CT Scanner Replacement Nevill Hall Hospital Abergavenny Business Justification Version No: 3 Issue Date: 9 July 2012 VERSION HISTORY Version Date Brief Summary of Change Owner s Name Issued Draft 21/06/12 1st Draft Version A Carter 25/06/12 2 nd Draft Version A Carter Final 27/06/12 Final A Carter 1
CONTENTS 1. PURPOSE 2. STRATEGIC CONTEXT 3. CASE FOR CHANGE 4. INVESTMENT OBJECTIVES 5. BUSINESS CASE OPTIONS 6. PREFERRED OPTION 7. PROCUREMENT ROUTE 8. FUNDING & AFFORDABILITY 9. MANAGEMENT ARRANGEMENTS 2
1. PURPOSE The purpose of the Business Justification Case is to seek approval and funding to replace the CT scanner at Nevill Hall Hospital Abergavenny. The cost of replacement equipment is 845,000 + VAT i.e. 1.014m This imaging modality provides the capability to provide cross sectional images of the body, which when combined with the administration of a contrast agent allows for the detection of even subtle differences between body tissues. As an imaging tool CT remains the preferred method of diagnosing many different cancers. This coupled with the improved resolution on CT scanners permits the development of new techniques resulting in earlier diagnosis and subsequent early intervention. 1.1 Summary Case The case aims to meet the following strategic objectives of the organisation: To provide our patients with safe, high quality, evidence based services. To invest in our services through sound financial management. To realise the benefits of technology and service modernisation. 2. STRATEGIC CONTEXT The strategic direction of the newly established Aneurin Bevan Health Board remains consistent with the Assembly s new framework for the future outlined in Designed for Life: Creating a World Class Health Service for Wales. One of the principal challenges facing the organisation is the elimination of inequalities in the management of the well being of the population, with the provision of a whole system approach to healthcare. The Aneurin Bevan Health Board continues to strive for this desired goal through its Clinical Futures Strategy. The Welsh Assembly Government has also published Healthcare Standards for Wales, which set out clear expectations for services in four domains of patient experience, clinical outcomes, healthcare governance and public health. Imaging services play a fundamental role in all four domains and remains the key clinical component to effective healthcare delivery. 3
Radiological services also face some immediate pressures arising from the Welsh Assembly Government s Planning and Priorities Guidance including: Increasing emphasis on fast turnaround times in unscheduled care requires rapid access to diagnostics for assessment Development of one stop clinics particularly in cancer services New waiting time targets for cancer treatment The introduction of specific waiting times targets for diagnostic services Rapid access to diagnostics is required to achieve the Referral to Treat Time Targets. Impact of National Service Frameworks and NICE guidance on levels of diagnostic demand - for example in relation to stroke care. Impact of new GMS contract and the Quality and Outcomes Framework on demand for diagnostic services. The requirement for faster access to diagnostic services is a critical requirement to improve both clinical and operational performance for inpatient and outpatient services. Without timely and appropriate access to radiology services there will be longer lengths of stay for inpatients, higher levels of emergency admissions and extended waiting times for outpatient services which will impact on the quality of patients care and the achievement of waiting times and other national performance targets. Requirement to improve patient flow and optimise acute bed utilisation and reduce length of stay Rapid assessment for trauma patients Rapid access for medical and surgical assessment units NSF for stroke patients. The NICE guidelines. Cancer guidelines and cancer waiting time targets place greatly increased pressure across the directorate. Reduce out patient waiting times to meet current targets; Radiology has a vital role to play to ensure the Trust meets the Referral to Treatment waiting times targets. Diagnostic radiology tests need to be available at the appropriate time in the patient pathway to enable timely transition from referral to treatment and discharge. 4
3. CASE FOR CHANGE The 64 slice CT scanner at Nevill Hall Hospital is now in excess of 8 years old; it is a high priority imaging modality and is a single point of failure at the site being a lone scanner. This imaging modality is critical to Accident and Emergency receiving emergency patients, the closure of the scanner results in the closure of A&E to emergency trauma cases. An ageing scanner is also more prone to periods of service and breakdown closure. On analysis of demand the CT service has been subject to increases in referrals year on year over the last three years with a predicted increase to 6% for the years 2011/12 equating to additional 1000 patient visits. From the inpatient perspective the acute site currently delivers in the order of 50% activity, whilst achieving the established outpatient waiting time target for diagnostics. Of this activity 8% is attributable to delivering CT imaging to the Accident and Emergency service. The increased pressure on this service is coupled with the need to implement new clinical guidelines for head injuries and Stroke management. The scanner is now operating for 12 hours a day and often at weekends which is increasing the rate of deterioration of the scanner. The CT scanner is now reaching the end of its acceptable serviceable life creating a reliability issue, the impact of which would be a total reduction in capacity. Due to the age of this equipment it is inevitable that image quality will deteriorate, speed of acquisition and reconstruction will be subject to degradation thus imposing a significant clinical risk of misdiagnosis. As its age increases it is inevitable that this will result in higher maintenance costs. A new scanner would enable quality improvements to be realised, offering more diverse diagnostic imaging to referring clinicians. Based on current demand and referral growth it is anticipated that the service would be required to deliver activity in the region of 18,100 scans in the years 2011/12. This is creating pressures on the service in terms of increased demand, the need to establish faster turnaround times with the ultimate objective of improving the quality, timeliness and efficiency of patient care whilst delivering Welsh Assembly Government targets. Achieving these waiting times targets will rely upon improved efficiency and extended capacity in radiology services over the next few years. With advances in technology a new scanner coupled with further modernisation of our services would afford us the opportunity to more easily match our capacity and demand issues, 5
whilst delivering new and more complex diagnostics. Increased capacity may be achieved through extended working hours and further development of skill mix within the workforce e.g. by extending the roles of radiographers and helpers to reduce the reliance on consultant staff for more of the routine workload. Patients Visits April 2008- March 2009 13312 April 2009- March 2010 15923 April 2010- March 2011 16445 April 2011- March 2012 17237 % Increased Demand 16% 3.5% 4.6% To support the safe and effective provision of digital imaging services with the reduction in radiation dose to both patients and staff. To improve the recruitment and retention potential of staff to the Health Board and to further develop a highly skilled, highly motivated, flexible workforce. 4. INVESTMENT OBJECTIVES 4.1 Critical Success Factors of the Business Case: To provide a sustainable and resilient CT imaging service whilst progressing to the Clinical Futures model of care. To utilise technological advances to aid improved diagnosis particularly in the more complex patients. Modern CT scanners allow for the delivery of more complex diagnostics. To maximise opportunities to improve efficiency and modernise patient care by utilising advance operating systems To provide the capacity and the flexibility to respond to future service demands with inevitable changes in clinical practice. 6
To provide improved diagnostics to meet the requirements of an aging population. To provide services that are affordable and represent good value for money, maximising opportunities to deliver services as close as possible to the population. Reduce diagnostic waiting times to support Referral to Treatment Time Targets (RTT) whilst achieving diagnostic targets. To ensure facilities are in an appropriate environment. 4.2 Risks factors: In proceeding with the business case the following key risks have been identified: 1. Failure to secure funding. 2. The ability to provide available capacity to support an inpatient service only. 3. Technical demands around the planning, installation, and design of accommodation for the CT scanner 4. Significant service impact if project delayed. 5. Procurement delay. 6. Availability of parts required to maintain the existing scanner and the associated cost implications 7. Inability to meet Access 2009 target or Referral to Treatment times. This risk cannot be mitigated. 8. The loss of service during the removal and replacement of the existing CT scanner is mitigated by its installation in a temporary location to ensure service continuity. The technical demands associated with the planning and design for the CT scanner accommodation and installation can be mitigated by use of an experienced project team using PRINCE methodology and associated risks are therefore considered low. The project team will comprise of: Project Director ABHB Appointed Project Manager, Service users, CT equipment supplier technical project manager, ABHB estate managers, 7
IT services personnel, Senior Advisor, Environmental Management and Engineering, Welsh Health Estates. A delayed project will involve significant cost implications should the hire of a mobile be the option of choice to continue to provide the acute site with a sustainable service. This risk may however be mitigated with consideration being given to moving the 64 slice CT scanner to a new location within Radiology at Nevill Hall Hospital to maintain service continuity at a reduced cost. There is currently no NHS capacity in adjacent organisations. The project has been assessed on service demand and user requirements. The option appraisal ensured that a flexible solution was essential therefore the associated risk is considered low. Procurement of the equipment will be with the assistance of the Senior Advisor, Environmental Management and Engineering, Welsh Health Estates and will be via the Welsh Imaging Framework. Clinical evaluation teams will undertake detailed evaluation of equipment on the framework and a formal assessment against essential criteria will be completed. To ensure value for money the procurement will be combined with equipment purchases for the Royal Gwent Hospital and other Welsh procurements in the same timeframe. 4.3 Quantifiable service benefits include the following:- Improved reliability of CT services. Increase in the numbers of patients scanned as imaging times are shorter with improved technology. Improved image quality through shorter breath hold, related to speed of acquisition Provision for cardiac scanning Better three dimensional image reconstructions, with superior image resolution. Easier to image multiple trauma patients. Improved management of the patient case pathway through early diagnosis and subsequent early intervention. Non-quantifiable service benefits include the following:- New technology aids staff recruitment and retention. Improves moral and confidence in radiology services. 8
Improved reliability leads to better patient satisfaction, less cancellations due to breakdowns 5. BUSINESS CASE OPTIONS The following options have been identified: A. Do nothing and operate as a single CT scanner site. B. Replace the CT scanner with a modern, updated model. C. Outsource to neighbouring facilities. D. Outsource to private sector The options are appraised as follows: Option Appraisal Option Number What this means Consequences A. No replacement of existing scanner Risk of breakdown Total loss of capacity. Compromised image quality and image reconstruction. Compromise emergency and elective service provision. Established capacity would be utilised by inpatient demand. Failure to achieve Access 2009 targets. Inability to achieve Cancer targets. Increased risk of misdiagnosis due to poor image quality. Loss of available staff resources, implications for all radiology service provision. Extended reporting times due to scanner degradation. Delays in patient care pathway. Inability to introduce new technological advances in imaging. 9
No affordable/acceptable upgrade capability Inability to meet the requirements of the ALARP principles for dose reduction strategy B. Replacement of existing scanner Maintain CT provision Increase available capacity through new technology and service modernisation. New technology to support service development. Ensure business continuity during breakdown. Ability to achieve established targets. Ensure compliance requirements of NICE and Stroke Guidelines. Retain services, costs and income. Workload and workforce reorganisation to support the sustainable delivery of the diagnostics target. RTT, 31 and 62 day cancer targets. Opportunity for service development thereby improving diagnosis and outcomes for patients. Support service developments for more complex diagnostic procedures. Superior image quality. Temporary scanner will be required during the replacement period. Provide sustainability to the delivery of emergency and elective services. C. Outsource to neighbouring Organisation Increased cost implication for ABHB Compromising patient management and patient care pathways. Increased travel time for patients and lack of continuity of care. Lack of sufficient capacity in adjacent organisations. There would be a need for outsourced capacity to undertake 11,000 CT scans. Total 10
annual NHH CT activity is 17,000 with increasing demand year on year. D. Outsourcing to the private sector A minimum of 11,000 scans would need to be outsourced at a cost of approximately 50-100 per scan (dependent of type of scan). An increase of 15-25% per annum would need to be factored into future revenue costs Option A has been discounted as it will inevitably lead to a complete failure of the CT scanner which would mean that NHH can not meet patient targets and the HB has no realistic option to outsource or meet this capacity from elsewhere in the organisation. Option C has been discounted due to the lack of capacity in adjacent for this number of patients. Option D of outsourcing to the private sector of at least 11,000 scans has been discounted due to the annual revenue cost of 550,000 to 1,100,000 per annum. 6. PREFERRED OPTION As a result of the discounting of the 3 options above, Option B becomes the preferred option. 6.1 Capital Costs Option Option B Replace existing equipment 000s Equipment 845,000 VAT 169,000 Total 1,014,000 11
6.2 Revenue Costs The revenue implications of the preferred option are illustrated in the following table: Option B Replace existing equipment Cost 000s Service & Maintenance contract 85 Capital Charges 145 Total revenue costs of scanner 230 Funded baseline Current service contract -41 baseline capital charges -100 Total funded baseline -141 Incremental revenue impact 89 The table illustrates the there is an incremental revenue impact of an 89k cost increase over the current service baseline. As there is only one realistic option in this case a further option appraisal and non financial benefits appraisal has not been developed. 7. PROCUREMENT ROUTE The procurement route will utilise the Welsh framework agreements for diagnostic imaging equipment currently in place. 8. FUNDING & AFFORDABILITY The scanner will require total capital funding of 1.013M. The table in section 6 above illustrates that the total revenue impact of the new CT scanner will be an increase of 89K from the current cost baseline. Some of the maintenance increases of 44,000 can be met from year 2 by savings in other contracts, specifically; the phasing out of a screening room in Nevill Hall will save 21,000 in maintenance costs from 2014/15. 12
There is agreement between the General Manager for Scheduled Care, the Business Partner Accountant and the Radiology Directorate Manager that the outstanding 23,000 will be offset by the savings accrued from the introduction of the new PACS contract with Fuji. The capital charges will require central funding. * The maintenance cost on the replacement of the existing is from year 2 year 1 is under warranty therefore 44K impact will not be realised until 2014/15. 9. MANAGEMENT ARRANGEMENTS The Radiology Directorate, Project Manager and Works Department have extensive experience with radiology development, replacement and refurbishment projects. Using the essential benefit criteria a benefits realisation assessment will be performed 6 months after scheme completion and a report made to the Trust Board. A full risk assessment and analysis has already begun and a risk management plan prepared. This will be reviewed and updated throughout the scheme. A post project evaluation will be performed 6-12 months after completion and will assess the project against the objectives stated in the business justification and final out-turn cost against budget estimate. Any problems or disputes that arise during the scheme will be analysed and where necessary improvements made to procedures or policies and training needs identified. Project Board members: Mr Peter Lewis, Divisional Director of Scheduled Care (Project Director) Dr Andrew Jones, Chief of Staff Radiology Mr Dave Jones Head of Works and Estates (The supplier will be represented on the Project Board following appointment) 13
Project Team members: (Health Board members) Dr Andrew Jones, Chief of Staff Mr Andrew Carter, Radiology Services Manager Nevill Hall Hospital Mrs Marilyn Williams, Radiology Directorate Manager Mr Terry Gale Estates Officer, Works and Estates Supplier s specialist project manager. 14