Health NHS
   Foundation Trust with effect from 1 April 2011. The Heads of Terms, agreed between NHS
   Rotherham and Rotherham, Doncaster and South Humber Mental Health NHS Foundation Trust
   in respect of a transfer agreement, were entered into on 8 November 2010.

10. The Heads of Terms relating to the Transactions set out that the combined organisations will
    provide community services under a Department of Health standard form NHS contract for
    community services (the service lines and value of service lines that are to transfer are set out in
    Appendices 1 and 2) for a three year term.

11. No land or buildings are to transfer pursuant to the Transactions. The organisations intend to
    enter into leases, underleases or memoranda of occupancy to enable services to continue to be
    delivered from all of the properties currently used to provide the services.

APPLICATION OF THE PRINCIPLES AND RULES AND THE FAST-TRACK SCREENS
12. The Transactions comprise two mergers for the purposes of a CCP review. As a result of the
    Transactions, Rotherham NHS Foundation Trust and Rotherham, Doncaster and South Humber
    Mental Health NHS Foundation Trust will acquire community services provider businesses
    currently managed by Rotherham Provider Services. Following notification of the Transactions,
    we decided the Transactions fell within the CCP’s remit. Specifically:
        i. the proposed arrangements fall within the scope of Principle 10 of the Principles and
             Rules;
        ii. the CCP is the most appropriate body to consider this matter;
        iii. the parties have made available the relevant and applicable information on the case to
             the CCP; and
        iv. the turnover threshold is satisfied as the combined entity in each case will exceed the
             relevant threshold of £35 million.

13. In addition, the CCP has decided that the Transactions are suitable for its fast-track procedure
    pursuant to its fast-track guidelines.1 That is:
        i. there are at least four large NHS community services providers (including the merged
            organisation) located within, or in PCT areas adjacent to, each of the areas affected by




1
    The CCP’s fast-track guidelines are available at www.ccpanel.org.uk

                                                                   3|Page
                        the Transactions (the large NHS community service providers in this part of the Yorkshire
                        and the Humber are shown in Figure 1); 2
                   ii. the Transactions do not involve the transfer of GPs, or services where there is a material
                        referral relationship that is not adequately safeguarded (in this case NHS Rotherham and
                        Rotherham NHS Foundation Trust have provided assurances to the CCP that will
                        preserve or enhance choice for patients accessing acute elective care via community
                        services (see appendices 3 and 4));
                   iii. there are no material questions about the acquiring organisations’ clinical or financial
                        capabilities (see paragraphs 6 and 7); and
                   iv. the CCP did not identify any novel issues of general interest requiring more detailed
                        analysis.

                                                   FIGURE 1
              Map of large NHS Community Services Providers (Rotherham PCT area), post Transactions




                                                         
                                                                                        



                                                                       

                                                                                                    


                                                           


           Name of large NHS community services provider (including
                  the merged organisation) located within, or in PCT
                             areas adjacent to Rotherham PCT area                  PCT area in which the provider supplies community health services


1.         Rotherham NHS Foundation Trust /Rotherham, Doncaster                                                                       Rotherham PCT
                         and South Humber NHS Foundation Trust
2.                                        Sheffield Provider Services                                                                    Sheffield PCT
3.                                     Barnsley Care Services Direct                                                                     Barnsley PCT
4.                                      Doncaster Provider Services                                                                    Doncaster PCT
5.                                      Bassetlaw Provider Services                                                                    Bassetlaw PCT
6.                           Derbyshire Community Health Services                                                                     Derbyshire PCT
     Source: CCP analysis




       2
        In line with the CCP’s fast-track guidance, we use the term ‘large NHS community services providers’ to identify those NHS providers
       which have experience of providing a wide range of community health services in their ‘local’ PCT area. Currently these are generally PCT
       provider arms, but over time it may increasingly include other organisations, such as: mental health trusts, acute trusts, social enterprises
       and community foundation trusts. An adjacent PCT area is one which shares a land border (or can easily be accessed via tunnels or
       bridges) with the area(s) affected by the merger.

                                                                        4|Page
ANALYSIS UNDER FAST-TRACK PROCEDURE
14. We accepted this case on 3 December 2010, published a notice to this effect on our website on
    that date, and invited submissions by interested individuals or organisations. We have
    completed our fast-track report within the timeframe set out in the fast-track guidelines.

15. As with all fast-track cases, we contacted the relevant LINk patient representatives (in this case
    for Rotherham). The Rotherham representative did not raise any concerns about the potential
    impact of the Transactions on patient choice and competition. We have not received any other
    submissions which suggest that this case is not appropriate for the CCP’s fast-track procedure.

16. Under Principle 10 of the Principles and Rules, mergers should not undermine the GP gatekeeper
    function. The CCP considers that the gatekeeper function is the GP’s role as:
        i. a first point of care before secondary care can be accessed by patients; and
        ii. an informed and impartial adviser who determines when secondary care is needed and
            offers patients advice on available choices at that stage.

17. The merger of a community health services provider with an acute elective care provider could
    undermine the gatekeeper function because, where there are referrals from community care to
    acute care, the healthcare professional who refers the patient for acute elective care is an
    employee of the merged organisation. The incentive to refer within that employee’s own
    organisation depends on capacity, tariff and costs relative to tariff.3 The CCP has concluded in
    previous cases that, in the absence of commitments to the CCP, patient choice is likely to be
    adversely impacted.4 Assurances to the CCP on this issue have been provided by NHS Rotherham
    and Rotherham NHS Foundation Trust; these are attached at Appendices 3 and 4.

18. Our review of the Transactions, and our advice and recommendations in relation to them, fall
    within the broader regulatory framework for transactions within the NHS overseen by the
    Secretary of State for Health and Monitor in relation to Foundation Trusts. Monitor will consider
    our advice and recommendations in relation to the Transactions.

19. We have used the fast-track procedure to reach a view on whether the Transactions are
    consistent with Principle 10 of the Principles and Rules. We have not reviewed, for consistency
    with the Principles and Rules, the process by which Rotherham NHS Foundation Trust and
    Rotherham, Doncaster and South Humber Mental Health NHS Foundation Trust were selected as
    the preferred partners for Rotherham Provider Services. Pursuant to the CCP’s terms of
    reference, to the extent that this process gives rise to any procurement questions, the CCP will
    consider these questions only on appeal from the SHA’s dispute resolution process; to the extent
    that it gives rise to any conduct issue(s), a complaint must be made to the CCP before it can
    investigate.




3
  Additional explanation of this point is available in the CCP report on the merger of Buckinghamshire PCT’s provider services arm with
Buckinghamshire Hospitals NHS Trust (paragraphs 81 to 86). This report is available at www.ccpanel.org.uk.
4
  See the CCP’s reports on the mergers of Croydon PCT and Mayday Healthcare NHS Trust; Buckinghamshire PCT’s provider services arm
with Buckinghamshire Hospitals NHS Trust; and NHS Lewisham's provider services arm with Lewisham Hospital NHS Trust. Reports on all of
these cases are available from www.ccpanel.org.uk.

                                                              5|Page
20. Responsibility for the selection of Rotherham NHS Foundation Trust and Rotherham, Doncaster
    and South Humber Mental Health NHS Foundation Trust as the acquirers of parts of Rotherham
    Provider Services and responsibility for the commissioning of community services in Rotherham
    following the Transactions will remain with NHS Rotherham as the commissioner. In relation to
    service quality, NHS Rotherham, Monitor and the CQC are responsible for continuously
    monitoring health care providers to make sure they are meeting essential standards.

ADVICE AND RECOMMENDATIONS
21. Following the receipt of assurances from NHS Rotherham and Rotherham NHS Foundation Trust,
    concerning the protection of patient choice in acute services after the completion of the
    Rotherham NHS Foundation Trust Transaction we consider that there is likely to be sufficient
    patient choice and competition in the areas affected by the Transactions. Accordingly, we
    conclude that the Transactions are consistent with Principle 10 of the Principles and Rules.

22. The advice and recommendations set out in this report have been given by the CCP on the basis
    of information it has received to date. Should there be any material change in respect of the
    terms of any of the Transactions we expect the parties to re-refer the matter to us for further
    consideration.

   16 December 2010




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                                                                                                       Appendix 1


COMMUNITY SERVICES PROVIDED BY ROTHERHAM PCT AND TRANSFERRING
TO ROTHERHAM NHS FOUNDATION TRUST
                                                                                                        (£)
Income by Service 2010/11
        Child Health Department                                                                    176,635
        Health Visiting Service                                                                   2,548,115
        School Nursing Service                                                                    1,125,591
        Children's safe guarding Unit (health)                                                     222,368
        Physiotherapy Services                                                                     489,546
        Occupational Therapy Services                                                              260,164
        Speech and language Therapy Services                                                       761,884
        Child Development Centre                                                                   897,291
        Complex Health Needs Team                                                                  992,098
        Audiology                                                                                   28,728
        Dietetics                                                                                   67,376
        Orthoptics                                                                                  77,707
        Healthcare Standards, Quality and Performance Team                                        1,162,636
        Fast Response Team / Counselling, Assessment, Referral Advice, Throughcare                1,123,932
        Intermediate Care Service including residential, community and Day rehab services           20,767
        Advanced Nurse Practitioners - Care Homes / Care Home Liaison Service                      532,773
        Community Nursing service (includes community matrons, district nurses, Long Term Care    6,426,103
            team)
        Consultant Community Physician                                                             166,990
        Diabetes Centre and Specialist Nurse Team                                                  401,331
        Community Physiotherapy Domiciliary                                                        413,871
        Community Occupational Therapy Service                                                      31,974
        Rotherham Equipment and Wheelchair Service                                                1,143,160
        Breathing Space                                                                           2,107,793
        Cardiac Rehabilitation Service                                                             311,755
        Wheelchair Service                                                                         139,410
        GPs with special interest Dermatology                                                       89,240
        GPs with special interest Minor Surgery                                                     31,527
        Orthopaedic Triage                                                                         343,833
        Phlebotomy Service                                                                          85,127
        Primary Ear Care Service and nurses with specialist interests triage (audiology)           308,136
        Community Dental Service (Rotherham, Barnsley, Doncaster)                                 1,062,570
        Physiotherapy Service Musculoskeletal                                                      510,724
        Podiatric Service                                                                          952,721
        Podiatric Surgery                                                                          312,053
        Speech and Language Therapy (Adults)                                                       236,967
        Continence Advisory Service                                                                670,685
        Lymphoedema Service                                                                        132,490
        Tuberculosis Specialist Nurse                                                               45,879
        Tissue Viability Service                                                                   167,504
        Manual Handling Coordinator                                                                 18,188
        Specialist Therapy Service                                                                  58,389
        Rotherham NHS Stop Smoking Service                                                         611,810
        GPs with special interest Vasectomy                                                        802,418
Total                                                                                            28,070,259


                                                                    7|Page
                                                                                                      Appendix 2


COMMUNITY SERVICES PROVIDED BY ROTHERHAM PCT AND TRANSFERRING
TO ROTHERHAM, DONCASTER AND SOUTH HUMBER MENTAL HEALTH NHS
FOUNDATION TRUST

                                                                                                       (£)
Income by Service 2010/11
        Primary Care Mental Health Team                                                          1,477,462
        Single Point of Access                                                                    104,667
        Support Therapy, Education & Prevention Service - (STEPS)                                 472,047
        Psychiatry for Learning Disability / Mental Health                                        363,730
        Assessment and Treatment Unit                                                            1,403,207
        Community Nursing Team                                                                    247,781
        Intensive Community Support team which includes; Psychology, Art Therapy, Occupational    344,354
             Therapy and Nursing Staff.
        Health Support Team                                                                       240,123
        Learning Disabilities Care Costs                                                          449,867
        PLD Administration                                                                        140,526
        PLD Hotel Services                                                                          6,761
        PLD Physiotherapy & Occupational Therapy                                                  527,603
Total                                                                                            5,778,128




                                                                    8|Page
                                                                                         Appendix 3


ASSURANCES PROVIDED BY NHS ROTHERHAM
1. NHS Rotherham (The PCT) now provides the CCP with these Assurances for the purpose of
   mitigating any adverse effects on patients and taxpayers which it may determine exist in relation
   the proposed Transaction. The Assurances shall take effect on completion of the Transaction.

       i.     The PCT will monitor and analyse actual patient attendances by specialty, trust, GP
              practice and category of referrer, compared with previous time periods, examining
              changes in patterns accordingly.
       ii.    The PCT will also monitor the referrals flowing through the Choose and Book system.
       iii.   The PCT will monitor the quality of choice being offered and to do so use patient
              experience information from patient surveys, both national and local, and information
              from their Patient Advice and Liaison Service and Local Involvement Networks as further
              sources of information.
       iv.    As new integrated pathways are developed, the PCT will include in its specification the
              point at which choice must be offered and who will offer the choice. This will almost
              always be through the GP. If pathways do arise which do not use the GP, then special
              monitoring arrangements will be put in place, including monitoring data from Choose
              and Book, and specific patient surveys of patients’ perception of the choices they were
              offered.
       v.     If there is any indication that the merged organisation is not offering choice
              appropriately, then there will be a further investigation, which can include a specific
              patient survey, and further analysis of the data. Mechanisms are in place through the
              contract to ensure that performance improves, including the issue of a performance
              notice and ultimately the termination of the contract.

2. The PCT will store this information in such a way as to ensure it can be provided to the CCP
   and/or NHS Yorkshire & the Humber in a timely and clear manner and will provide such
   information upon request from either organisation.

Compliance

3. In the event of a suspected breach of the Assurances, any interested party may ask the CCP to
   investigate. If the CCP finds that there has been a breach of the Assurances, it may advise NHS
   Yorkshire & the Humber to require the PCT to comply with the Assurances. The PCT will comply
   with such written directions as NHS Yorkshire & the Humber may from time to time give for the
   purpose of securing compliance with the Assurances.

4. The PCT shall cooperate fully with The Rotherham NHS Foundation Trust (the NHS Trust), the
   CCP and NHS Yorkshire & the Humber when any of these organisations is either monitoring
   compliance with the provisions of the Assurances or investigating potential breaches of the
   provisions of the Assurances.




                                                9|Page
                                                                                     Appendix 3


Provision of information

5. The PCT will furnish promptly to the CCP, the NHS Trust or NHS Yorkshire & the Humber such
   information as any of these organisations consider necessary to enable them to monitor the
   Assurances.

Material change of circumstances

6. In the event of a material change of circumstances, the PCT may ask the CCP to vary these
   assurances. The CCP may make any variations which it considers appropriate following a request
   from the PCT.

Interpretation

7. For the purposes of the Assurances:

    “Assurances” means the assurances contained in this document;
    “CCP” means Cooperation and Competition Panel;
    “Choose and Book System” means a system offering a service that allows patients to choose
        their hospital or clinic and book an appointment with a specialist;
    “The Rotherham NHS Foundation Trust” means the NHS Trust;
    “PCT” means NHS Rotherham; and
    “Transaction” means proposed transfer of the provider services arm of NHS Rotherham to The
        Rotherham NHS Foundation Trust.


Yours sincerely



ANDY BUCK
Chief Executive, NHS Rotherham




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                                                                                             Appendix 4

ASSURANCES PROVIDED BY ROTHERHAM NHS FOUNDATION TRUST

1. The Rotherham NHS Foundation Trust NHS Trust (the NHS Trust) on behalf of itself and Rotherham
   Community Health Services (the Merged Organisation) now provides the CCP with the Assurances
   for the purpose of mitigating the adverse effects on patients and taxpayers which it may determine
   exist in relation the Transaction. The Assurances shall take effect on completion of the Transaction.

       i.   The Merged Organisation will comply with The Primary Care Trusts (Choice of Secondary
            Care Provider) Directions 2009 and the NHS Constitution (dated 8 March 2010) and any
            superseding legislation or Department of Health guidance, which enshrine the rights of a
            patient to choose his/her provider of acute elective care.
       ii. The Merged Organisation will ensure that it implements the Choose and Book System
            effectively.
       iii. When a patient in the care of a Healthcare Professional requires Treatment, that Healthcare
            Professional will, if referring the patient on for the Treatment, provide the patient with an
            appointment letter which:
                a. informs the patient that he/she has the right to choose the hospital where he/she
                    will receive the Treatment;
                b. informs the patient that he/she does not have to choose to receive the Treatment at
                    The Rotherham NHS Foundation Trust;
                c. informs the patient that he/she can make an appointment with his/her GP in order
                    to receive advice and assistance on making arrangements for the Treatment;
                d. informs the patient about the NHS Choices website;
                e. offers to assist the patient to make the appointment for the Treatment using the
                    Choose and Book System; and
                f. provides the patient with an appointment reference number and a password so that
                    the patient can use Choose and Book his/herself if he/she chooses to do so.

2. Upon providing the patient with the appointment letter referred to in paragraph 1(iii) above, the
   Healthcare Professional will explain the contents of that letter so that the patient understands that
   he or she has a choice of date, time and hospital for the Treatment.

3. All Healthcare Professionals will receive training on NHS Choices and how to use the Choose and
   Book system. The Merged Organisation will keep records of which Healthcare Professionals have
   received training and the date(s) on which this has been provided. Healthcare Professionals who
   have not received appropriate training will not be permitted to refer patients for Treatment.

Compliance

4. In the event of a suspected breach of the Assurances, any interested party may ask the CCP to
   investigate. If the CCP finds that there has been a breach of the Assurances, it may advise NHS
   Yorkshire & the Humber to require the Merged Organisation to comply with the Assurances. The
   Merged Organisation will comply with such written directions as NHS Yorkshire & the Humber
   and/or NHS Rotherham may from time to time give for the purpose of securing compliance with the
   Assurances.


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                                                                                         Appendix 4

5. The Merged Organisation shall cooperate fully with the CCP, NHS Yorkshire & the Humber, and NHS
   Rotherham when any of these organisations is either monitoring compliance with the provisions of
   the Assurances or investigating potential breaches of the provisions of the Assurances.

Provision of information

6. The Merged Organisation will furnish promptly to the CCP, the PCT or NHS Yorkshire & the Humber
   such information as any of these organisations consider necessary to enable them to monitor the
   Assurances.

Material change of circumstances

7. In the event of a material change of circumstances the Merged Organisation may ask the CCP to vary
   the Assurances. The CCP may make any variations which it considers appropriate following a request
   from the Merged Organisation.

Interpretation

8. For the purposes of the Assurances:

    “Assurances” means the assurances contained in this document;
    “CCP” means Cooperation and Competition Panel, or, as applicable, any successor body;
    “Choose and Book System” means a system offering a service that allows patients to choose their
        hospital or clinic and book an appointment with a specialist;
    “Healthcare Professional” means any member of staff employed by the merged entity, who refers a
        patient for Treatment;
    “PCT” means NHS Rotherham;
    “Report” means the CCP’s advice to Monitor on the Transaction;
    “Transaction” means proposed transfer of the provider services arm of NHS Rotherham to The
        Rotherham NHS Foundation Trust; and
    “Treatment” means elective treatment in an acute setting.

Yours sincerely,


Brian James
Chief Executive




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