Business Case to replace CT Scanner at Daisy Hill Hospital

Transcription

1 Business Case to replace CT Scanner at Daisy Hill Hospital Version 0.8 Corporate Planning Division Directorate of Performance & Reform 14 th December 2009

2 TABLE OF CONTENTS 1. EXECUTIVE SUMMARY INTRODUCTION AND BACKGROUND STRATEGIC CONTEXT CURRENT SERVICES CASE FOR CHANGE PROJECT OBJECTIVES AND CONSTRAINTS DESCRIPTION OF OPTIONS NON-FINANCIAL EVALUATION FINANCIAL APPRAISAL RISK APPRAISAL IDENTIFICATION OF THE PREFERRED OPTION AFFORDABILITY ANALYSIS EQUALITY AND NEW TSN PROJECT MANAGEMENT POST PROJECT EVALUATION...36 Page 2 of 61

3 APPENDICES 1 Capital and Revenue Costs of Short-listed Options 2 Financial Assumptions 3 Capital Charges 4 Discounted Cash Flow Calculations 5 Optimism Bias Calculations Page 3 of 61

4 1. EXECUTIVE SUMMARY 1.1. Introduction This paper sets out the capital requirements associated with the replacement of the CT Scanner in the Radiology Department at Daisy Hill Hospital (DHH). Computed Tomography (CT) imaging combines the use of a digital computer together with a rotating x-ray device to create detailed cross-sectional images or slices of the different organs and body parts such as the lungs, liver, kidneys, pancreas, pelvis, extremities, brain, spine and blood vessels. For many patients CT can be performed on an outpatient basis without requiring admission to hospital CT Scanning at Daisy Hill Hospital Under Developing Better Services (June 2002) DHH was designated as an acute hospital. DHH provides inpatient, out-patient and day case services across a range of specialties. At present the CT Scanner in DHH is a GE High Speed Plus single-slice system produced by the medical company GE Medical. It was installed during It is a 3rd generation scanner, i.e., the design consists of a detector array and an x-ray tube both of which move in a circle with the gantry, Romans (1995, pp 45-50). It is a single-slice scanner and in technology terms is completely inadequate for an acute hospital such as DHH. The existing scanner in DHH is the only single-slice scanner in use in Northern Ireland. Due to the speed at which CT scanning technology has developed, the existing machine is technically outdated in terms of functionality and capability compared to technology now deemed as standard. This is mainly due to tube cooling issues which result in poor quality images. The single-slice scanner takes slices 7mm apart which has significant implications for clinicians Limitations of CT Scanner and Key Issues The main limitations associated with the existing CT scanner in DHH are detailed below: Cancer patients for staging scans may have small lesions that are not demonstrated at this slice thickness; Emergency patients with dissecting aneurysms require a repeat scan when transferred to Belfast for stenting. This is due to the scanner s inability to measure the aneurysm accurately -/+ 7mm adding an additional 45 minutes prior to this critical patient reaching theatre; Pulmonary angiograms are of poor diagnostic quality. Pulmonary angiograms will only demonstrate a central clot. Peripheral, renal and carotid angiograms are not possible due to the slice thickness and the limitations of reconstructed images that have now become standard; Due to the limitations of the physical equipment the opening is 63cm and the table can take a 28 stone patient. 10 years ago this was well above any Page 4 of 61

5 requirement however now larger patients have to be transferred as the standard opening is 75cm and table holds 40 stone; Critical difficulties arise with major trauma patients with the possibility of spinal injury. The image quality is insufficient to detect subtle fractures and reconstructions are not possible due to the 7mm slice thickness. Such patients require transfer to another site with multi-slice facilities and rescanning with the additional radiation dose in order to provide an accurate diagnosis; Patients with multiple injuries require complex imaging. Due to the limitations of tube cooling the examination time is much longer compared to a multi-slice scanner which leads to delays in treatment. This is extremely stressful for the trauma team; Tube cooling also impacts on diagnosis of specific cancers e.g. pancreas where many slices are taken in 3 consecutive phases. Optimum protocols for CT examinations of these areas cannot be carried out; A single-slice scanner gives the patient a higher radiation dose than a multislice scanner per body part as the latter has a greater number of detectors to capture the x-ray beam; and Patient sessions are organised to facilitate the current CT scanner in terms of tube loading (i.e. brain scan must be followed by a scan of another part of the body). Ideally the patient sessions should not be organised in such a fashion and should be organised to facilitate the patient as opposed to the scanner. Reduced use of CT Scanner by Radiology Staff Issues in terms of capacity due to the tube cooling of the machine between each scan, the capacity for inpatients and outpatients are dramatically reduced. In addition, oncology patients at DHH are transferred to CAH for their CT scanning as more accurate imaging is required, which the current CT scanner in DHH cannot provide; Patient throughput patient throughput is affected by the constraints of the current CT scanner. This is having a detrimental impact on the CAH site due to having to accept more referrals from DHH which are not accounted for in the CAH capacity; and The age, condition and effectiveness of the machine hinders the diagnostic quality of the imaging, resulting in repeat scans, lengthened CT scanning time per patient, increased levels of radiation for patients and concerns of misdiagnosing images. Service Developments The current CT scanner has limited potential to support new service developments. The existing scanner is at full capacity dealing with the current services offered in DHH. The impact is that patients from the Newry and Mourne area are having to travel to CAH to avail of improved services that should be accessible at their local hospital. Page 5 of 61

6 1.4. Objectives and Constraints The following objectives and constraints were identified in relation to this proposed investment: Objective One To ensure that the Trust can achieve performance targets set by DHSSPS. Objective Two To facilitate changes that result in a higher quality service for patients. Objective Three To minimise disruption to patient care activities. Objective Four To ensure diagnostic testing can support new and additional service developments across the Trust. Constraint A The selected option must be accessible and affordable in terms of capital and revenue. Constraint B The preferred option must make best use of the existing estate and service infrastructure Description of Options The following options were identified: Option 1 Do Nothing; Option 2 - Do Minimum - Replace existing Single-Slice CT Scanner with new 16-Slice CT Scanner (purchase); Option 3 Replace existing Single-Slice CT Scanner with new 16-Slice CT Scanner (lease) Option 4 - Replace existing Single-Slice CT Scanner with Multi-Slice (64 slice) CT Scanner (purchase); and Option 5 - Replace existing Single-Slice CT Scanner with Multi-Slice (64 slice) CT Scanner (lease). Options 1, 2, 4 and 5 were identified for financial and non-financial evaluation 1.6. Non-Financial Evaluation of Options The identified options were evaluated against the following non-financial criteria: Quality of Service; Speed of Implementation; Support Achievement of Performance Targets; and Support Service Developments within the Trust. Page 6 of 61

7 1.7. Risk Appraisal The New Green Book explicitly addresses project risks following a study by Mott MacDonald 1 which identified the tendency for project appraisers to be overly optimistic, overstating benefits and understating timescales and costs. To redress this tendency, HM Treasury have developed an approach which requires appraisers to make explicit adjustments to determine a suitably optimism biased adjusted capital cost and NPV for each option. Appendix 4 illustrates the risk factors for this project and the extent to which the Trust considers it can mitigate against them. This evaluation has generated the following optimism bias adjustment factor, 24.4% Identification of Preferred Option Table 1.1 below indicates results of the financial and non-financial evaluations: Table 1.1 Summary of Costs and Benefits Capital Costs excluding Optimism Bias ( ) Baseline Average Capital Charges ( ) Additional Annual Recurring Revenue Costs ( ) Non-Financial Benefit Score Net Present Value ( 000) Baseline Net Present Value ( 000) Risk Adjusted Option 1 Option 2 Option 4 Option 5-459, , ,500 37,778 60,743 72,318 26,018-59,500 74, , ,452 1,666 1, ,599 1,841 1,934 The Project Group has considered the options and has concluded that the preferred option is Option 4 - Replace existing Single-Slice CT Scanner with Multi- Slice (64 slice) CT Scanner (purchase). This option has been identified as the preferred option for the following reasons: Option 4 achieved the highest non-financial score of 960 (joint highest with Option 5); Option 4 proposes the purchase of a 64 slice CT scanner whereas Option 5 proposes the lease of this equipment; The capital costs (excluding optimism bias) of Option 4 are 559,500 (Option 5 159,500); The additional revenue costs associated with Option 4 are 74,500 ( 167,050 for Option 5); 1 Mott MacDonald (2002), Review of Large Public Procurement in the UK, Mott MacDonald (2002) Page 7 of 61

8 The baseline average capital charges associated with Option 4 are 72,318 ( 26,018 for Option 5); The Net Present Value (baseline) of Option 4 was 1,666k (10% lower than that of Option 5 which was 1,836k); The Net Present Value (risk adjusted) of Option 4 was 1,841k (5% lower than that of Option 5 which was 1,934k); On the basis of the net present value calculations Option 4 is identified as the preferred option Affordability Analysis The estimated capital cost of this scheme adjusted for optimism bias is 696,018. The affordability analysis associated with the proposed investment is summarised in Table 1.2 below. Table 1.2 Affordability Analysis Average Annual Revenue Costs (Risk Adjusted) Average Annual Capital Charges (Risk Adjusted) Total Option 1 Base Case 63,315 46, ,310 Option 4 Preferred Option 134,000 89, ,963 Additional Revenue Consequences 70,685 42, , Equality and New TSN The developments proposed within this outline business case have been considered in terms of their equality of opportunity implications against each of the four criteria detailed above. The proposal to replace the CT Scanner at DHH has limited scope to impact differentially on any of the nine equality groupings, as the standard of care for all service users and staff will be improved. Page 8 of 61

9 1.11. Project Management A project management structure will be established to ensure efficient delivery of the proposed investment. Table 1.3 below sets out the major project stages and tasks and the envisaged timescales. Table 1.3 Project Timescales and Milestones Phase Component Target Date Business Case Submitted to DHSSPS End Dec 2009 Business Case Approved by DHSSPS End Jan 2009 Tender Process Commenced Mid Feb 2010 Equipment Installed and Minor Works Complete Mid May 2010 Initial Post Project Evaluation December 2010 Full Post Project Evaluation June Post Project Evaluation Following the implementation of the project, an assessment will be made of the effectiveness of the CT Scanner by carrying out a post project evaluation (PPE). The main objective of the PPE will be to assess the benefits that are being or have been derived from the project, compared with those that were envisaged. Page 9 of 61

10 2. INTRODUCTION AND BACKGROUND 2.1. Introduction This paper sets out the capital requirements associated with the replacement of the CT Scanner in the Radiology Department at Daisy Hill Hospital (DHH). Computed Tomography (CT) imaging combines the use of a digital computer together with a rotating x-ray device to create detailed cross-sectional images or slices of the different organs and body parts such as the lungs, liver, kidneys, pancreas, pelvis, extremities, brain, spine and blood vessels. For many patients CT can be performed on an outpatient basis without requiring admission to hospital. During its 25-year history, CT has made great improvements in speed, patient comfort and image resolution. As CT scan times have got faster, more anatomy can be scanned in less time. CT is one of the best tools for studying the lungs and abdomen. It is an invaluable tool in the cancer diagnosis process and is often the preferred method for diagnosing lung, liver and pancreatic cancer. CT imaging and CT angiography are finding a greater role in the detection, diagnosis and treatment of heart disease, acute stroke and vascular diseases which can lead to stroke, gangrene or kidney failure. Additionally, CT can be used to measure bone mineral density for the detection of osteoporosis. It is an essential requirement for major trauma cases and other emergencies Overview of Daisy Hill Hospital Under Developing Better Services (June 2002) DHH was designated as an acute hospital. DHH provides inpatient, out-patient and day case services across a range of specialties. The key specialties provided in DHH are: general medicine; stroke unit; coronary care; respiratory unit; general surgery; obstetrics; gynaecology; paediatric medicine; paediatric surgery and ENT; geriatric medicine; renal medicine; and Consultant-led 24-hour accident and emergency unit. Page 10 of 61

11 A wide range of community and Allied Health Professional services are also provided from the DHH site. There are currently 270 beds plus 6 special care baby cots, in addition 30 renal dialysis stations are provided as part of the sub-regional haemodialysis service CT Scanning at DHH At present the CT Scanner in DHH is a GE High Speed Plus single-slice system produced by the medical company GE Medical. It was installed during It is a third generation scanner, i.e., the design consists of a detector array and an x-ray tube both of which move in a circle with the gantry, Romans (1995, pp 45-50). It is a single-slice scanner and in technology terms is completely inadequate for an acute hospital such as DHH. The existing scanner in DHH is the only single-slice scanner in use in Northern Ireland. Due to the speed at which CT scanning technology has developed, the existing machine is technically outdated in terms of functionality and capability. This is mainly due to tube cooling issues which result in poor quality images. The single-slice scanner takes slices 7mm apart which has significant implications for clinicians Project Team This business case has been prepared by the Southern Health and Social Care Trust. The members of the Project Team were as follows: Dr Gillian Rankin Interim Director of Acute Services; Dr Stephen Hall Associate Medical Director, Cancer & Clinical Services; Mr Ronan Carroll Assistant Director of Acute Services, Cancer & Clinical Services; Mrs Alexis Davidson Head of Diagnostic Services; Mrs Jeanette Robinson Radiography Manager; Mrs Claire Kelly Head of Capital Planning; Mrs Sinead Rowe Senior Financial Management Accountant; Mr Dennis Quinn - Assistant Head of Estate Development and Capital Works Structure of this Document This Business Case is set out as follows: Section 3 the strategic and policy context for the development, outlining relevant national, regional and professional guidance; Section 4 the need for the investment in the context of the existing services provided and the existing equipment; Section 5 key issues relating to the proposed investment; Section 6 a number of business case objectives; Section 7 the long list and short list of options; Page 11 of 61

12 Section 8 the non-financial benefits of each option; Section 9 the capital and revenue costs associated with the short-listed options; Section 10 the risks associated with the development and the scale of the optimism bias adjustment; Section 11 the rationale for the selection of the preferred option; Section 12 the economic appraisal of the preferred option and affordability issues; Section 13 discusses the equality and new TSN considerations; Section 14 the project management arrangements; and Section 15 the post project evaluation arrangements. A series of appendices provide further information and detail, and are referred to as appropriate in the text. Page 12 of 61

13 3. STRATEGIC CONTEXT 3.1. Introduction This section outlines key strategic drivers relating to the replacement of the CT Scanner in DHH DHSSPS Performance Targets In April 2009 with the focus on improving health and wellbeing, key ministerial targets which are directly and indirectly linked to the provision of CT scanning in the Trust stated the following: Stroke Services: By March 2011, ensure that 50% of patients attending hospital within one hour of the onset of stroke symptoms receive a CT scan and report within a maximum of a further 90 minutes to inform the appropriate use of thrombolysis; PSA By 1 April 2010, a comprehensive bowel screening programme for those aged should be in place, with a view to achieving a 10% reduction in mortality from bowel cancer by 2011; PSA 3.2 From April 2009, no patient will wait longer than 9 weeks for a first outpatient appointment, 9 weeks for a diagnostic test and 13 weeks for inpatient or day case treatment, working towards a total journey time of 25 weeks by 2011; Diagnostic Reporting From April 2009, all urgent diagnostic tests should be reported on within two days of test being undertaken, with 75% of all routine tests being reported on within two weeks and all routine tests within four weeks; Cancer (PSA 3.4): From April 2009, all urgent breast cancer referrals should be seen within 14 days, 98% of cancer patients should commence treatment within 31 days of the decision to treat, and 95% of patients urgently referred with a suspected cancer should begin their definitive treatment within 62 days; and A&E: From April 2009, 95% of patients attending any A&E department should be either treated and discharged home, or admitted within 4 hours of their arrival in the department IRMER Regulations Ionising Radiation Medical Exposure Regulations (IRMER) regulations and the local rules require the Trust to use as low a dose of radiation as possible. This new technology would allow this to be achieved. Page 13 of 61

14 4. CURRENT SERVICES 4.1. Introduction This section provides an overview of the: principles of CT scanning; uses of CT scanning; clinical benefits of CT scanning; advances in CT scanning; advantages of multi-slice CT scanning; CT scanning within SHSCT; CT scanning within DHH; CT scanning activity at DHH; and proposed developments in CT Scanning at DHH Principles of CT Scanning Computed Tomography (CT) imaging combines the use of a digital computer together with a rotating x-ray device to create detailed cross-sectional images or slices of the different organs and body parts such as the lungs, liver, kidneys, pancreas, pelvis, extremities, brain, spine and blood vessels. For many patients, CT can be performed on an outpatient basis without requiring admission to hospital. CT is based on the x-ray principal: as x-rays pass through the body they are absorbed or attenuated (weakened) at differing levels creating a matrix or profile of x-ray beams of different strength. This x-ray profile is registered on film, thus creating an image. In the case of CT, the film is replaced by an electronic detector that measures the x-ray profile. During its 25-year history, CT has made great improvements in speed, patient comfort and image resolution. An entire chest (forty 8mm slices) can be scanned in 5-10 seconds using the most advanced multi-slice CT system. As CT scan times have got faster, more anatomy can be scanned in less time. Faster scanning helps eliminate artefacts from patient motion such as breathing or peristalsis Uses of CT Scanning Among the various imaging techniques such as MRI and x-ray, CT has the unique ability to image a combination of soft tissue, bone and blood vessels. CT can provide detailed cross sectional images and diagnostic information for nearly every part of the body including: the brain, vessels of the brain, eyes, inner ear and sinuses; the neck, shoulders, cervical spine and blood vessels of the neck; Page 14 of 61

15 the chest, heart, aorta, lungs and mediastinum; the thoracic and lumbar spine; the upper abdomen, liver, kidney, spleen, pancreas, and other abdominal vessels; the pelvis and hips, male and female reproductive systems, bladder and GI tract; and the skeletal system including bones of the hands, feet, ankles, legs and arms Clinical Benefits of CT Scanning Unlike other medical imaging techniques CT enables direct imaging and differentiation of soft tissue structures such as liver, lung tissue and fat. It is especially useful in searching for large spaces occupying lesions, tumours and metastasis and can not only reveal their presence, but also the size, spatial location and extent of a tumour. CT imaging of the head and brain can detect tumours, show blood clots and blood vessel defects, show enlarged ventricles (caused by a build up of cerebrospinal fluid) and image other abnormalities such as those of the nerves or muscles of the eye. Due to short scan times of 500 milliseconds to a few seconds, CT can be used for all anatomical regions, including those susceptible to patient motions and breathing. For example, in the thorax, CT can be used for visualisation of nodular structures, infiltrations of fluid, fibrosis (for example, from asbestos fibres), and effusions (filling of an air space with fluid). CT is one of the best tools for studying the lungs and abdomen. It is an invaluable tool in the cancer diagnosis process and is often the preferred method for diagnosing lung, liver and pancreatic cancer. CT imaging and CT angiography are finding a greater role in the detection, diagnosis and treatment of heart disease, acute stroke and vascular diseases which can lead to stroke, gangrene or kidney failure. It has excellent application in trauma cases and other emergencies. CT is used extensively for diagnosing problems of the inner ears and sinuses because of its ability to generate very high resolution images. The anatomy of the inner ear and sinuses is made up of delicate soft tissue structures and very fine bones. CT is excellent for imaging tumours or polyps in the sinuses and diseases that cause degeneration of the small bones in the inner ear. CT has been the basis for interventional work like CT guided biopsy and minimally invasive therapy. CT images are also used as the basis for planning radiotherapy cancer treatment. CT is also used to follow the course of cancer treatment to determine how the tumour is responding. CT imaging provides both good soft tissue resolution as well as high spatial resolution. This enables the use of CT in orthopaedic medicine and imaging of bony structures including prolapses of vertebral discs, imaging of complex joints like the shoulder or hip as a functional unit and fractures, especially those affecting the spine. The image post-processing capabilities of CT-like multi-planar reconstructions Page 15 of 61

16 and 3-D display further enhance the value of CT imaging for surgeons. For instance, CT is an invaluable tool for surgical reconstruction following facial trauma Advances in CT Scanning Multi-slice CT scanners can now image entire anatomical regions like the lungs in a quick 3-4 second breath hold instead of the current scan breath hold time. Single-slice acquires a stack of individual slices that may be misaligned due to slight patient motion or breathing in between each slice acquisition, spiral CT acquires a volume of data with the patient anatomy all in one position. This volume data set can then be computer-reconstructed to provide 3-D images. In addition to creating images of internal anatomy, these 3-D reconstruction techniques enable a number of non-invasive virtual endoscopy procedures to be performed. Endoscopy involves the use of an endoscope to see inside organs of the body such as the colon or the bronchi of the lungs. Virtual endoscopy allows doctors to see the inside of these same structures without the use of an invasive endoscope. Some virtual endoscopy procedures can even be performed with CT that cannot be undertaken using conventional endoscopy. This technique (sometimes described as fly-through) can also be applied to cardiac applications. New multi-slice CT scanners have been developed that can collect up to 64 slices of data. These systems can create a higher throughput due to the speed of rotation. Multi-slice CT scanning will allow non-invasive imaging and diagnosis of a wider range of conditions in less time and with greater patient comfort Advantages of Multi-slice CT Scanning The advantages of the multi-slice CT scanning in spiral/helical geometry are as follows: complete organs or volumes can be scanned in short times because of continuous data acquisition synchronized with continuous patient transport through the gantry aperture; gapless scanning is possible because a volume of tissue is scanned rather than a slice as in conventional, non-spiral CT systems; artefacts caused by patient motion are reduced; slices can be obtained for any arbitrary position with the volume; the effects of different levels of respiration are removed. There is no shifting of anatomic structures between the slices, and lesions can be localised accurately; new perspectives in contrast medium studies are possible because contrast medium administration times are shorter and small amounts are required; in spiral/helical CT, contrast enhancement is more uniform throughout the scanning sequence and lesion detection is optimised. This is not the case with conventional, rapid sequential CT; there is greater accuracy in multi-planar reconstruction and 3D processing; Page 16 of 61

17 multi-dimensional imaging including CT fluoroscopy, 3D imaging, CT angiography, and CT endoscopy. These techniques expand the scope of clinical applications; and multi-slice scanners ensure reduced radiation for patients CT Scanning within the SHSCT The Southern Health and Social Care Trust provides CT scanning at Craigavon Area Hospital, Daisy Hill Hospital and South Tyrone Hospital. In September 2002 South Tyrone Hospital installed a 16-multi-sliced Toshiba CT Scanner to treat outpatient referrals. In February 2007 Craigavon Area Hospital replaced their single-slice CT Scanner for a 68-multi-slice Toshiba CT scanner CT Scanning within Daisy Hill Hospital The existing scanner in DHH is the only single-slice scanner in use in Northern Ireland. Due to the speed at which CT scanning technology has developed, the existing machine is technically outdated in terms of functionality and capability compared to technology now deemed as standard. CT scanning is used for the following functions: diagnosis of head, neck, chest, abdomen and pelvis malignancy; staging of cancer patients; diagnosis of stroke; assessment of trauma injuries; biopsies of lesions under CT control; assessment of head injuries prior to transfer to neurosurgery, with imaging of neck, chest, abdomen and pelvis as per RVH request; imaging of aortic dissections prior to transfer; limited spinal imaging; ENT requests including sinuses, IAMs, neck; facio-maxillary; respiratory imaging; and renal referrals to assess the renal tracts and identify calculus CT Scanning Activity at Daisy Hill Hospital The table below shows the number of CT scans performed at DHH. The scanner is now working at maximum capacity with an outpatient waiting time of 7-8 weeks. An average of 20 scans per day is made up of 10 outpatients and 10 inpatients. The limiting factors are the tube cooling. Page 17 of 61

18 The table below outlines a decrease in activity from 2007/08 through to 2009/10. This is mainly attributable to the undiagnostic quality of the current CT Scanner which has meant that large proportions of the DHH oncology patients are transferred to CAH for their CT scan. This is neither appropriate nor equitable for Newry and Mourne locality patients to have to travel to another hospital to receive diagnostic testing which should be available in their local hospital. In addition increased referrals from DHH to CAH for CT scanning is putting added pressure on CAH staff and equipment. Table 4.1 below sets out recent activity data for CT scanning at DHH and shows that activity has remaining quite steady at approximately 4,200 4,400 patients per annum. Table 4.1 CT Scans at DHH 2006/ / / /10 1/4/09-30/9/ /10 Full year estimate Patients Patients Patients Patients Patients Inpatients ,977 1, ,824 Outpatients ,712 1, ,886 A&E patients Day case patients GP Others ,216 4,389 4,202 2,220 4, Proposed Developments in CT Scanning at Daisy Hill Hospital The Trust wishes to develop the technological facilities available by providing a multi-slice scanner for both adult and paediatric examinations of the musculoskeletal system including spine as well as head and body applications. The provision of a multi-slice scanner will also support the development of cardiac, angiography carotid for stroke / TIA and trauma alongside cancer staging, another potential application would be CT colonograhy 2. 2 Additional revenue funding may be required to facilitate implementation of some of the potential applications of the CT Scanner at DHH. Page 18 of 61

19 5. CASE FOR CHANGE 5.1. Introduction This section provides an overview of the key issues associated with the current CT Scanner Current Limitations The main limitations associated with the existing CT scanner in DHH are detailed below: cancer patients for staging scans may have small lesions that are not demonstrated at this slice thickness; emergency patients with dissecting aneurysms require a repeat scan when transferred to Belfast for stenting. This is due to the scanner s inability to measure the aneurysm accurately -/+ 7mm adding an additional 45 minutes prior to this critical patient reaching theatre; pulmonary angiograms are of poor diagnostic quality. Pulmonary angiograms will only demonstrate a central clot. Peripheral, renal and carotid angiograms are not possible due to the slice thickness and the limitations of reconstructed images; due to the limitations of the physical equipment the opening is 63cm and the table can take a 28 stone patient. 10 years ago this was well above any requirement now larger patients have to be transferred as the standard opening is 75cm and table holds 40 stone; critical difficulties arise with major trauma patients with the possibility of spinal injury. The image quality is insufficient to detect subtle fractures and reconstructions are not possible due to the 7mm slice thickness. These patients require transfer to another site with multi-slice facilities and rescanning with the additional radiation dose in order to provide an accurate diagnosis. This is extremely stressful for the trauma team; patients with multiple injuries require complex imaging. Due to the limitations of tube cooling the examination time is much longer compared to a multi-slice scanner which leads to delays in treatment.; tube cooling also impacts on diagnosis of specific cancers e.g. pancreas where many slices are taken in 3 consecutive phases. Optimum protocols for CT examinations of these areas cannot be carried out; a single-slice scanner gives the patient a higher radiation dose than a multislice scanner per body part as the latter has a greater number of detectors to capture the x-ray beam; and patient sessions are organised to facilitate the current CT scanner in terms of tube loading (i.e. brain scan must be followed by a scan of another part of the body). Ideally the patient sessions should not be organised in such a fashion and should be organised to facilitate the patient as opposed to the scanner. Page 19 of 61

20 5.3. Key Issues Reduced use of scanner by Radiology Staff issues in terms of capacity due to the tube cooling of the machine between each scan, the capacity for inpatients and outpatients are dramatically reduced. In addition oncology patients at DHH are transferred to CAH for their CT scanning as more accurate imaging is required, which the current CT scanner in DHH cannot provide; patient throughput patient throughput is affected by the constraints of the current CT scanner. This is having a detrimental impact on the CAH site due to having to accept more referrals from DHH which are not accounted for in the CAH capacity; and the age, condition and effectiveness of the machine hinders the diagnostic quality of the imaging, resulting in repeat scans, lengthened CT scanning time per patient, increased levels of radiation for patients and concerns of misdiagnosing images. Service Developments the current CT scanner has limited potential to support new service developments. The existing scanner is at full capacity dealing with the current services offered in DHH. The impact is that patients from the Newry and Mourne area are having to travel to CAH in order to access services that should be accessible at their local hospital. Page 20 of 61

21 6. PROJECT OBJECTIVES AND CONSTRAINTS 6.1. Project Objectives This section sets out the main objectives for the project together with the main constraints that might apply. The Trust must ensure that any developments deliver maximum value for money for Health and Social Care. Value for money will reflect a judgement on the balance of financial and economic costs set against the achievement of non financial benefits and the levels of risk to which the Trust will be subjected. It reflects that the Trust s objective is not to minimise cost but to achieve an appropriate balance between capital investment and long term running costs, and return on that investment and expenditure. Based on this focus a set of business case objectives have been developed. These objectives are set out below: Objective One To ensure that the Trust can achieve performance targets set by DHSSPS in particular compliance with meeting 9 weeks target for diagnostic testing, targets for diagnostic reporting of urgent and routine tests and targets associated with urgent cancer referrals. Measurable Outcomes: Achievement of DHSSPS targets as noted in Section Objective Two To facilitate changes that result in a higher quality service for patients to improve the quality of the service for patients and to minimise the risk of misdiagnosis. Equitable services should be provided across the acute hospitals of the Southern Trust where possible to ensure patients from the Newry and Mourne locality have equality of access for all new services available to the Trust. Measurable Outcomes: Analysis of log of incidents of insufficient quality; Increase in the scanning activity levels at DHH; and Decrease in the number of Newry and Mourne locality patients being asked to attend CAH for investigations Objective Three To minimise disruption to patient care activities, it is important that continuing care for patients is provided during the works/installation period. Measurable Outcomes: Analysis of log of incidents detailing when building/installation work caused disruption to services. Page 21 of 61

22 Objective Four To ensure diagnostic testing can support new and additional service developments across the Trust. Measurable Outcomes: Analysis of use of CT Scanner in new service developments Project Constraints A number of constraints were also agreed as the basis for limiting the choice of options to be considered. Thus selected options must be capable of overcoming the following constraints: A The selected option must be accessible and affordable in terms of capital and revenue B The preferred option must make best use of the existing estate and service infrastructure. Page 22 of 61

23 7. DESCRIPTION OF OPTIONS This section examines the possible options relating to the replacement of the CT Scanner at DHH. Options identified are detailed below Long List of Options The Trust considered the range of plausible options to produce a long list of options, these are outlined below: Option 1 Do Nothing This option would involve no change from the existing arrangements. The existing CT Scanner would not be replaced. Issues pertaining to the constraints and quality of the existing CT scanner would remain Option 2 - Do Minimum Replace existing Single-Slice CT Scanner with new 16-Slice CT Scanner (purchase) 3 This option would ensure a new 16 slice multi-slice CT scanner could be procured for use in DHH. This option would involve an interim solution to be provided whilst the new CT scanner is installed, the provision of a mobile CT scanner would be acceptable for the time period associated Option 3 Replace existing Single-Slice CT Scanner with new 16- Slice CT Scanner (lease) This option would ensure a new 16 slice multi-slice CT scanner could be leased for use in DHH. This option would involve an interim solution to be provided whilst the new CT scanner is installed, the provision of a mobile CT scanner would be acceptable for the time period associated Option 4 Replace existing Single-Slice CT Scanner with Multi- Slice CT Scanner (64 slice) (purchase) This option would ensure a 64 slice multi-slice scanner could be procured for use in DHH. This option would involve an interim solution to be provided whilst the new CT scanner is installed, the provision of a mobile CT scanner would be acceptable for the time period associated Option 5 Replace existing Single-Slice CT Scanner with Multi- Slice CT Scanner (64 slice) (lease) This option would ensure a 64 slice multi-slice scanner could be leased for use in DHH. This option would involve an interim solution to be provided whilst the new CT scanner is installed, the provision of a mobile CT scanner would be acceptable for the time period associated. 3 This option has been deemed to be the Do Minimum option as it is no longer possible to purchase a Single-Slice CT Scanner. Page 23 of 61

24 7.2. Evaluation of Options A short-listing process has been carried out to identify any option(s) that would not support the stated objectives of the project and, therefore, should not be subjected to a detailed Cost Benefit Analysis. Major factors that were considered during the initial evaluation of options included: ability to meet the stated needs and objectives ability to overcome the project s constraints cost effectiveness of the option The results of this exercise are illustrated in Table 7.1. = fully addresses objective = meets most of the objective = partially meets the objective x = option does not meet objective Y = option does overcome the constraint N = option does not overcome the constraint Table 7.1 shows that Options 1, 2, 4 and 5 have been short-listed for evaluation. Whilst Options 1 and 2 do not meet the project objectives these options have been shortlisted to act as Do Nothing and Do Minimum. Table 7.1 Preliminary Sift of Options Objectives Constraints Short-list? A B Option 1 x x x Y Y Yes Option 2 x x Y Y Yes Option 3 x x Y Y No Option 4 Y Y Yes Option 5 Y Y Yes Page 24 of 61

25 8. NON-FINANCIAL EVALUATION A set of non-financial criteria were derived from the objectives described in Section 6.1 above. Each option has then been measured against these criteria. The nonfinancial criteria are described below Non-Financial Criteria Quality of Service The provision of adequate scanning facilities to meet the needs of the Trust staff and patients would ensure that all patients will be investigated via the use of modern, properly functioning equipment (giving good quality images), thus reducing the risk of misdiagnosis and reducing the levels of radiation exposure to patients. Where possible patients from the Newry and Mourne locality should have equality of access to all existing and new services available within the Trust Speed of Implementation As access to CT scanning in DHH is limited due to the constraints of the equipment, it is imperative that adequate CT scanning facilities are provided as soon as possible and with minimal impact on patient care activities, ensuring interim arrangements are included to ensure patient waiting times are not adversely affected Support Achievement of Performance Targets The Trust must achieve the performance targets set by the DHSSPS. The introduction of a comprehensive bowel screening programme across Northern Ireland over the coming months will also increase demand for scanning facilities. In addition targets associated with cancer referrals will impact upon diagnostics and their ability to enable cancer services to achieve the targets set Support Service Developments within the Trust 8.2. Weighting Diagnostic facilities in the Trust must provide adequate support to enable new service developments to be implemented to improve patient pathways and services. CT scanning is an integral element to the implementation of various new services and therefore reliable quality imaging is imperative. The allocation of a weighting factor to each of the criteria is a means of reflecting the relative effect of the success of each option in the scoring. The weightings agreed by the Project Team were as follows: A Quality of Service 30 per cent B Speed of Implementation 20 per cent C Support Achievement of Performance Targets 25 per cent D Support Service Developments within the Trust 25 per cent Page 25 of 61

26 Quality of Service was deemed to be the highest ranking criteria as the Trust strives to ensure that appropriate clinically effective equipment is in place to support the delivery of a high quality service to all patients across all Trust localities. Support Achievement of Performance Targets was allocated a weighting factor of 25 per cent as the Trust must achieve performance targets, the availability of appropriate equipment would assist the Trust in using its resources in the most efficient way. Support Service Developments within the Trust was also allocated a weighting factor of 25 per cent as new service developments are an important means of enhancing choice and care for patients. The provision of appropriate equipment is often necessary to facilitate delivery of a service development. Speed of Implementation was allocated a weighting factor of 20 per cent as there is an urgent need for the provision of equipment of an improved standard to support implementation of service developments, achievement of performance targets and improve the quality of service Benefit Analysis Each of the options was rated on a score between 1 and 10, with 10 meaning that the option fully met the non-financial criteria. The results of this analysis are recorded in Table 8.1 below Quality of Service Option 1 Do Nothing scored 4 as the existing CT scanner is providing a reasonable quality service, however the constraints of the existing equipment (poor image quality, tube cooling time etc.) are resulting in some patients being transferred to CAH for their diagnostic imaging. Option 2 Purchase of a 16-slice CT scanner, would partially improve the quality of the service provided, however there would be limitations in terms of diagnostic quality and functional capabilities. Option 2 has scored 6. Option 4, purchase new multi-slice scanner, and Option 5, lease new multi-slice scanner, scored 10 as both options would ensure improved quality and capabilities through the provision of a multi-slice scanner (faster reconstruction, faster transmission of volumes to the workstation for isotrophic reconstructions, improved tube life, less heat output, high level of diagnostic ability and shorter scanning times) Speed of Implementation Option 1 Do Nothing scored a 10 as this option is already in place and would not require any additional works. Option 2 Purchase of a single-slice scanner, Option 3 Purchase of a multi-slice scanner and Option 5 lease of a multi-slice scanner scored 8 equally as all options would involve the development of an interim solution to facilitate the replacement of the existing scanner Support Achievement of Performance Targets Both Option 1 Do Nothing scored 5 as there would be no upgrade to the existing equipment and adequate equipment to support the achievement of performance targets would not be in place. Option 2 Purchase of a 16-slice Page 26 of 61

27 scanner scored 6 as this option would provide limited improvement to the existing equipment, equipment of this standard would be insufficient to meet the needs of an acute hospital such as DHH, as such the challenges posed in achieving the performance targets would continue to be faced by the Trust. Option 4 Purchase of a multi-slice scanner and Option 5 lease a new multislice scanner both scored 10 as both options would ensure that adequate equipment was in place to support the achievement of DHSSPS performance targets. Capacity would be increased 4 as DHH would be able to work on all CT scanning waiting lists as the quality of scans would be acceptable to all clinicians throughout the Trust Support Service Developments within the Trust 8.4. Option Ranking Both Option 1 Do Nothing scored 3 as the existing equipment would not be able to support the delivery of all existing and new service developments across the Trust. Option 2 Purchase of a 16-slice scanner scored 4 as a there would be limited improvement to the existing equipment. Option 2 scored 4 against this criteria. Option 4 Purchase of a multi-slice scanner and Option 5 lease a new multi-slice scanner both scored 10 as both options would enable increased diagnostic testing ability and improved quality that would support the delivery of new services within the Trust. The ranking of the options is recorded in Table 8.1 as follows: 1 Option 4 Score Option 5 Score Option 2 Score Option 1 Score Additional revenue funding may be required to facilitate implementation of some of the potential applications of the CT Scanner at DHH. Page 27 of 61

28 Table Non-Financial Evaluation Benefit Criteria Weight Option 1 Option 2 Option 4 Option 5 Score Weighted Score Score Weighted Score Score Weighted Score Score Weighted Score Quality of Service Speed of Implementation Support Achievement of Performance Targets Support Service Developments within the Trust Total Ranking Page 28 of 61

29 9. FINANCIAL APPRAISAL 9.1. Introduction The following section outlines the costs associated with the replacement of the CT Scanner at DHH. Capital Costs; Capital Charges; Revenue Consequences; and Economic Costs (NPVs) Capital Costs The capital costs associated with each of the short-listed options are detailed in Table 9.1 below. Detailed capital costs are provided in Appendix 1. Table Capital Costs (excluding Optimism Bias) Option Option 2 Option 4 1 Option 5 Equipment - 364, ,500 64,500 Enabling Works - 95,000 95,000 95,000 Total - 459, , , Capital Charges The total capital charges associated with each of the short-listed options are detailed in Table 9.2 below. Table Capital Charges (excluding Optimism Bias ) Option 1 Option 2 Option 4 Option 5 Baseline Average Capital Charges 37,778 60,743 72,318 26,018 An analysis of capital charges is included as Appendix 2. Page 29 of 61

30 9.4. Revenue Costs The revenue costs associated with each of the short-listed options are detailed in Table 9.3. Table 9.3 Recurring Revenue Costs Option 1 Option 2 Option 4 Option 5 Baseline Revenue Costs 61,000 61,000 61,000 61,000 Additional Revenue Costs: Lease Costs ,550 Service Costs - 45,000 60,000 60,000 License Costs - 14,500 14,500 14,500 Total Additional Recurring Revenue Costs - 59,500 74, ,050 Rationale for Recurring Revenue costs is included as Appendix Economic Costs Discounted cash flows for each of the options are presented in Appendix 3. Table 9.4 below gives a summary of the net present value (NPV) of each option. Table 9.4 Net Present Values Option Option Option Option Net Present Value 525 1,452 1,666 1,836 Page 30 of 61

31 10. RISK APPRAISAL Introduction Large capital developments carry significant risk. This section discusses key areas of risk in relation to the options, their significance and potential ameliorating action Optimism Bias Adjustment The New Green Book explicitly addresses project risks following a study by Mott MacDonald 5 which identified the tendency for project appraisers to be overly optimistic, overstating benefits and understating timescales and costs. To redress this tendency, HM Treasury have developed an approach which requires appraisers to make explicit adjustments to determine a suitably optimism biased adjusted capital cost and NPV for each option. Based on this guidance, an uplift is required to the capital costs (based on HM Treasury recommended adjustment ranges). There is no specific uplift required for revenue costs. The Green Book enables optimism bias to be reduced according to the extent to which each of the contributory factors have been managed. Appendix 4 illustrates the risk factors for this project and the extent to which the Trust considers it can mitigate against them. This evaluation has generated the following optimism bias adjustment factor, 24.4%. Discounted cash flows for each of the options were recalculated following application of these uplift factors. In applying the optimism bias percentage to capital costs, planning contingencies have been ignored and the optimum bias applied to the remaining capital costs. Table 10.1 below gives the net present value of each of the options after optimism bias adjustments. Table 10.1 Net Present Values Option 1 Option Baseline Net Present Value Adjusted Net Present Value Option Option ,452 1,666 1, ,599 1,841 1,934 5 Mott MacDonald (2002), Review of Large Public Procurement in the UK, Mott MacDonald (2002) Page 31 of 61