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Board Paper 13.10.15 Item 15/252 To improve health and provide excellent care Title: Business Case for the replacement of the 4th Liner Accelerator in the North Wales Cancer Centre Author: Mr Damian Heron, Director of the North Wales Cancer Network Responsible Director: Mr Geoff Lang, Director of Strategy Summary of Key Issues: The 4th Linear Accelerator in the North Wales cancer centre is now nearing the end of its operational life and is presenting problems in terms of reliability and resilience. The attached Business Case sets out a series of options for the replacement of this capacity and recommends that the 4th Linear Accelerator be replaced. The business case has been reviewed by the Finance and Performance sub-Committee and other appropriate committees as outlined in the organisation’s Procedure Manual for Managing Capital Projects. Access to Charitable Funds has been agreed by the Charitable Funds Committee. Action Required By To: (Please tick all that apply. This section should match the recommendations made in the paper) Board: Note Endorse Ratify Approve √ That the Board approve the replacement of the 4th linear accelerator with capital funding from Charitable Funds. Key Impacts: (Please provide a short summary against all that apply) Corporate Adequate capacity for radiotherapy treatment is Objective critical for the Board to achieve its targets in terms of timeliness of treatment for cancer patients. Finance The capital and revenue consequences are summarised in the paper. Capital for this investment is proposed to be sought from charitable funds. Quality Impact Assessment The proposed investment will support the delivery of a high quality service. 1 Health and Care Standards The proposed development is relevant to the following standards: Equalities, Diversity & Human Rights Risk & Assurance Safe care Effective care Timely care The preferred option maintains the existing delivery model. The business case has been completed in accordance with the organisation’s Procedure for Managing Capital Projects. It incorporates a risk assessment. Disclosure: Betsi Cadwaladr University Health Board is the operational name of Betsi Cadwaladr University Local Health Board Board Coversheet v6.0 May 2015 2 Replacement linear accelerator – Overview 1) Purpose The purpose of this paper is to describe the preferred option of procurement of a replacement linac that would maintain the current establishment of 4 machines using them all in delivery of radiotherapy. 2) Current provision The North Wales Cancer Treatment Centre (NWCTC) at Glan Clwyd Hospital was established in 2000 with the purpose of providing external beam radiotherapy to the North Wales population. Previously radiotherapy was delivered by Clatterbridge Cancer Centre (CCC), Wirral and The Christie, Manchester. Currently NWCTC houses 4 linacs in 5 bunkers – this resource delivers approximately 90% of the external beam radiotherapy required by the North Wales population. Linear accelerators The operational life of a linac is widely considered to be 10 years and Table 1 describes where the machines are in terms of their life cycle. Table 1. Current linear accelerators -NWCTC Machine Machine 1 Machine 2 Machine 3 Machine 4 Age 11 years 6 years 6 years 2 years Replacement Year 2014 2020 2020 2023 It is noteworthy that Machine 1 is the last of the initial three machines purchased post 2000 and as such it does not have the same technical abilities that machines 3 to 4. This significantly restricts the type of treatment and patients that can utilise this machine. Funding Revenue funding of the radiotherapy/physics service is based on a 3 machine service however the centre was in receipt of a new additional 4th machine in 2013 which increased the establishment to 4 viable machines. Attempts have been made to use all 4 machines in a manner that increases flexibility and business continuity but this had gradually degraded due to the viability of the now obsolete machine and the revenue being limited to a 3 machine service. 3) Capacity drivers There are a range of drivers that support the need for development in radiotherapy services 3 3.1 Cancer burden Whilst the rise in the number of new cancer cases is relatively subtle year on year in North Wales the increase in oncology treatment including radiotherapy is more consistent with on average a 6% increase in workload being seen year on year. 3.2 Waiting times Increasingly the 62 day cancer waiting time (USC) has been an issue in radiotherapy and though access to radiotherapy has been the cause of relatively few breaches a considerable effort is now required to move patients within the system to ensure radiotherapy is delivered by breach dates. The key issue regarding waiting times is that of time to radiotherapy for all indications and Table 2 below identifies performance within Wales. Table 2. Radiotherapy treatment times in Wales – April 2015. Referrals (Radical) Referrals (Palliative) Total Waiting times – Target 100% within 28 days with radical intent Waiting times – Target 100% within 14 days with radical intent Velindre 208 86 294 Swansea 115 60 175 North Wales 95 60 155 94.2% 93% 69.5% 96.5% 100% 60% This performance has been noted during Peer Review with waiting times for radiotherapy being recorded formally as a serious concern 3.3 Demand predictions The updated “Radiotherapy Equipment Needs and Workforce implications 20062016. Welsh Scientific Advisory Committee” recommends that, even if capacity is increased from 2011 levels by 20%, NWCTC will require a minimum of 5 linacs by 2016 and a minimum of 6 linacs by 2020 to deliver the service. Activity for capacity and demand discussions is now quoted in “attendances” rather than “fractions”, where a “fraction” is equivalent to 0.87 “attendances”. The Malthus Cymru model takes into account incidence and demographics. For NWCTC, the Malthus tool projects a demand of 43,200 attendances by 2016 (equivalent to 49,655 fractions or 49.6 linac hours per day) and 47,800 attendances (equivalent to 54,942 fractions or 54.9 linac hours) by 2020 assuming an access rate of 41%. This analysis would suggest 5 lin accs functioning approximately 10 hrs per day on average. 4 In addition, NRAG recommends that radiotherapy services consider the introduction of a service efficiency machine and that radiotherapy services plan so that they operate at 87% capacity to allow for breakdowns and variations in demand. 3.4) Strategic actions As part of the cost improvement programme within the Cancer Clinical Programme Group (CPG) a programme of oncology consolidation has taken place over the past 5 years resulting in repatriation of radiotherapy work from Clatterbridge Cancer Centre (CCC). As such radiotherapy is now offered to patients with colorectal, upper GI and breast cancer who would have previously attended CCC via Chester. In addition radiotherapy for primary brain tumours has been repatriated from CCC for all cases within North Wales. Although this action required some local investment and has added to the overall workload it is acknowledged that the reduction in the CCC contract has been approximately £1.6m. 3.5) Technology Changes in radiotherapy technology have been identified such as Intensity Modulated Radiation Treatment (IMRT) and there has been an expectation that all relevant patients are now subject to this technique. North Wales has responded to this demand with IMRT being delivered to most patients who would benefit from the technique. However this technique can only be delivered by 2 of the current 4 linacs and as a result flexibility within the overall radiotherapy resource has become more limited. 4) Options 4.1) Short term/immediate options A number of options have been considered as part of the business case and these are considered below in Table 3. Table 3. Option appraisal Option1 Description Advantages Do nothing Do not replace the obsolete linac and no other actions No funding implications No additional work required maintaining a 4th machine Disadvantages Reduction in capacity leading to increased waiting times and breaches No contingency for breakdowns and servicing leading to regular periods when only 2 linacs might be available Option 2 Do nothing and extend the working day on the three remaining linacs Description Do not replace the obsolete linac and extend the working day on the remaining linacs to make up the available hours lost – could 5 include weekends Advantages No capital purchase required Increased in treatment option times for patients Disadvantages Possible increase in revenue funding to ensure all linacs are staffed for longer periods with full support staff, physics and clinical back up. Formal staff negotiation required as may describe changes to contract Increased likelihood of breakdowns as linacs are utilised more fully No contingency for breakdowns and servicing leading to regular periods when only 2 linacs might be available Option 3 Outsource activity Description Do not replace the obsolete linac but outsource activity to local oncology centres out of area. Advantages No capital purchase required Disadvantages Increased travel for patients Unclear as to whether capacity exists in other organisations Revenue implications of new contract with selected provider Fragmentation of cancer pathway leading to potential for errors and delays Governance concerns regarding oncology decision making Complexity regarding patient selection i.e. outsource by type of cancer or by address. Former is clinically easiest but has greatest problems in terms of travel, latter clinically very complex Significant patient related issues in terms of information, Welsh language etc. Reversal of strategic direction leading to reputational damage Option 4 Outsource activity and extend the working day on the remaining three linacs Description As above Advantages No capital purchase required Disadvantages Increase in revenue funding to ensure all linacs are staffed for longer periods with full support staff, physics and clinical back up and payment for outsourced activity. Formal staff negotiation required as describes possible changes to contract Increased likelihood of breakdowns as linacs are utilised more fully No contingency for breakdowns and servicing leading to regular periods when only 2 linacs might be available Increased travel for patients Fragmentation of cancer pathway leading to potential for errors and delays Governance concerns regarding oncology decision making Complexity regarding patient selection i.e. outsource by type of cancer or by address. Former is clinically easiest but has greatest problems in terms of travel, latter clinically very complex Significant patient related issues in terms of information, Welsh language etc. Reversal of strategic direction leading to reputational damage Option 5 Replace the obsolete linac 6 Description Replace the obsolete linac and formally expand the department to a 4 linac centre. Advantages Will expand capacity to better meet cancer and radiotherapy waiting times. New linac will also increase flexibility through being able to move patients between all available machines as they will compatible. Essential business continuity around 3 linacs will be maintained as a 4th linac will provide greater flexibility for maintenance and breakdowns. Breakdowns are likely to decrease as a replacement linac will improve reliability and be under initial warranty. Up-scaling of capacity through extended days will be easier through provision of 4 compatible linacs. Disadvantages Capital costs will need to be secured Revenue costs will need to be secured over and above the current revenue spent on the current 4th obsolete linac Failure to find the additional revenue will mean an expensive new linac is not fully utilised although the innate flexibility in having a new 4th linac would remain advantageous. The preferred option at this time is Option 5 4.2) Long term/strategic options As mentioned earlier the “Radiotherapy Equipment Needs and Workforce implications 2006-2016, Welsh Scientific Committee” recommends that NWCTC will require a minimum of 6 linacs by 2020. There are a number of significant details that need to be understood as a result of this statement; • there are currently only 5 bunkers at NWCTC and as a result a 6 linac service would also require a build of a 6th bunker on the NWCTC site. This would be a significant capital project. • An additional build of this nature may coincide with other capital schemes that may arise e.g. PET-CT, brachytherapy. Not only would these issues have implications for the capital available but also they are likely to compete for the same physical space on the Glan Clwyd site • Taking into account the useful life left on the current linacs, to have 6 functional linacs by 2020 would suggest the purchase of 5 new linacs including the one being considered within this document. It is evident that a 6 linac service at NWCTC by 2020 would have significant financial implications with the capital requirements alone potentially being between £9 and £15m. 4.2.1) Clatterbridge Cancer Centre (CCC) 2020 also represents the year that CCC has declared its intention to relocate the Merseyside regional oncology service to the Royal Liverpool Hospital site. The driver 7 for this has in the main been the fact that the vast majority of the 1.8 -2m population it serves live north of the Mersey some considerable distance from the current Wirral site. CCC have three significant challenges as part of this strategic move; 1)They will need to serve the population of Wirral (320,000) with oncology care and as such will need to consider retention of some of their current services on the Wirral site beyond 2020. 2) The current CCC site on Wirral is based on providing capacity for all of Merseyside so the organisation will own a site with significant redundant capacity in 2020. This redundancy however will only become evident once capacity has been secured in Liverpool itself so CCC will more than likely have to right off viable capacity on Wirral in 2020. 3) Decommissioning of the excess capacity and facilities will have an associated cost and risk. This development may provide opportunities for North Wales in that the redundant capacity at CCC available in 2020 could be taken up by North Wales in line with the capacity already identified in “Radiotherapy Equipment Needs and Workforce implications 2006-2016”. This approach has resonance for North Wales as certainly patients in the east of North Wales face travel times to NWCTC equal to those experienced if travelling to CCC at Wirral. It is perceived that utilisation of redundant capacity at CCC on Wirral has a range of advantages for both North Wales and CCC and as such preliminary discussions are taking place between the two organisations. It must be noted that none of the above can progress before 2020 and as such this strategic approach does not impinge upon this business case. 5) Capital Implications of the preferred option It is estimated that the capital purchase of a replacement linac is £1.7m. This figure is referred to as a ‘turnkey’ option in that it includes all the work necessary to deliver and utilise the new machine. 5.1) Sourcing the capital In light of the current availability of capital in Wales the Cancer CPG approached charitable sources and funds for the required capital. This approach has the added advantage of being VAT/Capital charges exempt. Table 4. Charitable capital donations – August 2015. Fund Ron and Margaret Smith Cancer charity Legacy Notes Written donation agreed by the committee on basis of use for a linear accelerator Agreed with legal representative for allocation to support a linear accelerator. Due to be released Sept 2015. 8 Sum £950k £500k Awyr Las Considered by the Charity Committee –June 2015 Total £250k £1.7m 6) Revenue Implications of the preferred option In order to fully utilise a 4th linac there are revenue implications regarding staffing and maintenance. A fully functioning linac will require approximately 6 additional therapy radiographers of mixed seniority. It is estimated that this will cost an estimated £250k per annum. A maintenance contract will also be required although initially this will be provided under warranty. 6.1) Sourcing the revenue The revenue for the staffing has already been highlighted and addressed by the CPG. Additional staff have been recruited to cover a range of maternity leaves and when staff return from maternity leave the new recruits will be retained expanding the establishment to cater for a 4th linac. As part of this approach the wider staffing within the department will be reviewed to ensure the required skill mix. Funding for the approach above was approved as an additional pressure supported by the savings made through repatriation of oncology activity from CCC (see earlier 3.4). A maintenance contract will be required but this will initially be off set by the fact that the linac is under warranty. A further off set will be the increased maintenance costs required by the current obsolete 4th machine. Whilst Physics staff may require investment it is noted that they already have a commitment to the current 4th linac, a commitment that maybe greater than expected due to breakdowns and obsolescence. 7) Risks There are a number of risks associated with this case and these are considered in Table below Table 5. Linac purchase risk assessment Risk Assessment Rating Failure to replace the linac Failure to replace the obsolete linac red will inevitably reduce the service to 3 linacs and increasingly 2 linacs as servicing/breakdowns increase. This will decrease capacity that is already proven to be inadequate 9 Local purchase in light of strategic option that might use other providers Waste of charitable funds due to lack of revenue Recruitment of staff that might not be used if no purchase made Purchase now does not contradict a Green strategic option around outsourcing or utilisation of neighbouring facilities. Regarding the latter they will not be available until 2020 when in fact 2 more linacs reach obsolescence in North Wales Funds have been earmarked for this Green purpose by the fundholders. In 5 years time two more linacs will require replacement and this machine will fulfil its full potential then even if it is not fully utilised now. Currently staff have been recruited Green to cover maternity leave. It remains unknown what hours the staff will want to return on and it is likely that they will seek to negotiate a reduction in hours. Turnover will provide internal vacancies. Developments in the North West in the next 2 years will see a significant recruitment of therapy radiographers and as such internal turnover is likely 8) Conclusion and preferred option The preferred option is that a new linac is purchased to replace the current obsolete machine. This would maintain an establishment of four linacs but assumes that the fourth linac is used as a fully functioning asset. Replacement would also expand capacity through provision of greater flexibility between linacs and less breakdown/maintenance time. Much has already been done to make this option viable with considerable charitable funding being secured. Approval of this case would secure the final element of charitable funding ensuring purchase of the linac VAT exempt. The revenue impact of the linac in terms of staffing in particular has already been addressed through the need to cover a significant number of maternity leaves – the recruits through employment on permanent contracts in essence become the workforce for the fourth machine when the maternity leaves return. Strategically the radiotherapy service will need to take radical steps either in terms of significant local investment or forming a partnership with other providers but this only 10 really becomes into focus in 2020. This timeline, married to the out of service date of the other linacs in NWCTC, nullifies any risk around strategic fit. The significant risk is the ability to deliver radiotherapy now in line with UK targets. NWCTC fails to do this now and its only realistic option for improving its performance in the immediate future is to replace its obsolete linac and maximise the replacement. 11