Health and Social Care Sector

Health and Social Care Sector

Dean Jones, Associate Programme Manager - Programme Leadership, Consulting

Transition Programme Manager Client / Employer embarked on an exciting journey to design, build, commission and operate new care homes across the UK

2012

2012

- Programme represented over ÂŁ250m of investment - The Scale of growth demanded repeatable systems - Project management not a core capability - Private equity investor needed more assurance

2014

2013

2015

2014

2016

2015

2017

Franchise Approach - Programme Manage pipeline of New Builds - Provide project management expertise - Support Best Practice through the development and implementation of various toolkits - Blueprint - How to manage projects - Launch Manual – How to launch new homes - SOP - Standards expected when operational - Implemented a cost effective project system to improve collaboration, organisation and transparency

Launch Manual

“Scalability and replication will become the building blocks that will enable REC providers to sustain growth and achieve high quality standards “

Project Management Blueprint

SOP

Project Lifecycle Programme Lifecycle

PROGRAMME MANAGEMENT Commissioning Operational Readiness

Start Up Operate New Home

HR Clinical Governance Sales

Maturity

Standards Achieved

Commercial Team

PR & Marketing Property Pre Day 1

Project Management Consult and engage with Operations regarding key decisions

Day 1 – X months

X mths

X mths

Post Operational Reviews Transfer Accountability to Operations Handover to Core Business

Project Management System - Implemented a cost effective project system to improve collaboration, organisation and transparency

Past and Present Transition Programme Manager Client / Employer embarked on an exciting journey to design, build, commission and operate new care homes across the UK

Opened 7 new care homes

2012

2012

- The Programme represented over ÂŁ250m of investment - Scale of growth demanded repeatable systems - Project management not a core capability - Private equity investor needed more assurance

Opened 7 new care homes

2014

2013

- Increase clients total number of homes by circa 35%

2015

2014

Opened 5 new care homes (60m Investment)

2016

2015

Opened 6 new care homes (60m Investment)

2017

REC Sector

#2

Residential Elderly Care (REC) Uk Sector The UK Elderly care sector includes the following care categories:

There is currently over

21,500 nursing, residential and care homes in the UK.

Elderly Physical disability Dementia

The Cost of UK REC Within the total REC sector:

• the private sector provides over 381,000 beds (approx. 78% of total provision) • Generates over £11.2 billion revenues The residential market is expected to reach £44billion in 2040 with the private setting contributing to 91% of revenues.

Public Public

Private

Market Drivers

#4

REC Key Market Drivers

KEY TRENDS

“REC remains an attractive sector for both lenders and investors alike. The sector benefits from the strong demand drivers of an ageing population�

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Ageing UK population Increase in dementia Increase in long term LA transfers A trend towards consolidation Increased managed care homes businesses Growing consumer expectations for goods and services

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Growing need to replace or upgrade outdated care homes Growing need for more affordable care homes Immature Population Health Management Escalating regulatory intervention

REC Past, Present and Future Key trends that will affect how REC is delivered - Healthcare is projected to increase project management roles by 30 percent – the highest growth rate of any projectintensive industry between 2010 & 2020.

PMI Industry Growth Forecase 2010

- Tougher Care Quality Commission (CQC) strategies - Continuing issue long term residential care services are expensive, both for individuals and the government.

2012

2010 - Total REC bed capacity of 488,000 has increased over 5 years by 16,000 beds (+3%) driven by: Private sector growth of 34,000 beds (+10%) to 381,000 beds and LA and NHS reduction of 19,000 beds (-33%) to 39,000 beds - People living longer, but not necessarily in good health. Men are now living to an average age of 78.8 years. Average female life expectancy is 82.8 years - Around 430,000 elderly and disabled people live in longterm residential care in the UK

- Rising National Minimum Wage (NMW) will adversely affect REC operators as wages are very closely linked to NMW and typically represent 49% (residential care) to 57% (nursing care) of revenues.

- Possible cap on the UK’s immigrant workforce community - Fee growth rising despite on-going economic climate with LAs seeking to avoid Judicial Review (JR) challenges by acceding to reasonable annual base fee rate increases

2015

2014

- LA/NHS beds reducing to just 18,000 with private sector beds increasing to c.400,000 beds

2018

2016

- Current number of nursing and residential care homes in the UK will have to almost double over the next 20 years to cope with the rising numbers of people aged 85 or more.

- Health care providers who fail to advance progressive management practices as well as information technology capabilities to effectively compete and collaborate in this new environment will be threatened for business survival.

Capital Care Associates 2015 - Health and care a hot topic. General Election.

- Cost of residential care hits £75,000 leaving the elderly with a shortfall in pension pots many pensioners have to dip into savings to pay for their care and one in five is forced to sell their home.

- Industry data on providers is scarce for benchmarking and lenders / investors for underwriting and credit monitoring.

- 1m people in England expected to have dementia with estimated care costs of nearly 35b. Source Alzheimer’s Society, 2012

2025

2020 - It is expected that 2.9m people in England will have three or more long term conditions with a additional care cost of £5b.

Source Kings Fund

2026 - Adult social care workforce will need to grow by 1m

Opportunities Programme Leadership Business Transformation Programme and Project Controls Risk Advisory Programme Planning Advisory Procurement & Commercial Advisory

#8

Programme Management Opportunities Service Programme Leadership - Lead/Support New Investment Growth Programmes

Service Lines Programme Management & Mega Projects

Programme Advisory

Portfolio, Programme & Project Office

- Support new and existing care homes businesses with Best Practice through implementation of - New Home Home Manager Launch Manual - New Home BluePrint - New Home Standard Operating Procedures (SOP) - Lead implementation of cost effective project systems to improve collaboration, organisation and transparency - Support Major Healthcare Programmes & Projects Across AECOM

- Establish a recognised and respected portfolio, programme and project management profession in health and social care organisations

Business Transformation Opportunities Service

Service Lines

Culture

Effectiveness and Transformation

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Climate/Maturity Assessment for existing and expanding REC businesses

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Change Readiness Assessment for REC investment growth programmes

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Culture Strategy for REC mergers

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Organisational Design for mergers

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Change management for mergers

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People process review and alignment for mergers

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Operational Readiness for new REC businesses

Performance Management

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Performance Management to reduce High usage of agency staff to improve profitability

Programme & Project Controls Opportunities Service Programme & Project Controls Deployment and implementation of low value and high adaptation online collaboration software solution for REC programmes and projects

Service Lines Document & Data Management - Training and support for document & data management - Maturing REC providers data management capability

Performance Management & Reporting Create high level Exec programme reports and dashboards using online collaboration software solution for REC programmes and projects. as no REC provider excels in all categories - –Data analytics – Data Aggregation; – Population Insight – Care Management – Workflow and Action

Systems Strategy Conduct a comprehensive situational analysis and develop strategic business plan for REC businesses

Risk Advisory Opportunities Service

Risk Advisory

- Support high level in-flight operational projects - Support REC Investors and property developers - Support REC operators under the media spotlight - Support failing residential elderly care businesses

Service Lines

Programme & Project Risk Management

- Provide risk advisory for in-flight REC investment growth programme and projects

Programme Planning Opportunities

Service

Programme Planning Advisory

- REC Programme Planning development - REC Operational Planning Management

Procurement & Commercial Advisory Opportunities

Service

Procurement & Commercial Advisory

- Procurement advice strategy for REC operators to alleviate waste

Proposals

#15

Business Prognosisa-f Business Prognosis Reviews 4 areas of a care home business including Estate Management , Commercial, Quality, and Business Growth and provides a high level report with unbiased recommendations in actions and a prognosis grade.

Acquisitions If an assessment is for a recently acquired care home, the business prognosis will focus on: - Regulatory record - Background, business style and culture - Estate condition

Benefits: Not Included Make better decisions Overcome weaknesses - Assessments on quality of care Support business reviews - Health and safety assessments* Minimize threats & expose opportunities - Income assessments Our approach We conduct a three-to-five day assessment service, that engages with a wide range of internal and external stakeholders.

Prognosis Grade

Prognosis Grades: A.

B. C. D. E.

Best possible grade, excellent (around 70% 100%) Above average grade, very good (around 60% 70%) Minimum pass, improvement needed (around 50% - 60%) Close fail, (between 45% and 49%) Fail, (0% - 45%)

Business Growth (BG) A B

C D E F

Quality (QOS) A B

C D E F

Commerical (CM) A

B C D E F

Estate Management (EM) A

B C D E F

Prognosis Grade

C

Aecom’s (DBFO) Programme Management Lifecycle Model

Design

Build

Fund

PROJECT MANAGEMENT

Operate

Any questions?

Dean Jones, Associate - Programme Leadership, Consulting

TOGETHER WE HELP HEALTH AND SOCIAL CARE CLIENTS TO SEE FURTHER, GO FURTHER THANK YOU dean.jones@aecom.com