Appendix X: PEST and SWOT Analysis

Appendix X: PEST and SWOT Analysis

A. PEST ANALYSIS
A.1 POLICY AND POLITICS
A.1.1 Forces and drivers for change

Guidance from the Royal College of Surgeons of England, the Royal College of
Physicians of London, the British Association for Emergency Medicine, the Faculty of
Accident & Emergency Medicine of the Royal College of Surgeons in England and
the Academy of Medical Royal Colleges that:
• Emergency surgical services should be organised for a population of 450-
500,000
• The provision of comprehensive elective surgical care on a stand alone basis
by a DGH is not sustainable and should be replaced by a network of hospitals
serving populations of 500-600,000
• The ideal unit for fully comprehensive medicine and surgery is a hospital or
group of hospitals serving a population of 450-500,000
• The lowest catchment population for ‘district hospitals’ providing 24 hour
children’s services, 24 hour surgical services and maternity services as well
as acute medicine and surgery is 250,000
• ‘local hospitals’ serving a population less than 250,000 are unlikely to be able
to sustain 24 hour/emergency surgery or inpatient paediatrics or consultant
led obstetrics and may have to operate a ‘selected medical take’
• There should be no single handed consultants in any major subspeciality
• Smaller A&E units seeing less than 40,000 new patients per annum should be
supported where they are able to demonstrate their effectiveness, safety and
quality and where they serve geographically isolated populations
• The above changes will be triggered by a lack of medical manpower following
on from the introduction of the EWTD.

West Midlands SHA has identified that paediatrics, maternity, A&E and emergency
surgical services within the region are ‘challenged’ (Investing for Health Chapter 6)

DoH policy emphasising the shift towards greater levels of care being provided by
primary and community care providers or in a community setting

Growing recognition at national level that set against the advice of a range of
professional bodies and DoH policy that traditional models for the organisation and
management of local health economies are increasingly outdated and that central
government has a role in brokering the necessary structural change

DoH policy emphasising more aggressive management of chronic disease/long term

conditions

Roll out of Patient Choice

Roll out of Practice Based Commissioning

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Creation of competitive market for NHS funded healthcare (evidenced by four sets of
overlapping changes: creation of a new regulatory framework; transfer of
responsibility for service provision from government to Foundation Trusts and the
granting of private sector providers equal status with FTs; reduction in the constraints
on capacity (and hence competition) represented by a limited supply of medical
staffing; empowerment of patients through Choose & Book and the introduction of a
tariff based reimbursement system for providers)

Entrance of private sector into market for NHS funded healthcare

Establishment of Foundation Trusts and acquisition by FTs of NHS Trusts unable to

demonstrate viability

Increasing regulatory burden

Policy differences between NHS England and NHS Wales

Investment by the DoH in the development of “world class” commissioning

Potential establishment of a Public Services Trust by Herefordshire PCT and

Herefordshire Council

Impact:

HHT needs to adopt a strategy based on a clear recognition and understanding of

the ‘dogbone effect’. This is the phenomenon whereby smaller secondary care
providers lose services or referrals to larger secondary/tertiary providers with the
necessary critical mass/able to meet increasingly stringent quality standards on the
one hand and to primary and community care providers on the other.

A number of services provided by HHT – specifically A&E, obstetrics, paediatrics and

emergency surgery – are vulnerable.

The management of the challenges posed by the ‘dogbone effect’ and the
vulnerability of core DGH services needs to be put in the context of the introduction
of a market for NHS funded healthcare characterised by patient choice and
competition between providers, of a recognition that changes to the traditional
structures of healthcare economies are in some instances both necessary and
desirable and of a new commissioning regime.

HHT cannot expect to be shielded from the challenges facing it. Survival as an
independent organisation is not guaranteed. The organisation needs to ‘reinvent’

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itself and develop and implement a strategy which allows it to ‘punch above its
weight’.

A.1.2 ECONOMICS
Forces and drivers for change:

Reduced levels of NHS growth 2008/9 onwards

Roll out of Payment By Results and reduced real terms income per HRG

High costs of capital

High costs of labour

Reducing costs of some new technologies

Increasing costs of drugs and therapeutics

Increasing costs of litigation

Impact:

HHT needs to put in place systems, structures and processes to support cost
containment and improved productivity

Investments made in services or infrastructure need to provide the maximum return

on investment. HHT needs to become ‘smarter’ in the way it invests in new
technologies

The costs of poor quality (and the centrality of quality in the operation of the market)
will force a more aggressive approach to the management of quality

1. SOCIETY

Forces and drivers for change:

Demography: an increase in the proportion of older people within the population, in

the absolute numbers of older people and in the numbers living alone

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Epidemiology: increased prevalence and incidence of obesity and diabetes

Increased mobility

Demand for local access to services in a rural area with a scattered population

Increasing public expectations

Immigration into Herefordshire by EU migrant workers

Continuing problems in recruiting key staff

Impact:

HHT needs to develop an overarching model of care which recognises the unique
combination of challenges posed by local demography and geography, a more
demanding ‘customer’ who is able to access other providers

HHT needs to understand and respond to the needs and wants of migrant workers

HHT needs to ensure that it is seen in the labour market as an attractive employer.
Failure to attract ‘mission critical’ staff (or failure of the education system to ensure
an adequate supply of trainees) will potentially accelerate the ‘dogbone effect’

A.1.3 TECHNOLOGY

Forces and drivers for change:

Increasing complexity of hospital care

Increased levels of subspecialisation within the traditional taxonomy of secondary

care services

Changes in clinical practice: shorter lengths of stay; increased levels of day surgery

Increased volumes of care traditionally provided by secondary care providers now

provided by primary and community care providers

Increased volumes of secondary care traditionally provided in an institutional setting

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now provided in a community setting

Increased volumes of ‘hi tech’ secondary care now being referred to tertiary care
providers

Increased use of standard care protocols

Introduction of new technologies (eg genetic technologies) resulting in therapeutic

rather than surgical interventions, delivery if ‘hi tech’ care in a ‘lo tech’ setting

Increased mobility/miniaturisation of diagnostic equipment

Continuing advances in IT

Impact:

Alongside HR, technological change will potentially accelerate the ‘dogbone effect’.
‘Technological change’ in this context includes both ‘soft’ technologies
(subspecialisation and changes in clinical practice) and ‘hard’ technologies (new
equipment).

HHT needs to support the delivery of (demonstrable) high quality care through
increased use of formal protocols and pathways

New technologies offer the potential to support decentralisation and the extension of
the HHT service portfolio

The potential benefits of current investment in IM&T needs to be maximised

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B. SWOT ANALYSIS

B.1 STRENGTHS

Themes and supporting evidence:

THEME EVIDENCE

Key ‘internal’ strengths

are:

New, skilled and

Self diagnosis
experienced Executive
Management Team

HHT is a small, single site
provider
2007/08 income totalled £Xm; HHT operates from the
County Hospital site in Hereford City. Although
ambulatory care is provided in community settings
across Herefordshire and Powys, these community
facilities are neither owned nor operated by HHT

Increasing expertise in LEAN has been applied to the following services ALAN
service DAWSON TO NAME. The lead Clinical Systems
redesign/productivity Engineer for the Trust has a PhD in this subject
improvement/LEAN

Clinician enthusiasm for

Outputs from clinical strategy workshops
Service Line
Reporting/decentralisation
of decision making

An increasing recognition Outputs from Executive Management Team, Strategic

across the organisation Forum and Great Escape meetings/events
that ‘good housekeeping’
needs to be replaced by
organisational
transformation
Key ‘external’ strengths
are:
Consistent delivery of
access targets/compliance PETER GORIN TO INSERT
with core Standards for
Better Health

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Relative efficiency HOWARD ODDY TO INSERT (06/07 RCI of 95)

Provision of a broad range Self diagnosis

of secondary care/DGH
services

Modern hospital
environment The ‘new’ County Hospital was opened in YEAR???

High levels of ‘ownership’ Feedback from GPs, Members, OSC, MPs and other
of and identification with stakeholders
the County Hospital
amongst local residents

Supportive local media

Cuttings archives/support for FT application process

Implications:

HHT has the necessary ‘ingredients’ for success

Internally, it has an effective management team, it is free of the complexities resulting

from large size or split site working, it has buy in from the clinical teams, it recognises
the need to change clinically and has the technical skills set to do this.

Externally, the Trust is able to evidence compliance with core Healthcare

Commission standards, relative efficiency, a range of services consistent with its role
as a ‘local’ District General Hospital, modern facilities, a supportive/loyal customer
base and a positive media image

B.2 WEAKNESSES
Themes and supporting evidence

THEME EVIDENCE

Key ‘internal’
weaknesses are:

Under-appreciation of the
Outputs from clinical strategy workshops
threat to the organisation
represented by PEST
analysis

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Structure that is not ‘fit for Outputs from clinical strategy workshops
purpose’

Systems and processes

Self diagnosis
that are not ‘fit for purpose’
– planning, financial and
performance management

Lack of change Self diagnosis

management
capacity/capability

Poor quality operational,

clinical and planning Self diagnosis
information; inadequate
IM&T systems

PFI financed facilities:high Treasury (October 2007) put HHT PFI charge 2008/9
fixed costs; inflexibility in £12.6m or 13.4% of 2006/7 turnover; this percentage
use of facilities cited a third highest of all PFI schemes in NHS England

Historic dependency on
non-recurrent measures to HOWARD ODDY TO INSERT…
deliver financial targets

Poor track record in the

delivery of CIPs/ failure to
deliver target CIP and HOWARD ODDY TO INSERT…
surplus in 2007/08

Limited knowledge of
profitability of individual JOHN HOWDEN TO INSERT…
service lines

‘Mixed’ track record in the

recruitment and retention
of high quality staff Self diagnosis

Lack of a market driven

business culture at the Feedback from Birmingham and Black Country SHA on
middle management and HHT wave 3a FT application
across the clinical teams

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Historical lack of ambition

and willingness to self-
promote

67 ‘general and acute’ beds (30% of general and acute

Key ‘external’
bed stock) accommodated in hutted wards
weaknesses are:

Average bed occupancy level is c.98%. INSERT

Continued used of three
LATEST PERFORMANCE DATA ON LEVELS OF
WWII ‘temporary’ wards
EMERGENCY ADMISSIONS AND ACTUAL V
CONTRACT ON ELECTIVE ACTIVITY
High occupancy levels
resulting from high levels
of emergency admissions
and hence a negative INSERT LATEST PERFORMANCE DATA
impact on elective
capacity

ALAN DAWSON TO INSERT…

High levels of cancelled
operations

Continuing problems in the Insert latest performance data

delivery of 18 week RTT
times
ALAN DAWSON TO INSERT…

High levels of HCAIs

Outputs from clinical strategy workshops

Sub-optimal stroke care

Over-centralisation of
ambulatory care services
on the County Hospital Comparative data from Healthcare Commission website,
site Dr Foster Good Hospital Guide and NHS Choices
website
Inconsistency in service
quality/lack of clear quality
USP (eg faster access
times)/provision of a lower
quality service than
Gloucestershire Hospitals
NHS Foundation Trust Feedback from GPs
(HHT’s main competitor)

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Poor standard of customer

care to GPs

Implications:

HHT’s potential success could be compromised by a mixture of ‘internal’ and

‘external’ weaknesses.

The organisation needs to develop and execute an Organisational Development

programme which delivers an organisation that is ‘fit for purpose’ and addresses
systems, structure, strategy, skills, staff. shared values and style (ie all elements of
the McKinsey 7S model)

The Trust also needs to ensure that it engages with its customers, develops and
implements a more attractive model of care and delivers tangible improvements in
quality thus enabling it to differentiate itself from its competitors. Specifically, HHT
needs to reprovide the hutted wards, ‘protect’ the flow of elective patients, adopt a
zero-tolerance approach to infection prevention and control and ‘fill’ any gaps in
service provision

B.3 OPPORTUNITIES

Themes and supporting evidence:

THEME EVIDENCE

Expansion into the eastern Market analysis

part of central Wales
through ‘codification’ of
relationship with Powys
LHB, development of
ambulatory care services
at Llandrindod Wells
community hospital and
post ‘downgrading’ of
Nevill Hall Hospital

Capture of an increased
percentage of market on
the ‘borders’ between
Herefordshire, Market analysis
Gloucestershire,
Worcestershire and
Shropshire

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Diversification eg
acquisition of PCT
Market analysis
provider arm services,
social care, primary care
support (diagnostics,
accommodation etc),
niche services (terminal
care, lifestyle services,
chronic disease
management etc)

Implications:

HHT has opportunities to expand into eastern Wales and increase its share of the
local NHS England along the ‘borders’ with Gloucestershire, Worcestershire and
Shropshire. It also has a number of opportunities to diversify.

B.4 THREATS

Themes and supporting evidence:

THEME EVIDENCE

Relatively small size of Herefordshire’s resident population totals X; the

HHT catchment population
and vulnerability of some
services
catchment population of Powys covered by HHT totals Y
The report of the Academy of Royal Colleges ‘Acute
health care services – report of a working party’
(September 2007) and WMSHA’s strategic framework
‘Investing for Health’ (September 2007) identified
paediatrics, obstetrics, A&E and emergency surgery as
potentially vulnerable

Failure of commissioners Lack of up-to-date commissioning strategies which

to articulate clear strategy inform LDP negotiations
for local health
economy/economies

The replacement of a ‘cost = price’ system with a fixed

Cost pressures resulting
tariff based system has resulted in HHT being exposed
from lack of critical mass
to a range of cost pressures in services which the costs
and operation in a tariff
of delivering a safe/high quality service exceed tariff
based market
based income

Higher co-morbidity of an

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older catchment Age profile of HHT’s catchment population and patient

population resulting in workload
higher costs potentially
Distance from optimum ALOS and day surgery rates
exceeding tariff income
Historical financial performance of HHT

Ineffective joint working

across the Herefordshire
health and social care Insert latest data on delayed discharges and n:f/up
system resulting in HHT ratios (versus PCT target of 1:1)and inappropriate
effectively cross- referrals
subsidising provider
agencies

Lack of political support

within NHS Wales for use
of English provider
+MARTIN WOODFORD TO INSERT…

Patient Choice,
commissioner preferences
and competition from local
private sector and
Gloucestershire NHS Market analysis
competitors resulting in
reduced market share
along the ‘borderlands’
and within HHT’s ‘core’
catchment area

Establishment of an
aggressive community
service provider able to Market analysis
‘cherrypick’ lo tech
outreach and/or diagnostic
work

Development by Practice
Based Commissioning
Groups of primary care Market analysis
based alternatives to HHT
services

Implications:

HHT’s potential expansion could be compromised by the loss of vulnerable services

and a combination of issues relating to critical mass, the increased costs associated

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with delivering services to a small catchment population in a rural setting and the
overall effectiveness of the local health and social care system

The Trust’s main commissioners have yet to confirm their strategic intentions. The
new administration in Wales has signalled that it wishes to minimise/terminate the
use of English providers.

The organisation is vulnerable to competition from Gloucestershire Hospitals NHS

Foundation Trust, new market entrants able to ‘cherrypick’ lo tech cases and the
transfer of care from a hospital into a primary care setting.

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