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Picture Archiving & Communication System (PACS) - Business CaseTemplateProgramme Nuc Card DOCUMENT NUMBER

Prog. DirectorSub Prog/Proj Mgr

NUC 000

Author Version No V01Version Date 25-May-2004 Status Draft

Picture Archiving &Communication System (PACS) -

Business Case Template

Picture Archiving & Communication System (PACS) - Business Case Template of 41

Nuclear Cardiology Business Case25-May-2004 Draft

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Related Documents

These documents will provide additional information.

Ref no Doc Reference Number Title Version1 NICE Technology Appraisal

73Myocardial perfusion scintigraphy for the diagnosis and management of angina and myocardial infarction

Nov 2003

Glossary of Terms

List any new terms created in this document. Mail the librarian to have these included in the master glossary above [1].

Term Acronym Definition

Myocardial Perfusion Scintigraphy

Coronary artery disease

Myocardial infarction

Coronary artery bypass graft

Percutaneous coronary intervention

MPS

CAD

MI

CABG

PCI

Diagnostic procedure to assess myocardial perfusion

Narrowing within coronary arteries

‘Heart attack’

Cardiac surgery to bypass narrowings within coronary arteries

Angioplasty /stenting of coronary arteries



Contents

1General Guidance ................................................................................................................... 6 2Executive Summary ................................................................................................................ 7

Introduction and Purpose .....................................................................................................7Strategic Case Overview.......................................................................................................7Economic Case Overview.....................................................................................................7Commercial Case Overview..................................................................................................8Management Case Overview..............................................................................................11

3Introduction ........................................................................................................................... 12 4Strategic Case ....................................................................................................................... 12

Introduction .........................................................................................................................12National Context..................................................................................................................12Local Strategic Context.......................................................................................................14The Case for Change..........................................................................................................14

1.1.1 Local Investment Objectives...................................................................................144.1.2 Existing Arrangements............................................................................................154.1.3 Future Business Needs and Service Gap...............................................................15

Potential Scope...................................................................................................................15Main Outcomes & Benefits..................................................................................................16Main Risks...........................................................................................................................18Constraints & Dependencies...............................................................................................21

5Economic Case ..................................................................................................................... 22 Introduction..........................................................................................................................22Options................................................................................................................................22Economic Appraisal Assumptions.......................................................................................24

1.1.2 Costs.......................................................................................................................241.1.3Risks........................................................................................................................241.1.4Benefits....................................................................................................................24

Short-list Appraisal Findings................................................................................................241.1.5Economic Appraisals................................................................................................251.1.6Appraisal of Benefits ...............................................................................................261.1.7 Appraisal of Risks...................................................................................................261.1.8Sensitivity Analysis...................................................................................................27

6Commercial Case .................................................................................................................. 29 Introduction .........................................................................................................................29Specification of Requirements.............................................................................................29Acquisition Strategy.............................................................................................................29Acquisition Process.............................................................................................................29Acquisition Timetable..........................................................................................................29Equipment Supplier.............................................................................................................30

1.1.9Solution....................................................................................................................301.1.10Best Available Pricing............................................................................................30

Commercial Risk.................................................................................................................30Payment Mechanism...........................................................................................................31

1.1.11 Standard Support & Maintenance.........................................................................31Performance Options...........................................................................................................31Dispute Resolution..............................................................................................................32Legacy Contracts.................................................................................................................32Proposed Contract Lengths.................................................................................................32Key Contractual Clauses.....................................................................................................32TUPE...................................................................................................................................32Implementation Time-scales................................................................................................32FRS5 Accountancy Treatment.............................................................................................32Documentation....................................................................................................................32

7Financial Case ...................................................................................................................... 32 Introduction..........................................................................................................................32Assumptions........................................................................................................................33Current Trust Funding.........................................................................................................33Impact on Trust Income & Expenditure Account..................................................................33Notes to the Financial Projections.......................................................................................34Impact on the Trust Balance Sheet.....................................................................................34



Overall Affordability.............................................................................................................358Management Case ................................................................................................................ 35

Introduction..........................................................................................................................35Project Management Structure and Methodology................................................................35Governance Procedures......................................................................................................35Project Plan.........................................................................................................................35Milestones...........................................................................................................................35

1.1.12 Implementation Plan.............................................................................................36Project Reviews...................................................................................................................36

1.1.13Post Implementation Reviews................................................................................361.1.14Project Evaluation Reviews (PERs).......................................................................36

Risk Management Strategy and Framework........................................................................36Benefits Management..........................................................................................................37

1.1.15Arrangements for Benefits Realisation Plan...........................................................37Training...............................................................................................................................37Contract Management Strategy...........................................................................................37

Appendix 1Economic Appraisals (with notes).........................................................................38Appendix 1.1Option A – “Do Minimum”...............................................................................38Appendix 1.2Option B – “Reduced Scope”..........................................................................38Appendix 1.3Option C – “Preferred Way Forward”..............................................................38Appendix 1.4Option D – “Increased Scope”........................................................................38

Appendix 2Financial Appraisal (with notes)............................................................................38Appendix 3Quantification of Benefits......................................................................................38Appendix 4Quantification of Risks...........................................................................................38Appendix 5Local Service Requirement...................................................................................38Appendix 6Service Level Agreement......................................................................................38Appendix 7Commitment to Implementation............................................................................38Appendix 8Project Management Arrangements......................................................................38

Appendix 8.1Project Management Structure ......................................................................38Appendix 8.2Nuclear Cardiology Implementation Project Board.........................................39

Appendix 9 Project Risk Register............................................................................................40Appendix 10 Benefits Realisation Plan...................................................................................40



1 General Guidance

This template and guidance has been issued as an initial version to assist users in starting work on their Nuclear Cardiology business case. The template and guidance will be updated as required to reflect:

• New information available

• feedback from users of the template.

Any comments on the template or suggestions for changes should be directed to: A. [email protected]

This document provides a template and guidance for the development of a business case to support local approval for investment in a Nuclear Cardiology service.

Business cases will need to be in line with delegated approval limits. Current Information relating to delegated limits can be found on the DH Capital Investment Branch Web Site:

http://www.doh.gov.uk/publicprivatepartnership/privatefinanceinitiative/fs/en

The template and tools will enable the production of a business case that satisfies both DH IM&T and local business case requirements.

Each project or programme must have a single, named Senior Responsible Owner (SRO). This individual is responsible for ensuring that the project or programme meets its overall objectives and delivers its projected benefits through execution of the benefits realisation plan.

The SRO of each project must ensure that a formal approach to project management i.e. PRINCE 2 method is applied and that the public sector standard for programme management “Managing Successful Programmes” must also be applied where appropriate. Further details can be found on the Office of Government Commerce (OGC) web site at www.ogc.gov.uk.

The SRO is responsible for ensuring execution of the benefits realisation plan.

The business case will need to show the extent of central funding where this is available.

Strategic Health Authorities will agree with their constituent local organisations a timetable for implementation. Where this involves a number of local organisations working together, individual roles and responsibilities must be clear. The business case will need to identify costs falling to each individual organisation. The Management Case must include a realistic supplier project plan. This will detail timescales, resources and technology that the supplier will use to deliver the required outcomes.


http://www.ogc.gov.uk/

http://www.doh.gov.uk/publicprivatepartnership/privatefinanceinitiative/fs/en


2 Executive Summary

Introduction and Purpose

This Business Case seeks approval from the board of [Name of organisation e.g. XYZ Trust] for investment in a Nuclear Cardiology service.

[Add a brief description of the selected option and the nature of the service provision].

Approval is therefore required for an investment of £x.xmillion (Capital £x.x & Current £x.xmillion) over the ten year period. This represents the “undiscounted” cost for the provision of Nuclear Cardiology costs incurred by XYZ Trust will be £x.x million. Costs include VAT where applicable and exclude the future impact of inflation. [Guidance on recoverable VAT will be available once decisions on assets and payment processes are finalised.]

Strategic Case Overview

The Strategic Case….. [Summarise any key aspects especially relevant local business context]. The overall objectives for the provision of a Nuclear Cardiology service are summarised below. [Present the relevant objectives from the strategic case section later on in this document]

Overall Objective More Specific ‘SMART’ Objectives

Economic Case Overview

The options evaluated were:

[Include some summary explanation and description of the options].

Discounted Costs Option A Option B Option C Option D

Expenditure exc VAT

Plus cost of risk retained

Minus baseline savings

Minus cash releasing benefits

Minus non-cash releasing benefits

Total



Commercial Case Overview

In the provision of a Nuclear Cardiology service the Trust is seeking to comply with NICE Guidance, Technology Appraisal 73, Myocardial perfusion scintigraphy for the diagnosis and management of angina and myocardial infarction.

The acquisition timetable for the Trust is as follows. [This timetable needs to be in line with procurement and ordering arrangements. The suggested contents may need amendment and should reflect what is described in the commercial case]:

Activity Date

Establish need for Nuclear Cardiology provision

Establish local requirements specification and agree with PCTs

Establish timetable applications for funding

Detailed discussions with suppliers and manufacturers

Agree central capital funding

Agree business case for local approval

Acquisition of appropriate resources

Commence implementation

Completion of Acceptance Testing

Review Benefits



The table below outlines the possible placement of risk. [PCT may be replaced, depending on source of funding eg. public/ private partnership – PFI]

Risk Category Potential allocation

Trust PCT Shared

1. Risk of non implementation NICE

2. Risk development of service

3. Implementation Risk

4. Availability and Performance Risk

5. Operating risk

6. Variability of Revenue Risks

7. Termination Risks

8. Technology & Obsolescence Risks

9. Control Risks

10. Residual Value Risks

11. Financing Risks

12. Legislative Risks

13. Other Project Risks

The payment mechanism will be via [State arrangements when known e.g. monthly payments by the Trust, to the PFI, Manufacturers].

The contract for hardware will be between the [State arrangements when known e.g. between manufacturer and the named Trust]



Financial Case Overview

In the Financial Case the affordability of the preferred option has been explored, taking into account both the expenditure (with irrecoverable VAT applied) and anticipated funding. The results are summarised in the table below. This shows that the expenditure (comprising hardware, software and support costs plus the cost of extra local area networking and peripherals to support the service) over ten years will be £x.x (including VAT) and that the total funding over the same period (from both national and local sources) would amount to approximately £x.x, leaving an affordability gap totalling approximately £x.xm over the ten year period as shown in the table. [The table below should be replicated from the Financial Case section of this business case]

x(000’s) Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Total

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

£ £ £ £ £ £ £ £ £ £ £

Item 1 (e.g. service cost)

Item 2

Item 3

Item 4

Item 5

Item 6

Item 7

Total Costs under Proposed Contract(s)

Anticipated Benefit(s)

Anticipated Net Cost

Brought Forward

Carried Forward



Management Case Overview

[Set out the key arrangements for management of the project including reference to the PFI (if relevant), “additional service” or relevant acquisition process]

The project, to acquire and implement a Nuclear Cardiology service is being managed according to PRINCE2.

[Set out the structure and management model being adopted by the project and who has the key project roles including the senior responsible owner].



3 Introduction

This document has been prepared using an agreed format based on the structure set out on the HM Treasury OGC website and adopted by the Department of Health. This is the 5 Case Model, which comprises the following components:

The Strategic Case section, which sets out the Strategic Context and the Case for Change, together with the investment objectives for the Project.

The Economic Case section, which demonstrates that the local organisation (e.g. Trust) has selected the choice of investment which best meets the existing and future needs of the NHS locally, demonstrates selection of the best option, and demonstrates optimum VFM.

The Financial Case section, which confirms overall affordability.

The Commercial Case section, which outlines the content of the preferred and proposed arrangements with the Supplier.

The Management Case section, which demonstrates that the implementation arrangements for the proposed investment are achievable.

4 Strategic CaseThe purpose of the Strategic Case is to demonstrate that the project is necessary to deliver a high quality Nuclear Cardiology service, in line with NICE Guidance (Technology Appraisal 73), and is supported by clear and measurable objectives.

Introduction

The main tenets of the strategic case for the implementation of a Nuclear Cardiology service are outlined below.

National Context

MPS using SPECT (single photon emission tomography) is recommended for the diagnosis and management of coronary artery disease (CAD).

CAD is the commonest cause of death in England and Wales. Angina (chest pain) is the most common symptom of CAD. It is usually provoked by exercise and relieved by rest and may become unstable, when pain is experienced at rest. This may progress to myocardial infarction (MI: heart attack) or sudden death. 2.65 million people in the UK have CAD, of whom 1.2 million have had a MI. In 2001 in the UK, it is estimated that there were 275,000 MIs and 335,000 new cases of angina. The prevalence of CAD increases with age and varies across geographic regions and socio-economic groups.

More than 378,000 in-patients were treated for CAD in the NHS. Medical treatment includes a variety of drugs, which may alleviate symptoms or provide a preventative strategy eg statins for hyperlipidaemia. In severe CAD, revascularisation may be required - 28,500 cardiac surgical procedures and 39,000 percutaneous coronary intervention (PCI) are performed annually. The cost of CAD in 1999 to the UK health care system was estimated at £1.7billion, the total cost being around £7 billion if informal care and productivity losses are included.

The likelihood of CAD in a given individual may be estimated from knowledge of age, gender, ethnic group, family history, symptoms and the results of tests such as the resting ECG (rECG). This approach cannot exclude CAD, and is of limited diagnostic value. Exercise ECG (exECG) (which is unsuitable for people who are unable to perform treadmill exercise) and coronary angiography (CA) are commonly used in diagnosis. CA is not used routinely without prior non-invasive testing, due to associated mortality and morbidity and high cost (EMPIRE study). Potential complications include nonfatal myocardial infarction (0.1%), stroke (0.1%) and death (0.1-0.2%).



Non-invasive techniques that are commonly used include myocardial perfusion scintigraphy and stress echocardiography. Magnetic resonance imaging and positron emission tomography are used less frequently. MPS involves the intravenous injection of small amounts of radioactive tracers (3 are available in UK: thallium-201, technetium-99m-sestamibi and technetium-99m-tetrofosmin), allowing evaluation of blood supply to living muscle cells both during stress and at rest. The distribution of the radiotracer is imaged, often synchronised to the ECG, using a gamma camera, which rotates around the subject. Homogenous tracer uptake throughout the heart muscle on both the stress and rest images suggests normal coronary blood supply and the absence of clinically significant infarction. An area of reduced uptake on the stress images that normalises at rest is termed a reversible perfusion defect and suggests significant coronary narrowings. A defect which is present on both stress and rest images (fixed defect) indicates loss of living heart muscle such as after a MI. The complications of MPS are similar to those of an exercise ECG, and are related to the stress component of the test (whether by exercise or pharmacological stimulation), with morbidity around 0.02% and mortality 0.01%. The radiation exposure is similar to that from an uncomplicated coronary angiogram. The cost of a SPECT scan is estimated (2002 NHS reference costs) at £265, in comparison to £104 for an exECG and £1103 for a coronary angiogram.

NICE appraisal outlines the diagnostic performance of SPECT, expressed as sensitivity and specificity, for CAD seen at coronary arteriography. Median sensitivity values for SPECT were higher (81%, range 63-93%) in comparison with stress ECG (65% range 42-92%). Specificity values were similar. The American College of Cardiologists/ American Heart Association Task Force guidelines quote an average sensitivity of 89-90%, and specificity of 70-76%.

SPECT MPS has a particular value for long term prognosis. In a meta-analysis of 15,000 patients with abnormal SPECT, this was associated with an annual cardiac event rate of 6.7%, whereas in 20,963 patients with a normal SPECT, the event rate was 0.7%. Furthermore the size and severity of the perfusion defect can predict the likelihood of future cardiac events.

SPECT MPS provides independent prognostic information in subgroups: women (where the stress ECG has low predictive accuracy); following myocardial infarction (where the ECG is abnormal and sECG is less useful); patients who have undergone PCI or cardiac surgery; medically treated patients with left main and/or three vessel disease, patients hospitalised with normal or non-diagnostic stress ECG and patients with diabetes. The NICE assessment concludes that the evidence “consistently suggested that SPECT provided valuable independent and incremental information predictive of outcome that helped to risk stratify patients and influence the way in which their condition was managed”.

Cost Effectiveness;

NICE assessment compared costs and outcomes of SPECT with alternative diagnostic strategies. Overall it was concluded “that direct CA (without any prior test) was cost effective when the prevalence of disease was high. At low levels of prevalence, strategies involving SPECT and/or stress ECG were considered to be a better use of resources than a strategy of direct CA. Furthermore, strategies involving SPECT were often found to be dominant or provided additional benefits that might be considered worth the additional cost compared with the sECG-CA strategy.”

Using financial modelling, incremental cost effective ratios (ICERs) have been compared for investigational strategies. When compared with stress ECG-CA, SPECT-CA has more favourable ICERs than direct CA at low levels of CAD. At high prevalence levels, stress ECG-CA and direct CA strategies are favourable.

Implications for the NHS

In 2000 the British Nuclear Cardiology Society survey, there were 1,200 SPECT scans per million population. Based on current revascularisation and CA rates it is calculated that the optimal level of provision to be around 4,000 SPECT per million. The estimated annual revenue cost would be in the order of £27million.



Local Strategic Context

[Include details of the local context here. This section should set out key organisational strategies e.g. around implementation of the service. It should also include an organisational overview service configuration of the existing healthcare delivery arrangements. Planned changes should also be recorded e.g. service reconfiguration. ].

Suggested headings

• Referral population

• Local workflows – rapid access chest pain clinics? Cardiac outpatients?

• How will the service be used – Diagnosis? Prognosis?

• Number of coronary angiograms : normalcy rate

• Number of revascularisations

• Existing resources

• Service reconfiguration

The Case for Change

[Complete this section in the local context outlining the purpose of the investment, identifying problems with existing arrangements and how future requirements will introduce a gap in services which investment in nuclear cardiology will alleviate].

1.1.1 Local Investment Objectives[There are a number of investment objectives common to all local implementations. It is for individual Trusts to set SMART (specific, measurable, achievable realistic and time-constrained) objectives targets in line with anticipated benefits. This generic set is provided as a starting point]:

Investment Objective 1

To implement the NICE guidelines

• Time scales


To reduce the angiography normalcy rates

• Numbers of angiograms currently: elective/emergency


To provide more effective clinical diagnostic imaging

• The ratio of MPS : angiography : revascularisation



4.1.2 Existing ArrangementsThe existing arrangements for imaging in the [XYZ] Trust are as follows:

[Describe the local configuration of services, existing costs, etc using material from the Local Service Specification Toolkit]

Local services are currently experiencing a number of problems due to the following situations…

[Describe the main issues of the local situation and expand around the following points adding additional factors as appropriate:

• The current provision of gamma cameras.

• The current provision of nuclear cardiology services.

.

4.1.3 Future Business Needs and Service GapAt a local level the existing arrangements are characterised by [The list may need customising according to local circumstance]:

• Provision of gamma cameras within the Trust

• Radiopharmacy arrangements/provision

• Medical staff availability and appropriate experience

• Provision of technical support

• Provision of appropriate equipement and resources for providing stress testing

[There may be issues with the siting of the service which will alter according to local environments eg nuclear medicine,radiology, cardiology, physics].

Potential Scope

[Each Trust will have a somewhat different requirement, dependent primarily on the referral population].

[Scope for workload expansion will depend on developments within Trusts eg rapid access chest pain clinics.]



Main Outcomes & Benefits

The main outcomes and benefits anticipated, for key stakeholder groups, or achievement of the key investment objectives, are set out below:

[This list is generic and needs to be considered in the local context and amended accordingly by addition or removal of certain items. The aim is to establish that cash-releasing benefits can offset the revenue costs of implementing a nuclear cardiology service.]

Investment Objective 1 Ref Related Benefits Criteria

Cas

h R

ele

asin

g

No

n-

Cas

h R

ele

as

ing

Qu

alit

ati

ve

To implement the NICE guidelines

Patients

B01 Improved diagnostic service Y

B02 Special groups – females, diabetics Y

Clinicians

Expansion of variety of diagnostic work, increased job satisfaction

Y

Managers

Greater service throughput Y

Improvement in waiting times performance

Y



Investment objective 2

Ca

sh R

ele

as

ing

No

n-

Ca

sh

Re

leas

ing Q

ua

litat

ive

To reduce the angiography normalcy rate

Patients

To reduce the exposure of patients to angiography with associated risks

Y

To perform angiography on appropriate patients

Y

CliniciansReduced risk associated with MPS vs angiography

Y

Managers

Appropriate use of resources Y



Main Risks

Risks have been divided into seven high level categories.[Countermeasures to the risks included in the business case should be identified.]:

• Design Risks [These are unlikely to apply]

• Development / Implementation Risks [Some of these may not apply]

• Change Management Risks

• Training / User risks

• Operational Risks


Investment Objective 3 Ref Related Benefits Criteria

Cas

h R

ele

asin

g

No

n-

Cas

h

Re

lea

sin

g Qu

alit

ati

ve

To provide more effective diagnostic imaging

Patients

To provide effective triaging prior to angiography

Y

Appropriate intervention and revascularisation

Y

CliniciansImproved decision making YImproved prognostic markers Y

Managers

Ref Related Benefits Criteria

Cas

h R

ele

asin

g

No

n-

Cas

h

Re

lea

sin

g Qu

alit

ati

ve

Patients

Clinicians

Managers


• Termination Risks.

• Technology and Obsolescence Risks

1.0 Design Risks Countermeasure

1.1 Change in requirements of the NHS Trust i.e. define capacity in terms of all known developments within the Trust.

1.2 Change in Requirements of Service

1.3 Change in requirement of Users

2.0 Development/Implementation Risks

2.1 Trust change to specification

2.2 Delays in functioning of gamma camera

2.3 Insufficient trained staff to implement service

2.4 Trust's implementation costs exceed budget

3.0 Change Management Risks

3.1 Organisation & staff not geared up culturally or practically e.g. inadequate prep, start planning, train & develop, change management

3.2 Organisation not sufficiently prepared or trained to implement.

3.3 Services disrupted because of implementation/lack of familiarity with systems

3.4 Loss of key staff e.g. project manager, project champions,

4.0 Training/User Risks

4.1 Training Costs exceed budget

4.2 Loss of user interest and motivation due to project delays, poor communication etc

5.0 Operational Risks

5.1 Higher than expected operating costs

5.2 Insufficient trained staff to operate systems

5.3 Insufficient (medical) staff time for reporting

5.4 System/services unable to respond to increased activity/throughput

5.5 Non Cash releasing benefits not realised

5.6 Non Cash releasing benefits delayed

5.7 Cash releasing benefits not realised

5.8 Cash releasing benefits delayed

5.9 Cost of additional activity/throughput

6.0 Termination Risks



6.1 Services not able to meet changed requirements resulting from Trust changes e.g. merger, new services

7.0 Technology & Obsolescence Risks

7.1 Failure of Imaging to deliver outputs & meet existing and future business needs



Constraints & Dependencies

The potential constraints can be grouped into 4 main areas:

• Financial Affordability

[The financial approach will dependent on local implementation.]

• Communications

[Trusts may need to invest in their LAN infrastructure and ensure it has the capacity to store images and reports. Communication with IT departments at an early stage is advisable ].

• Timescales

[Service development and reconfiguration issues may place constraints on the timescales for implementation. There may also be urgent operational need to support new sites, new build or services such as Diagnosis and Treatment Centres (DTC).]

• Strategic and Organisational

[Other initiatives may compete for investment and local skills. There may be organisational issues within Trusts].

There are also some common dependencies:

• Infrastructure

[The project is dependent on the availability of other nuclear medicine provision and the siting within the Trust]

• The support of the stakeholders

[A successful implementation of nuclear cardiology is dependent on support from stakeholders. Funding flows may also have to be secured from PCT Stakeholders].



5 Economic Case

Introduction

The purpose of the Economic Case is to confirm the preferred option, to establish the preferred option to be acquired and to demonstrate Value for Money.

This section of the business case provides:

• an overview of the options (short lists) appraised, together with the selection of the preferred option. [A gamma camera with attenuation correction is estimated to cost £250,000. Local requirements will inform the preferred option. Costings need to include the consumables].

• a full account of the resultant acquisition and evaluation process, leading to the selection of the preferred supplier; and

• associated economic analysis of the shortlisted options

Options

[The business case will evaluate a “do minimum” option. Two more options are possible, involving decrease or increase of scope, which would be dictated by local circumstances e.g. availability of funding. This will depend on the referral population and the requirement to comply with NICE ]

The following options have been considered and appraised.

Option A – “Do Minimum” –

Description This option provides a benchmark for Value for Money and is predicated upon the continuation of current service for diagnosis and prognosis of CAD

Scope [To be defined by trust] This should include a description of the current service – activity and resources used.

Service Delivery [To be defined by trust]

Implementation [To be defined by trust]

Funding [To be defined by trust]

Option B – “Reduced Scope” –

Description This option is predicated on the implementation of a limited service eg by using mobile service

Scope [To be defined by trust]

Service Delivery

Implementation




Option C – “Preferred Way Forward ” –

Description This option involves purchase of a gamma camera, and implementing a new service

Scope

Service Delivery

Implementation


Option D – “Increased Scope” –

Description This option is predicated on the provision of a service with unutilised capacity, with the option of attracting external work and/or funding.

Scope [To be defined by trust]

Service Delivery

Implementation




Economic Appraisal Assumptions

1.1.2 CostsThe following assumptions have been made when developing the costs:

• The contract period for the investment appraisal will be for [usually 30 (the lifetime of the contract to the nearest number of whole years)] years.

• Revenue payments are made in line with the commencement of delivery of services

• Costs are discounted at 3.5% as advised by the Green Book 2003

• Implementation is unconstrained by other programmes and will continue in line with the project plan (as described in the Management Case).

• Technology refresh or projected replacement with technology upgrade must be included, typically at 5 to 7 years. [Check if technology refresh is covered as capital or recurrent revenue in the cost model. Costs should be used to populate the Costing Model and detail included in the relevant Appendix. Each option will be specified and costed separately using the Costing Model]

1.1.3 RisksThe following assumptions have been made when developing the risks:

• The risk retained is determined by the clauses of the contract

• All potential risk impacts are annual

• All likelihoods are annual

• Risks exclude inflation. Discounted risks exclude inflation

• Risks are discounted at 3.5% as advised by the Green Book 2003

1.1.4 BenefitsThe following assumptions have been made when developing the benefits:

• Benefits are assumed to be common across all options in terms of the list of individual benefits. The values/scores of individual benefits can, however, be different between these.

• Benefits exclude inflation. Discounted Benefits exclude inflation

• Benefits are discounted at 3.5% as advised by the Green Book 2003

Short-list Appraisal Findings

The results were as follows for the Economic Appraisals, including the evaluation of qualitative benefits, associated risks and sensitivity analysis.



1.1.5 Economic Appraisals

The table below summarises the key results of the economic appraisals for each option. The full appraisal is presented in 8.

Summary of Economic Appraisals

Option A

“Do Minimum”

Option B

“Reduced Scope”

Option C

“Preferred Way Forward”

Option D

“Increased Scope”

Undiscounted(£)

Net Present Cost (Value)

(£)

Undiscounted(£)


(£)

Undiscounted(£)


(£)

Undiscounted(£)


(£)

• Capital

• Recurrent

• Cost of Risk Retained

Total Cost

• Cash-Releasing Benefits

Costs net Cash Savings

• Non-Cash-Releasing Benefits

TOTAL



1.1.6 Appraisal of Benefits The benefits associated with the project were considered, scored, weighted and, where possible, valued. Benefits that have been valued are reflected in the Economic Appraisal in Section 5 and section 4.1.2 and the details of the valuation are set out in 8. The table below presents a summary of appraisal for the benefits that have not been valued.

Following a workshop using the agreed methodology (see DH Capital Investment Manual) for the assessment of benefits, the results were as follows:

Summary Benefit Appraisal Results

Benefit Criteria & Weight

Option A

“Do Minimum”

Option B

“Reduced Scope”

Option C

“Preferred Way Forward”

Option D

“Increased Scope”

Raw & Weighted Scores

Ra

w

We

igh

t

Ra

w

We

ight

Ra

w

We

igh

t

Ra

w

We

ight

Cash-releasing benefits

Non-cash releasing benefits

TOTAL

RANK

1.1.7 Appraisal of RisksThe risks associated with the project were considered, scored, weighted and, where possible, valued. Risks that have been valued are reflected in the Economic Appraisal in Section 5 and the details of the valuation are set out in 8). The table below presents a summary of appraisal for the risks that have not been valued.

Summary of Risk Appraisal Results

Risk Criteria & Weight

Option A- Option B- Option C- Option D-

Raw & Weighted Scores R

aw

We

igh

t

Ra

w

We

ight

Ra

w

We

igh

t

Ra

w

We

ight

1. Risk of non implementation



Risk Criteria & Weight

Option A- Option B- Option C- Option D-

NICE




5. Operating risk




9. Control Risks


11. Financing Risks



TOTAL

RANK

1.1.8 Sensitivity AnalysisSensitivity analysis was undertaken on the basis of “switching value” as laid down in the Treasury Green Book and the DH Capital Investment Manual. The outcomes of applying switching values to the discounted risk adjusted cost figures are shown below.

• [One method is to compare the effects of changes in the usage or performance metrics of the options

• The second method is to look at the effect of changes in risk or benefits between the various options

• The third is to examine changes in price.]



Summary Sensitivity Analysis

Change in Costs (%) Option A-

“Do Minimum”

Option B- Option C- Option D-

Capital Costs

Current Costs

All Costs

Non Releasing Cash Benefits

NET PRESENT VALUE



6 Commercial Case

Introduction

The purpose of the Commercial Case is to demonstrate the integrity of the acquisition and that the contract is appropriate.

Specification of Requirements

Acquisition Strategy

[Arrangements for the acquisition process. It is likely that a full procurement via OJEC (OJEU – Official Journal of the European Union) would be required e.g. gamma camera purchase, see the specification document.

In certain circumstances existing PFI build or equipment management programmes will be predicated on an acquisition solution, but note that in most cases these will exclude IT provision. However, for some current PFI projects, the acquisition of services is independent, but preferential financing may be available].

Acquisition Process

[Details required in line with local requirements]

Acquisition Timetable

Activity Date

Complete

Establish Local requirements

Establish timetable slot

Detail discussions with suppliers/ manufacturers

Agree central capital funding

Agree business case for local approval

Complete additional services form (SLA)

Commence Implementation

Completion of Acceptance Testing

Review Benefits



Equipment Supplier

1.1.9 Solution

1.1.10 Best Available Pricing

Commercial Risk

This section provides an assessment of how the associated risks might be apportioned between NHS organisations and the PFI/manufacturer (where equipment leased), in accordance with the general principle that risks should be passed to “the party best able to manage them”, subject to Value for Money.

The table below outlines the possible placement of risk under a managed service style contract structure.

Risk Category Potential allocation

Trust Supplier Shared

1. Risk of non implementation NICE




5. Operating risk




9. Control Risks


11. Financing Risks





Payment Mechanism

[Trusts may consider lease options instead of capital purchases].

The organisation will make payments in respect of the proposed above Services as follows:

Item Proposed Supporting Payment

Upfront Costs

Capital- Hardware

Capital- Software

Capital- Installation

Training

Operational Costs

Standard Support Contract

Specialist Support Contract(s)

Initial one off payment (£incl. Vat)




Annual rental and support & maintenance payments of:

£ (inclusive of Vat)

£ (inclusive of Vat)

1.1.11 Standard Support & Maintenance

The annual charge is for ………………response time with on site next day response call out, different agreements may be made due to provision of ‘first line’ maintenance by Trust engineers.

Performance Options

This information is contained within the schedule of the Service Agreement (8) which sets out the standards to which the Contractor must deliver the Services, the mechanism by which Service Failures will be managed, and the method by which the Contractor's performance under this Agreement will be monitored. This Schedule comprises three key areas:

• Service Level Specification – which details the services to be provided and the levels of performance to be attained

• Service Failures – setting out the definitions, levels of failure and consequences

• Performance Monitoring System – describing the procedures to be followed in gathering and reporting the performance achieved in the delivery of the contract.

The principles of the mechanism employed are to give a well defined boundary of what must be delivered together with a fair mechanism to allow the deduction of points where this has failed to occur and a clear and well structured process that allows all parties to determine both what has happened and the reasons and responsibilities where it has not been in line with the expectations of the contract.



Dispute Resolution

[To be determined]

Legacy Contracts

[Trust to provide details of legacy (existing systems, agreements or contracts and how they will be managed to deal with changes described above).]

Proposed Contract Lengths

[It is assumed that the length of the agreement with the manufacturer will be for the length of time the equipment is operational, longer agreements may be made as part of a managed equipment programme].

Key Contractual Clauses

[It is assumed that standard contract documentation will be drawn up by the Trust and used as the basis of the agreement. Any local addition, should be shown in the attached schedules to the contract].

TUPE

It is assumed that there are no issues relating to the transfer of existing staff to a new employer. [This must be checked locally]

Implementation Time-scales

It is anticipated that all service(s) contract(s) and associated Service Level Agreements will commence in [month] n [xx] as shown within the project plan in the Management Case.

[Describe any phased arrangements]

FRS5 Accountancy Treatment

[The accountancy treatment for the project is, in the main, dependent upon the outcome of the preferred deal with the potential service providers. The impact upon the balance sheet is outlined within the Financial Case. This needs to be discussed with project accountant].

Documentation

The final service level agreement is included in (8).

7 Financial Case

Introduction

The purpose of the Financial Case is to demonstrate affordability for the preferred option established in the Economic Case and the affordability of the proposed Deal over the life of the contract.

It also sets out the anticipated payment stream (£) for the investment over the life expectancy of the project (i.e. 10 years) and the Balance Sheet treatment of any assets underpinning the service provision.

[The Costing Model spreadsheet.]



Assumptions

The following assumptions have been made when considering affordability:

• National / Local funding - The Common Requirements

• Replacement

• Trust Implementation

• Backfill Training

• Change Management

• Infrastructure.

• Irrecoverable VAT – As VAT goes to Her Majesty’s Treasury (HMT) it has no effect on the Public Sector as a whole and is therefore excluded from the economic analysis. But from an affordability and cash flow point of view the money still needs to be found so it is included here.

• Capital Charges – All Public Sector bodies are expected to make a 3.5% return on assets. It has been assumed that, given the preferred structure, payment for the service should have a strong bias towards Capital.

Current Trust Funding

The Trust has not made any provision in its three year investment plans for any additional funding to support this programme.

The Trust is therefore entirely reliant on any additional funds and a phased redeployment of current systems spend. [Check that any assumptions are checked with the Director of Finance, Strategic Health Authority and Management].

Impact on Trust Income & Expenditure Account

This shows that the expenditure (comprising hardware, software and support costs [plus the cost of extra local area networking and peripherals where appropriate] to support Nuclear Cardiology) over ten years will cost £x.x including VAT and that the total funding over the same period (from both national and local sources) would amount to approximately £x.x, leaving an affordability gap totalling approximately £x.x over the ten year period as shown in the table below.



x(000’s) Yr 0 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Total

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

£ £ £ £ £ £ £ £ £ £ £

Gamma camera

250 250 500

Building costs

75 25 100

Item 3

Item 4

Item 5

Item 6

Item 7

Total Costs under Proposed Contract(s)

Anticipated Benefit(s)

Anticipated Net Cost

Brought Forward

Carried Forward

Notes to the Financial Projections

[Include relevant notes and assumptions that underpin the financial projections. Include assumptions around residual values and VAT].

Impact on the Trust Balance Sheet

The proposed capital expenditure of £x.xm in year 0- for equipment will appear on the balance sheet of the Trust.

The contractual commitment, as described in the Commercial Case, to pay a Service Charge over ten years for nuclear cardiology-related Services, will be recorded on the Trust’s balance sheet as a long term financial obligation.



Overall Affordability

The proposed cost of the project is £x.xm over the ten years of the expected lifetime of the contract. The full financial appraisal is presented in 8

The Director of Finance has confirmed in principle that the provision of funds for the required acquisition of the services is affordable within the period for which funding is known (next 3 years) and will be accommodated in future years.

8 Management Case

Introduction

The purpose of the Management Case is to demonstrate that the project is well managed and can be successful.

Project Management Structure and Methodology

With an investment of the size and complexity of that proposed under this business case, sound project management is recognised as being of paramount importance.

A Project Team comprising staff from various parts of the Trust has therefore been established to take forward the work required. 8 presents the Project Management Arrangements.

The project has the support of senior executives and clinicians, and the key decision-making and consultative bodies within the Trust.

Management commitment extends to rigorous planning and regular progress monitoring.

The Project Board reports regularly to the Trust Board. The Trust Board will stipulate any other reporting requirements.

Governance Procedures

An established project management methodology will be utilised which brings these requirements together into a structured process. The project management methodology used in the project is PRINCE2 (which meets the requirements outlined above and promotes arrangements to ensure both rigorous and structured planning and monitoring and the appropriate involvement of senior staff).

Project Plan

The project technical and resource plans are set out in outline form and as a Gantt chart [These need to be developed locally]. Key activities are also summarised. Supplied with this business case in electronic form is a Microsoft Project file providing a detailed project plan.

Once the acquisition phase of the project is completed the membership of the project team will be reviewed to ensure that it is appropriate for the implementation phase. Discussions are already taking place on the implementation phase so that the project can move smoothly into implementation following signing of any formal agreement.

Milestones

The diagram below presents the main milestones in the implementation plan. [These need to be developed locally].



1.1.12 Implementation PlanThe implementation project will start with site preparation, final workflow analysis and the arrival on site of the gamma camera(s) and a workstation that can be set up for teaching purposes.

Project Reviews

In accordance with good practice the project has the following outline arrangements in place for project reviews:

1.1.13 Post Implementation ReviewsThe project plan contains a formal date for completion of the post-implementation review.

1.1.14 Project Evaluation Reviews (PERs)The Trust intends to use a formal post-project evaluation tool, using the benefits detailed in this business case as the success criteria. The project plan contains a formal date for completion of the project evaluation review. The objectives of the evaluation will be:

• Identify how well the project aims and objectives have been achieved.

• Determine if the project timescales were met, both overall and for each key milestone, and what corrective actions, if any, were taken.

• Determine if the project costs were controlled and were within budget, both overall and for each of the parts of the project, and what corrective actions, if any, were taken.

• Against the benefits realisation plan identify what benefits have been achieved (both cash releasing and non-cash releasing) and seek the realisation of any outstanding benefits, including the implementation of any procedural and process changes.

• Assess the efficiency of the acquisition process and document the shortcomings for the benefit of future projects.

This will be carried out for the project, in consideration of and in conjunction with any NHS Gateway 5 criteria being used as the framework for these reviews.

Risk Management Strategy and Framework

The project will be managed in accordance with PRINCE 2.

• The project’s resultant Risk Management Strategy is twofold. Firstly, to manage, mitigate and control risks, and secondly, to ensure that risks allocated – or transferred to the Service Provider(s) – remain the responsibility of the Service Provider(s).

• A Risk Management Plan has been developed these have been allocated in a risk register (8).

• As part of its project management approach the project team is developing a comprehensive risk register to track and manage project, service and business risks. This register will be developed to support the management of the contract during live service operation and will be considered at quarterly service meetings. Risks will be managed at the appropriate level with escalation to the relevant programme board via the service management board when appropriate.

• The risk register will be managed and monitored on a regular basis by the project team and periodically assessed by the Project Board



Benefits Management

1.1.15 Arrangements for Benefits Realisation PlanA detailed benefits realisation plan is set out in 8.

The high level Benefits Realisation Strategy is to:

• Identify the benefits and responsibility for their delivery

• Establish baseline measurement where possible

• Quantify benefits where possible

• Periodically assess likely realisation and any actions required

• Record further expected benefits identified during the project

• Measure outcomes

Training

The project team will ensure that the training plan identifies the resources required for delivery of the training (including the infrastructure and equipment requirements) and will ensure that the training plan identifies the split of training responsibilities.

Contract Management Strategy


Picture Archiving & Communication System (PACS) -Business Case Template

Appendix 1Economic Appraisals (with notes)This section includes the detailed cost, risk and benefit analysis for each of the options identified in the Economic Case.

Appendix 1.1Option A – “Do Minimum”

Appendix 1.2Option B – “Reduced Scope”

Appendix 1.3Option C – “Preferred Way Forward”

Appendix 1.4Option D – “Increased Scope”

Appendix 2Financial Appraisal (with notes)This appendix contains the full costs and affordability analysis of the preferred option.

Appendix 3Quantification of Benefits[The quantification of benefits will need to be determined by individual Trusts, dependant upon information in the economic case.]

Appendix 4Quantification of Risks[The quantification of risks will need to be determined by individual Trusts, dependant upon information in the economic case.]

Appendix 5Local Service Requirement[This will need to refer to NICE guidelines and include:

• Number of scans required (based on local population) including future increases in activity.

• Definition of existing service capacity, replacement of existing equipment etc.• Assessment of other options for investigation, e.g. stress echocardiography.• Effects on other service, e.g. angiography.]

Appendix 6Service Level Agreement[To be completed locally.]

Appendix 7Commitment to Implementation[A letter of commitment to the implementation plan, endorsed by all parties to the plan, should be incorporated here.]

Appendix 8Project Management Arrangements

Appendix 8.1Project Management Structure

[The chosen project management structure should reflect the requirements to deliver a nuclear cardiology service within the Trust



A proposed structure is shown below. This should be updated to reflect the actual structure].

Appendix 8.2Nuclear Cardiology Implementation Project Board

The Project Board meets every [xx] months or more frequently when required, receiving reports from the project manager and making any decisions that are required

[Identify the members, their position and responsibility in the table below].

NAME POSITION & RESPONSIBILITY


Nuclear Cardiolgy Project Board (PB)

Project Training Group (PTG)

Project Implementation Group (PIG)

Project Steering Group (PSG)

Clinical User Group (CUG)

Project Team (PT)

Quality Assurance Group (QAG)

Supplier Liaison Group (SLG)


Project Director

Overall project manager for the project

Clinical representative

Clinical representative

CHD collaborative representative

Appendix 9 Project Risk Register[To be developed locally. For each risk listed in the register the following information should be documented:• risk number (a unique identifier)

• the date raised

• who raised the risk

• the risk owner (responsible for tracking the risk)

• a description of the risk

• an assessment of the probability of the risk materialising

• an assessment of the risk’s potential impact (e.g., high / medium / low)

• the importance of the risk (a combination of the probability and the impact)

• proposed countermeasures or mitigating actions

• risk status (e.g. proposed / in progress / complete)]

Appendix 10 Benefits Realisation Plan[To be developed locally. For each benefit identified, the following information should be documented:

• a description of the benefit

• the investment objective(s) to which it is related

• the nature of the benefit

o financially quantifiable, cash-releasing – state the value

o financially quantifiable, non-cash-releasing – state the value

o quantifiable – state the quantity and units

o qualitative

• any assumptions on which the benefit is based

• the tasks required to realise the benefit

• the monitoring mechanism / performance indicator to be used to track delivery of the benefit]



• ownership of the benefit (i.e. responsibility for its realisation)

• review date (to assess realisation of the benefit)


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