Client
Morrison Healthcare / NHS Highland
Document Title
Supplementary OBC – Raigmore Day Services Centre
Version
EIGHT
Status
Final Draft For Board
Job Number
ED2677M
Author
Donald Milligan/ Kevin Gauld
Date
23rd October 2010.
Further copies from
Donald Milligan
Quality Assurance By
Jim Hackett
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NHS Highland: Raigmore Day Care Services
1.0
Executive Summary
05
2.0
2.1
2.1.1
2.2
2.3
2.3.1
2.3.2
2.3.2.1
2.3.2.2
2.3.2.3
2.3.2.4
2.3.2.5
The Strategic Case
Strategic Context
Introduction
Organisational Overview
Business Strategy & Aims - The Case for Change
Demographic Considerations
Epidemiological Considerations
Mortality
Life Expectancy
Long Term Conditions
Lifestyle Risk Factors
Summary Impact of Demographic and Epidemiological Data on Renal,
Surgical and Endoscopy Services
The Case for Change: Renal
Renal: Clinical Context and Overview
Renal: Capacity Considerations
Renal: Environmental Considerations: Raigmore
Renal: Overall Clinical Conditions
The Case for Change: Theatres
Operating Theatres: Clinical Context and Overview
Operating Theatre: Capacity Considerations
Operating Theatre: Environmental Considerations: Raigmore
Operating Theatre: Overall Clinical Considerations
The Case for Change: Endoscopy
Endoscopy: Clinical Context and Overview
Endoscopy: Capacity Considerations
Endoscopy: Environmental Considerations: Raigmore
Endoscopy: Overall Clinical Considerations
Other Organisational Strategies
Sustainability and Design
Procurement, Construction and Operation of the New Facility
Estates Strategy/ Raigmore Site Masterplan
The Provision of Facilities Capable of Sustaining Growth
Design Quality
Summary
Efficiency and Re-Design Framework
NHS Highland Workforce Strategy
Public and Staff Engagement Strategy
Quality and Patient Safety Framework
Investment Objectives
Existing Arrangements
13
13
13
15
17
18
19
19
20
20
21
2.7
2.8
2.9
2.10
2.10.1
2.11
Business Needs – Current & Future
Desired Scope & Service Requirements
Benefits Criteria
Strategic Risks
Implications of Not Meeting the Need
Constraints & Dependencies
21
21
21
22
26
28
28
28
30
32
33
33
33
35
36
37
38
38
38
40
40
41
41
41
42
42
42
43
46
46
46
46
46
48
50
51
3.0
3.1
3.2
3.3
3.4
3.5
The Economic Case
Critical Success Factors
Main Business Options
Preferred Way Forward
Short Listed Options
Combination of Options
52
52
55
57
57
63
2.3.3
2.3.3.1
2.3.3.2
2.3.3.3
2.3.3.4
2.3.4
2.3.4.1
2.3.4.2
2.3.4.3
2.3.4.4
2.3.5
2.3.5.1
2.3.5.2
2.3.5.3
2.3.5.4
2.4
2.4.1
2.4.1.1
2.4.1.2
2.4.1.3
2.4.1.4
2.4.1.5
2.4.2
2.4.3
2.4.4
2.4.5
2.5
2.6
2.6.1 Government Waiting Time Targets
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3.6
3.6.1
3.6.2
3.7
3.7.1
3.7.2
3.7.3
3.7.4
3.7.5
3.8
3.8.1
3.9
3.9.1
3.9.2
Benefits Appraisal
Benefits Weighting and Scoring
Benefits Appraisal Weighted Scores
Risk Assessment
Overview
Methodology
Risk Identification and Assessment
The Results of the Risk Workshop
The Cost of Risk
Sensitivity Analysis
Sensitivity Testing
Preferred Option
Development of Combinations
Selection of the Preferred Option
64
64
64
67
67
67
67
69
71
71
71
73
73
75
4.0
4.1
4.2
4.2.1
4.2.1.1
4.2.1.2
4.2.1.3
4.2.1.4
4.2.1.5
4.2.1.6
4.3
4.3.1
4.3.2
4.3.3
4.3.4
4.3.5
4.3.6
4.5
4.6
The Commercial Case
Agreed Scope & Services
Agreed Risk Allocation
Risk Assessment through the OBC Process
Board Risk Exercises
The Risk Management Process through the PSCP
The Risk Register
Risk Owner
Risk Action Plans
Risk Quantification
Key Contractual Arrangements
Open Book Philosophy
Construction Share Percentage and share range
Priced Activity Schedule
Defined Costs
Recording and Collation of Costs Info
Compensation Events and their Application
Implementation Timescales
Accountancy Treatment
80
80
80
80
80
82
82
82
82
83
83
83
84
84
84
85
85
85
86
5.0
5.1
5.2
5.3
5.4
5.5
5.6
The Financial Case
Potential Capital Requirement
Potential Net Effect on Prices
Economic Appraisal
Sensitivity Testing
Capital and Revenue Affordability
Potential Impact on Balance Sheet
87
87
90
93
95
95
98
6.0
6.1
6.2
6.3
6.4
6.5
6.6
6.7
The Management Case
Procurement Strategy
Project Management Arrangements
Change Management
Benefits Realisation
Risk Management
Contract Management
Post Project Evaluation
6.7.1
6.7.2
6.7.3
6.7.4
6.7.5
Purpose
Pre-requisites for Successful Evaluation
Stages of Evaluation
How we will Evaluate
Feedback and Dissemination of Findings for Evaluation
6.8
Contingency Plans
99
99
99
101
101
104
104
104
104
104
105
106
107
108
7.0
Conclusion
109
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APPENDICES
Appendix One
Activity Schedules
Appendix Two
Accommodation Schedule
Appendix Three
Workshop Attendees
Appendix Four
Benefits Scoring Results
Appendix Five
Risk Workshop Results
Appendix Six
PSCP Risk Register
Appendix Seven
Project Programme
Appendix Eight
Financial Papers
Appendix Nine
OBC Forms
Appendix Ten
Optimism Bias Calculations
Appendix Eleven
Letter of Support from NHSH Board
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1.0 Executive Summary
Background
The Day Services Project has been under consideration for a number of years and is planned
to be NHS Highland’s single largest capital investment in recent history. During this period,
as clinical models have evolved, the Project has developed from a Day Surgery Facility with
national OBC approval, to an expanded brief, which now includes Endoscopy and Renal
services. At its February 2010 meeting, the NHS Highland Board confirmed support to move
the business case forward but recognised that there were opportunities to review a wider
range of options that had the potential to:




Maximise the quality of the patient experience
Minimise any requirement for additional capital or revenue funding
Maximise the use of existing NHS Highland Estate
Minimise the requirement for any additional buildings
In addition, there was acknowledgement of the potential for significant service synergies and
cost improvements through the review of models of care, patient pathways and patient flows.
It was agreed that this would be progressed through a revised Day Services Project Board
chaired by The Chief Operating Officer, and including Ian Gibson, Board Vice-Chair in
addition to senior NHS Highland clinicians and staff, together with representatives of the
Board’s Principal Supply Chain Partner (PSCP) and Project Manager. It was agreed that this
work would focus on reviewing the current position to ensure that the Board could meet the
identified needs in the most effective way – both clinically and financially - recognising the
opportunities that have arisen since the inception of this project.
Decision by Project Board
The Project Board at its meeting on 25th August 2010 decided that the Preferred Solution, for
recommendation to the NHS Highland Board should be:
Day Surgery and Endoscopy Services
Option 4.1- a single storey Day Surgery and Endoscopy Unit on the Raigmore Site.
Renal Services
Option 5.4 - Refurbishment of existing Renal Dept and accommodation on the 7th Floor
of Raigmore (17stations with capacity for up to 25 stations in line with long term
activity projections) with 10 Station Satellite in Invergordon.
Quality Improvements and Better Deal for Patients
The key feature of the Preferred Solution set out above is the delivery of a range of quality
improvements to existing services which supports NHS Highland’s vision to provide quality
care at all times; to support people and communities to maximise their own health; to develop
precision driven services so that when people need care they experience timely, focused,
effective services that minimises the duration and frequency of contact; and to ensure that
every health pound spent delivers maximum health gain.
The main areas of added value to clinical services are:


Addresses the challenges in current services and facilities and in particular reduces
the risks associated with Theatre Utilisation Rates.
Addresses the issues highlighted in the recent Report by, the Joint Advisory Group
(JAG) on GI Endoscopy and the increasing demands placed upon Renal Services.
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




A clear shift in the balance of care with the creation of the Renal Satellite which
brings services nearer to patients and reduces travelling times for patients.
Creates opportunities for integration of Day Surgery & Endoscopy optimising patient
flows and pathways in a modern, high quality patient environment.
Separates scheduled and un-scheduled surgical activity promoting modern, efficient
clinical pathways.
Facilitates the development of a more integrated model of care.
Maximises the use of existing estate whilst minimising new build requirements.
Surgical Services
Existing theatre arrangements do not follow nationally supported optimum models of modern
care which recommend separation of clinical pathways between day case and inpatient
surgery. The present situation is a significant risk which is both potentially unsafe and
unsustainable due to an overall lack of theatre capacity. Current theatre utilisation rates are
95% to 100%. As a consequence of the above, NHS Highland is currently at the lower end of
the performance spread against the day surgery targets stipulated by The British Association
of Day Surgery (BADS) and is not capitalizing fully on the potential of optimal short-stay
surgery. This results in an inefficient use of inpatient beds due to the unpredictability of
unscheduled admissions and their impact on operating theatres. In order to support the
Board’s vision of providing quality care to every person every day, facilities are required
which will provide a planned care facility capable of accommodating all of those elective
cases identified and meeting all BADS targets and separating scheduled and un-scheduled
surgical activity.
Endoscopy Services
The Joint Advisory Group (JAG) GI Endoscopy Report, published in September 2010,
highlighted a number of deficiencies within existing facilities and issues relating to quality of
service. Clinicians and members of the Day Services Project team have also acknowledged
the shortcomings of the service for some time. The major areas of concern include:





Non-compliance with decontamination guidance and insufficient space
accommodate and achieve clean and dirty work-flows of equipment
The inability to separate pre and post endoscopy patient pathways and flows
Unisex changing facilities that breach patient privacy and dignity
Grossly inadequate storage
Insufficient nursing staff within the recovery area
to
Endoscopy capacity is insufficient to meet future demands, enable the move away from
outdated and higher risk interventions and to meet national cancer screening targets.
Renal Services
Significant physical expansion is required to meet existing and future patient activity. The
Raigmore renal unit, which has not been expanded since 1990, is physically unable to
accommodate any further dialysis stations and space standards fall well short of current
guidance. In addition, there is an overall lack of global renal dialysis capacity throughout the
Highlands and many patients are being disadvantaged by inadequate choice in treatment
location. The UK Renal Registry report (December 2008) covering the period 2002-07
showed that NHS Highland’s rate for Renal Replacement was 140 patients per million
population, while the rate for Scotland as a whole averaged around 120 per million
population. These demands on the service have resulted in a 9 fold increase in patients, from
8 to 70 and a 5 fold increase in staff from 11 to 57, to cope with these pressures.
Informing Engaging and Involving
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At its meeting in February 2010 the NHS Highland Board tasked the Project Board and
Project Team to identify a Preferred Solution. The starting point was the long list of options
agreed at that meeting. A range of Investment Objectives and detailed Project Objectives are
also in place. The service requirements were identified through the development of Clinical
Briefs. The range of options identified, were subjected to a series of appraisal processes
which included the identification of benefits against which the options would be measured. In
turn these benefits were assessed on the basis of economic, financial and non financial
criteria. A short list of options was consequently identified. In order to address the
requirements of Day Surgery, Endoscopy and Renal Services a short list of combination of
service specific options was developed. The levels of engagement throughout the process
have been consistently high and based upon a number of Workshops attended by key
stakeholders, discussions with the Patients Council, regular meetings with, and direction from
the Project Board and reports to the NHS Highland Board. In addition a meeting was held
with the Scottish Health Directorates Capital Investment Group to update progress and to
confirm compliance with current guidance and due process.
Key Objectives
The key Project Objectives have been identified as follows:









To provide additional Day Surgical, Endoscopy and Renal capacity that will allow
NHS Highland to meet current and future demands and enable the implementation of
modern clinical practice.
To improve business processes, patient flows and clinical pathways that optimise the
efficiency of clinical services.
To provide capacity to meet the Governments waiting time targets related to surgical
activity, specifically to meet the 84% BADS HEAT target.
To provide a modern working environment which is attractive to current and
prospective employee’s, improving recruitment & retention at Raigmore Hospital and
the location of the satellite dialysis facility.
To provide an integrated, fit for purpose, Renal Dialysis service in an environment
that is appropriate for patient’s needs.
To appropriately share facilities and services where this is clinically appropriate.
To develop facilities that are more sustainable and efficient than those that they
replace.
To utilise essential investment to deliver optimal improvement in overall performance.
To develop a modern Endoscopy unit with sufficient capacity that meets current
demands and has appropriate supporting services and a compliant decontamination
unit.
Summary of Shortlisted Options
The Day Services Project is based upon three distinct clinical services - Day Surgery,
Endoscopy and Renal Services. In order to address the requirements of each service
combinations of options were identified. The short list of Options is shown below
Options
Combination
Description
Option 1a
Entire New Build Day Services
Options 2.1, 3.3, 5.4
Options 2.2, 3.1, 5.4
Options 2.2, 3.2, 5.4
Day Surgery Refurbishment in Raigmore, New Build Endoscopy,
Refurb Renal and Satellite
New Build Day Surgery out with Raigmore, Endoscopy in Children’s
Ward, Refurb Renal and Satellite
New Build Day Surgery out with Raigmore, Endoscopy in Children’s
Ward, Refurb Renal and Satellite
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Options 2.2, 3.3, 5.4
Options 4.1, 5.4
New Build Day Surgery out with Raigmore, New Build Endoscopy,
Refurb Renal and Satellite
Single Storey Day Surgery and Endoscopy, Refurb Renal and
Satellite
Options 4.2, 5.4
Two Storey Day Surgery and Endoscopy, Refurb Renal and Satellite
Options 4.3 ,5.4
New Build Day Surgery and Endoscopy on Wd 11 site, Refurb Renal
and Satellite
Do Nothing
Continue with the existing range and level of services
Non- Financial Appraisal
The benefits generation workshop was held at the Raigmore Hospital on 12th April 2010. The
purpose of the workshop was to examine the key drivers and benefits that NHS Highland was
looking to achieve through the project, formulate the Benefits Criteria which options would be
scored against and weight these benefits relative to each other. It also explained that the
Benefits Criteria contained in the original OBC, though in need of further definition, must be
accounted for in this exercise in order to maintain an “audit trail” of commonality through the
Business Case stage of the project
The weightings to be applied to each of the Benefits are in increments of 5 – 20 as noted
below:



5 - of least (relative) importance, “good to have”
10 – important that some element is reflected in the project
15 – very important to the project
20 – Fundamental to the project
Full details of the Benefits and the weightings applied are shown in the Economic Case. In
order to take forward the Appraisal process a Workshop was held on 28 th May 2010 at which
each of the above options was scored against the Non Financial Benefits Criteria. The
relative weightings for each of the Non Financial Benefits Criteria were also finalised. The
results of the Non Financial Appraisal were as follows:
weighted
% to total
ranking
score
New Build Day Surgery and Endoscopy on Ward 11
755
82.1%
1
Refurb Renal in Raigmore with Satellite
746
81.1%
2
Renal to BTS with Satellite
744
80.8%
3
New Build
710
77.1%
4
Endoscopy in Ward 11
709
77.0%
5
Single Story New Build Day Surgery and Endoscopy
697
75.8%
6
New Build Endoscopy
690
75.0%
7
Two Storey New Build Day Surgery and Endoscopy
690
75.0%
8
Renal to Ward 11
688
74.8%
9
Day Surgery New Build Off Site
654
71.1%
10
Day Surgery Refurbishment
635
69.0%
11
Renal to BTS
635
69.0%
12
Endoscopy in Children's Ward
632
68.7%
13
Do Nothing
365
39.6%
14
Options 5.2 and 5.1 were excluded from the long list and the consequent financial appraisal
due to the constraints in obtaining BTS Building. The principal issues were that there was a
Option
4.3
5.4
5.2
1.a
3.1
4.1
3.3
4.2
5.3
2.2
2.1
5.1
3.2
X
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lack of clarity around when BTS would move and that NHS Highland did not own the entire
BTS building.
Option 5.3 Renal to Ward 11 was excluded from the financial appraisal because 4.3 New
Build Day Surgery and Endoscopy on Ward 11, was the top ranked option and consequently
made better use of Ward 11 than Option 5.3 in terms of non financial benefits.
Economic and Financial Appraisal
The Financial Appraisal remains a challenge and will be the subject of further discussions and
review.
Preferred Solution
As a result of the Non Financial, Economic Appraisal and Financial Appraisal outlined above
The Project Team decided that the Preferred Solution, for recommendation to the Project
Board should be:
Day Surgery and Endoscopy Services
Option 4.1 - A single storey Day Surgery and Endoscopy Unit on the Raigmore Site.
Renal Services
Option 5.4 - Refurbishment of existing Renal Dept and accommodation on the 7th Floor of
Raigmore (17 stations with capacity for up to 25 stations in line with long term activity
projections), with 10 station Satellite in Invergordon.
In arriving at the choice of a Preferred Solution the Project Team recognises that its choice is
not the lowest option in Capital cost terms. However it does represent both best value for
money and not only addresses the challenges in the existing services but also generates a
range of genuine improvements in the quality of the services offered to the patients of NHS
Highland. The key features and anticipated benefits of the Preferred Combination of Options
are summarised below:
Renal Satellite Unit
Renal Refurb on 7th Floor Raigmore
Single Storey Day Surgery
and Endoscopy Unit on the
Raigmore Site
Improves access to health
services through supporting a
Shift in the Balance of Care
Facilitates the development
of a more integrated model
of care
Optimises patient flow and
patient journey
Supports new models of care
Optimises patient flows and
the patient journey
Reduces the
“hand-offs”
Improves the patient pathway
& journey
Reduces the
“hand-offs”
Improves quality of care
Improves
communication
between all members of the
multi-disciplinary team
Creates opportunities for
integration of Day Surgery &
Endoscopy
staff/
patient
journeys
Has the potential to reduce
staff revenue costs through
appropriate shared service
planning
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number
of
number
of
Improves
environment
the
clinical
Improves privacy & dignity
Makes efficient
existing estate
use
Enables implementation
local & national strategy
Very close proximity to
patients requiring inpatient
(acute) dialysis
Reduces
duplication
of
space/areas between Day
Surgery & Endoscopy
Potential to reduce revenue
costs
Reduces
vertical
travel
distances for staff and
patients pre and postprocedure
Facilitates the development of
a more integrated model of
care
of
Improved patient dignity
of
Potential
to
productivity
improve
Potential to improve staff
motivation and therefore
staff retention
Creates
better
opportunities
training
Potential
to
increase
hospital-wide seminar and
meeting space
Closing the Affordability Gap
The Board has been working towards funding the capital requirements of the Project by
consolidating capital under spends for a number of years. As part of the Full Business Case
all the elements of the capital costs will be subject to Benchmarking and competitive
tendering to ensure value for money. The Board’s Cost Advisor will scrutinise this process.
The imperative, in terms of affordability, is therefore to focus on the Revenue impact of the
Preferred Solution. Although the Project Team has sought to maximise the use of the existing
estate the Preferred Solution does contain an element of New Build facilities, without taking
any of the existing estate out of use. As a consequence the revenue impact of the Preferred
Solution is greater than the revenue costs of the existing services. The current net additional
revenue impact is £589,000. In arriving at this position the following cost saving measures
have been identified:




Removal of the costs of the Modular Theatre (which will be required should this
scheme not go ahead)
Savings in Capital Charges
Review of bed numbers resulting in a reduction of 10 beds
Savings in payments to staff
Work will continue to identify additional measures to reduce the current net additional revenue
impact of £589,000.
Key Project Risks and Management of Risk
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The methodology used to assess risk is outlined below. The process of risk management is
fourfold:




Risk Identification – develop a Risk Register covering key risk areas and individual
risks within these areas.
Risk Assessment – each of the options must be assessed against the risk register,
assessing the impact, probability and exposure using a simple scale of 1(low) to 5
(high). The overall exposure to risk is then a product of the impact of risks and
likelihood of them occurring.
Risk Quantification – putting a value to each of the risks using estimates of
probability, impact and timing. Generally for the preferred option only.
Developing a Risk Management Plan – a plan to manage all the risks identified in
the risk register for the preferred option, including responsible persons and monitoring
mechanism.
As a result of implementing the above process and through consolidated at a Risk Workshop
held on 15th September 2010. The following key risks have been identified:
Transition
NHS Highland recognises that the reconfiguration of Day Surgery, Renal and Endoscopy
services into a new facility represents a major challenge in terms of ensuring that service
continuity is maintained. To move services from the various locations in the Raigmore into
the new facilities will be a major logistical exercise in migration terms.
New Service model
Inherent in the project outcomes for the Project is the opportunity to realign the service
delivery model to promote best practice and new methodologies aimed at service
improvement. However, in order to implement these changes to service delivery, the project
team are very aware that there can be short-term risks during the transition to the new
working practices, especially when coupled to the move into the new facility. The risk to be
avoided here is very much the transfer of old practices into the new facility.
Implications of not meeting the need:
If the needs articulated in this Business Case are not met through the provision of the new
facility, the following implications will become apparent: 
NHS Highland will be unable to provide additional Day Surgical, Endoscopy and
Renal capacity that will allow NHS Highland to meet current and future demands and
enable the implementation of modern clinical practice;

The opportunity to improve business processes, patient flows and clinical pathways
that optimise the efficiency of clinical services will not be met;

The capacity required to meet the Governments waiting time targets related to
surgical activity, specifically to meet the 84% BADS HEAT target will not be achieved;

The working environment for day surgery, endoscopy and renal staff will continue to
be substandard and fall short of modern day standards and could adversely impact
on the recruitment & retention of specialist staff;

Renal patient numbers in NHS Highland are forecast to rise to 332 by 2015.
Raigmore renal unit is operating very close to capacity and is not physically able to
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increase the number of haemodialysis stations to cope with projected growth having
already compromised virtually all available office/ storage/ auxiliary space. While the
limiting of renal treatment is not ethically advisable, treatment will effectively be
rationed if the hospital haemodialysis service is not expanded. The associated risks if
the recommendations made are not implemented are of a catastrophic failure of
Renal Services in NHS Highland.

The opportunity to provide an integrated, fit for purpose, integrated Renal service in
an environment that is appropriate for patient’s needs will not be realised;

Decontamination facilities will not meet the requirements of the recent JAG report and
a separate project will require to be developed to comply with the new
decontamination standards;

Services could become unsustainable (Local and NHS Highland-wide), more costly
and breach patient safety standards; and

Lack of investment could result in further deterioration to building performance and
ability to meet environmental standards.

Continued reliance on weekend operating sessions will put pressure on operating
budgets.

Continued insufficient theatre capacity will create challenges in terms of maintenance
and upgrade.

Out of date Day Surgery facilities may deter surgical and anaesthetic staff from
seeking employment at Raigmore Hospital. Retention of staff may also be an issue.
Project Governance and Control
Project Management structures are in place in line with latest guidance in the Scottish Capital
Investment Manual and current NHS Highland practice. The Project Board is chaired by the
Chief Operating Officer of NHS Highland and includes NHS Highland Vice Chairman, Director
of Finance and a Partnership Representative.
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2.0 The Strategic Case
2.1 Strategic Context
2.1.1 Introduction
NHS Highland has delivered significant achievements in recent years – treating more
patients, and providing better, faster access to diagnostic and treatment services - as well as
achieving financial balance. The Board continues to seek improvement in the quality of
patient care however and, in line with other NHS Boards, has a published Local Health Plan.
This plan sets out a simple vision for the people of the Highlands:
“Quality care to every person every day”
NHS Highland, in common with all Scottish health boards, has a huge advantage in being
responsible for the total health needs of the population and, for integrated care. This means
we are responsible for better health of our communities through population wide and
individually focused initiatives to maximise health and prevent illness; for better care of our
patients through quick access to modern services, in clean and infection free facilities, by well
trained and courteous staff; and for better value for the use of the public money we spend by
ensuring there is no waste and inefficiency, money is spent only on what is needed and has
evident therapeutic benefits and variation from core care pathways is the exception.
We recognise the importance of keeping a balance between the three components of better
health, better care and better value because they are intrinsically linked and together
constitute an effective health system. Any one area cannot be prioritised over any other.
The roadmap for realisation of this vision is set out in the NHS Highland Local Delivery Plan
(LDP) that outlines the strategic direction for the Board, provides evidence of performance to
date and identifies its plans to address key national targets within the context of its strategic
framework. Currently, there are 6 key objectives that form the strategic framework for NHS
Highland.
a) To continue to improve the health of people in the Highlands and to reduce the
inequalities in health between different sections of our community.
b) To reduce the time people wait to receive services.
c) To reduce, to an absolute minimum, the chance of acquiring an infection whilst
receiving health care and to ensure our hospitals, clinics and surgeries are clean.
d) To ensure services delivered are high quality and clinically effective through robust
outcomes evaluation.
e) To treat people with chronic conditions sooner, near to home and earlier in the course
of their disease.
f) To deliver our programme of service modernisation.
In addition, NHS Highland is moving quickly towards delivering services with zero wastage
and inefficiency across all services and no unnecessary overheads. It is also committed to
using modern, flexible, efficient, green assets to maximum effect.
On a service-by-service basis a range of outcomes that will be delivered through
implementation of the preferred option presented in this business case will contribute to the
achievement of all of these strategic objectives. Most notably:
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For Day Surgery and Endoscopy, through the provision of access to a modern planned
elective surgery/endoscopy facility:





Improved health for the people of the Highlands through timeous access to a modern
elective care surgical/endoscopy facility that has been planned and will operate in the
context of a region-wide surgical and endoscopy care delivery model.
Reduced waiting times for surgical/endoscopic review and intervention through: the
creation of robustly challenged and justified additional operating theatre and
endoscopy capacity; the physical and operational separation of planned and unscheduled surgical care; the optimal planning and utilisation of elective surgical and
endoscopy activity; the further development of effective pre-admission assessment
services; an increasing move towards more day case & out-patient based surgery.
Reduced infection rates through; adherence to improved technical & space
standards; improved building fabric & servicing; improved performance against
National Cleaning Standards; enhanced patient journey/flow optimisation; reduced
length of stay; enhanced endoscope cleaning/sterilisation/storage facilities; effective
pre-admission assessment and screening.
High quality services that are based on evidence based care and robustly evaluated
through; extensive review and challenge of all care models; detailed capacity review
and planning; optimal accrued benefits realisation monitoring; careful adherence to all
current clinical and technical standards and robust challenge to all elements of this
business case throughout its production.
Realisation of significant components of NHS Highland’s service modernisation
programme through; supporting/facilitating whole system re-design of all of the
services involved; planning for these services in the context of region-wide care
models; reducing lengths of stay within the acute hospital environment; integrating
services when it is clinically appropriate to do so; supporting the realisation of a wide
range of performance and service-related targets; contributing to the development of
generic models of care.
For Renal Services through the provision of access to a modern acute in-patient renal
facility, renal out-patient area and additional satellite dialysis facility:





Improved health for the people of the Highlands through the delivery of timeous
access to modern renal in-patient, dialysis and out-patient services that will further
enhance the existing region-wide renal services delivery model.
Reduced waiting times for people requiring renal intervention both at the outset of
their episode of renal care and throughout any chronic condition support they receive
through; the creation of robustly challenged and justified additional renal dialysis and
support service capacity; the physical and operational integration of in-patient renal
care that is currently delivered in physically separate areas of the Raigmore site into
one centre; the operational separation of in-patient and out-patient renal care; the
provision of an additional satellite renal unit within refurbished accommodation that is
appropriately located to support service demand closer to peoples home where this is
required.
Reduced infection rates through; adhering to improved technical & space standards;
improved building fabric & servicing; improved performance against National Cleaning
Standards; enhanced patient journey/flow optimisation; reduced attendance at major
acute hospital facilities; improved patient training regimes; reduced occupancy levels.
High quality services that are based on evidence based care and robustly evaluated
through; extensive review and challenge of all care models, detailed capacity review
and planning; optimal accrued benefits realisation monitoring; careful adherence to all
current clinical and technical standards and robust challenge to all elements of the
business case throughout its production.
The treatment of people with chronic renal disease sooner, nearer to their home and
earlier in the course of their disease through; developing essential dialysis capacity in
a satellite unit within refurbished accommodation out with Raigmore Hospital; locating
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
this satellite unit where it can optimally address existing patient/service profiles
around unmet need; reducing the distance travelled by patients with chronic renal
disease substantially; delivering enhanced renal out-patient capacity; consolidating
existing renal in-patient services into a single “region-wide centre of excellence” for inpatient renal care on the Raigmore site; freeing up clinician time to support increased
patient interaction through reduced travel time.
Realisation of significant components of NHS Highland’s service modernisation
programme through; supporting whole system re-design of all of the services
involved; planning for these services in the context of region-wide care models;
reducing length of stay within the acute hospital environment; bringing services
together when it is clinically appropriate to do so; supporting the realisation of a wide
range of performance and service-related targets; contributing to the development of
generic models of care.
In addition to these service specific objectives implementation of the preferred option
presented within this business case will:






Improve the recruitment and retention of surgical, anaesthetic, endoscopy and renal
staff across NHS Highland through providing facilities that people will choose to work
in.
Optimise the value of the capital investment proposed through rigorous review and
challenge of all available options and proposals.
Realise the optimal utilisation of revenue related to all of the services involved
through recognising revenue efficiency as a major driver and factor in all appraisal
activity.
Ensure that optimal use is made of current estate throughout the NHS Highland
Board area by exploring all existing operational and physical options available to
support service requirements in the first instance.
Utilise essential investment to address a range of issues that extend beyond the
physical and operational confines of the services involved, e.g. to commence a
structured programme of refurbishment of the main tower block at Raigmore Hospital.
Facilitate the final stages of a strategic review and re-alignment of those services
affected throughout the NHS Highland Board area, thereby realising a complete
redesign of services that extends far beyond the confines of the planned fixed assets.
2.2 Organisational Overview
NHS Highland is one of fourteen territorial Boards in Scotland, and is managed by a Board of
Directors who are accountable to the Scottish Government through the Cabinet Secretary for
Health and Wellbeing. The Board is accountable for the performance of NHS Highland
services. It serves a population of over 310,000 residents (within the Highland and Argyll &
Bute Council boundaries) and sees a proportion of its patients from the influx of tourists to the
Highlands, which at certain times of the year can double or even triple the local population. In
2010 NHS Highland has a Revenue Resource Limit of £560 million and employs around
10,000 staff.
Executive responsibility is through the Corporate Team which is led by the Chief Executive,
Dr Roger Gibbins.
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The organisation delivers services to patients and local communities through five main
operational units - four geographical Community Health Partnerships (CHPs) and one acute
unit, Raigmore Hospital. These operational units are supported by a range of Corporate
Services including facilities, pharmacy, personnel, and finance.
There are four CHPs in NHS Highland:




North Highland CHP (Caithness & Sutherland)
Mid Highland CHP (Ross & Cromarty, Skye & Lochalsh, and Lochaber)
South East Highland CHP (Inverness, Nairn, Badenoch & Strathspey)
Argyll & Bute CHP.
The Argyll and Bute CHP has the same boundaries as Argyll and Bute Council. The three
other CHPs together make up the area of The Highland Council.
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Community Health Partnerships are directly responsible for providing a wide range of local
and community based services including local hospitals, community mental health teams,
community nurses, midwives and health visitors, therapy teams such as physiotherapy,
speech and language therapy, occupational therapy, nutrition and dietetics,
podiatry/chiropody, and a range of specialist practitioners such as Macmillan nurses.
Relatively few General Practitioners are directly managed by the CHPs, but they have an
important contribution to their work and are very much part of the local CHP teams.
People living in Argyll & Bute receive many of their acute and more specialist services from
neighbouring NHS Greater Glasgow & Clyde. The Argyll & Bute CHP purchases these
services from NHS Greater Glasgow & Clyde through formal contracts.
Each of the CHPs is further divided into localities, each of which has a Locality General
Manager, and a local management team.
The NHS Highland catchment area comprises the largest and most sparsely populated part of
the UK with all the attendant issues of difficult terrain, rugged coastline, populated islands and
a limited internal transport and communications infrastructure. The area covers 32,518km²
(12,507 square miles), which represents approximately 41% of the Scottish land surface. The
geographical nature of the region presents particular challenges for the efficient and effective
delivery of health care services.
The proportion of older people is above the Scottish average. However, levels of morbidity
and deprivation are well below the Scottish average.
In total NHS Highland will annually see and treat approximately 38,000 inpatients, 13,000 day
case patients, 7,000 renal day attendances, 50,000 new outpatients and 39,000 accident and
emergency attendances. About two thirds of inpatients are admitted as emergencies.
In line with national guidance, NHS Highland updates its Local Health Plan every three years,
planning and monitoring progress against a wide range of national and local priorities and
targets. These priorities and targets are both extensive and challenging but largely support
the realisation of a wider policy framework that is driven by 3 key reports and the subsequent
documents that they have given rise to:
1. “Building a Health Service Fit for the Future” (2005). This document sets out the
challenges facing the NHS in Scotland, in particular our ageing population and the rising
incidence of long-term or chronic conditions. The report also recognises the particular
issues facing rural communities, including access to services and transport.
2. “Delivering for Health” (2005). A document which describes the need to focus more on
preventing ill health and reducing the impacts of long term conditions. This approach
aims to provide as much care as possible in people’s own communities, and to reduce
acute admissions to hospital, especially unplanned or emergency admissions.
3. “Better Health Better Care Action Plan” (2007). This document builds on the earlier work,
and sets out a series of actions to “help people to sustain and improve their health,
especially in disadvantaged communities, ensuring better, local and faster access to
health care”
2.3 Business Strategy & Aims - The Case for Change
In considering the business strategy and the case for change, a wide range of current and
anticipated future issues have been identified under a number of key “themes” that have
emerged during the service review process. The key themes, which are explored in more
detail on a service-by-service basis, have been developed into the data that has become “the
case for change” are:
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
The capacity case; why the volume of services and facilities need to change and/or
be re-aligned and/or delivered in a different way

The environmental case; why buildings, facilities and other fixed assets need to
change and/or be replaced in whole or part with different operational models

The clinical case; why services need to change and improve
In addition, a further key theme identified is “the financial case”; why the levels of investment
associated with all affected services and facilities need to change/alter. This has been
explored at length and is reported separately in the relevant section of this document.
2.3.1 Demographic Considerations
As noted previously, the population served by NHS Highland totals circa 310,000 people
based on the GRO(S) 2008 based population statistics. This is made up of residents of both
the Highland and Argyll & Bute Council boundaries.
It is anticipated that residents of the Argyll & Bute Council area will not be significant users of
any of the services covered by this business case due to the distances involved and the
Board’s objective of maintaining services as local as possible. Consequently, the projected
population figures in thousands produced by the General Registers Office for Scotland
(GRO(S)) shown below relate solely to the Highland Council area:
population (000's)
Highland Population Shift
70
60
50
40
30
20
10
0
0-15
16-29
30-49
50-64
actual
2008
forecast forecast forecast forecast forecast
2013
2018
2023
2028
2033
65-74
75+
year
Data Source: GRO(S) 2008-based population projections (Feb 2010)
age
2008
2013
2018
2023
2028
2033
group
actual
forecast
forecast
forecast
forecast
forecast
0-15
39.1
39.2
40.3
41.4
41.7
42.1
16-29
32.1
34.3
34.2
33.2
33.5
34.7
30-49
60.3
57.5
55.0
55.7
58.0
58.7
50-64
48.0
50.9
53.6
53.9
50.7
47.4
65-74
21.9
25.9
29.3
30.7
32.8
35.1
75+
18.0
20.7
24.4
29.9
35.2
40.0
Total
219.4
228.5
236.8
244.7
252.0
258.0
Data Source: GRO(S) 2008-based population projections (Feb 2010)
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Data Source: GRO(S) 2008-based population projections (Feb 2010)
The population of Highland region has increased by around 6% over the last 10 years and is
expected to continue to grow for the foreseeable future.
This increase, past and predicted, is due mainly to net in-migration to the region, rather than
natural increase (births - deaths). The predicted increase does not take account of any new
external influences on population, such as increased inward migration due to climate change.
GRO(S) data available projects over the next 25 years within Highland Region:

A population growth of circa 3,000 in the 0-15 age group (8%)

A population growth of circa 2,600 in the 16-29 age group (8%)

A population growth of circa 22,000 in the 75+ age group (122%)

A population growth of circa 13,000 in the 65-74 age group (60%)

A fall of circa 1,600 in the population age group 30-49 (-3%)

A fall of circa 600 in the population age group 50-64 (-1%)
It further highlights an overall population growth of circa 39,000 people across the Highland
Region area, primarily in older age groups.
2.3.2 Epidemiological Considerations
2.3.2.1 Mortality
Cancer and circulatory diseases still account for over 60% of all deaths in NHS Highland; this
figure is in line with the rest of the UK and other developed countries. Mortality from
cardiovascular disease, the largest component of circulatory diseases, is falling in those aged
under 75 years, but the socio-economic gap remains (see figure below).
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Cancer incidence and number of deaths from cancer continue to increase, reflecting the
ageing of the population. Cancer survival, however, is improving and the age-standardised
death rate is falling, indicating that more people are living for longer. The top four causes of
cancer mortality remain breast, lung, bowel and prostate.
Of other major causes of death, those related to alcohol have trebled in the last 30 years.
2.3.2.2 Life expectancy
In line with falling premature mortality rates, life expectancy continues to increase, as does
healthy life expectancy, but the gap between the two is not closing, indicating that the burden
of chronic ill health in later life continues and is shifting into older age groups. Healthy life
expectancy is improving more rapidly for men than women.
2.3.2.3 Long-term conditions
Definitions of long-term conditions (LTC’s) vary, making estimating numbers of people with
them difficult. According to local Practice Team Information, about 54% of the population
aged 16 years or over consulted their GP for a potential long-term condition in a 1-year
period; however, this figure includes many who are able to manage their condition
themselves. In the Scottish Health Survey, 37% of the population reported having a long-term
condition, and 11% said that their condition limited their day-to-day activities.
The prevalence of LTCs increases with age; in the Scottish Health Survey 65% of the over
65s reported an LTC, with 35% reporting two or more LTCs. Practice Team Information also
shows that people consulting their GPs about one LTC are more likely than not to have at
least one other LTC as well. For example, of those consulting their GP for CHD, only 8% have
no other LTC, while 67% have at least two other LTCs.
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This co-existence of multiple LTCs probably reflects the ageing population, and also suggests
that treating LTCs in isolation is no longer appropriate for the majority of the population
suffering from them.
2.3.2.4 Lifestyle risk factors
Smoking prevalence continues to fall; the latest estimates suggest that 26% of Scottish men
and 25% of Scottish women smoke regularly.
Alcohol consumption remains high at around 11.8 litres of pure alcohol per person per year
the equivalent of 570 pints of 4% beer or 42 bottles of vodka or 125 bottles of wine. This level
of consumption is enough for every adult in Scotland to exceed the sensible drinking
guidelines for men and women every week of the year.
Obesity levels continue to increase in adults: in 2008, 66% of men and 60% of women were
overweight or obese.
These changes in risk factor levels suggest that we will continue to see a reduction in
smoking-related diseases, but alcohol-related health harm, circulatory diseases, some
cancers and diabetes will continue to increase.
2.3.2.5 Summary Impact of Demographic and Epidemiological Data on Renal, Surgical
and Endoscopy Services
The demographic and epidemiological changes identified in the previous sections are likely to
have two effects on those services being developed in the context of this business case:
1) A direct increase in demand on services based on population growth alone; and
2) A secondary increase in demand for services based on an altered demographic
profile and epidemiological change.
The latter point here reflects a significantly increased growth in the 65+ age group (of circa.
88%). In the face of evidence-based clinical models for each of the services involved
(surgery, endoscopy and renal) this demonstrates significant links between increased age
and the frequency of intervention/volume of service required.
In the context of this outline business case this is reflected in the requirement for:

2 dedicated day surgery operating theatres;

4 endoscopy rooms; and

27 renal stations
 17 at Raigmore Hospital
 10 located in a satellite unit out with Raigmore Hospital
2.3.3 The Case for Change: Renal
2.3.3.1 Renal: Clinical Context and Overview
There are 3 main clinical manifestations of renal disease:



Acute renal failure
Chronic renal failure
End stage renal failure
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Acute Renal Failure (ARF) occurs when the kidneys suddenly stop working properly due to
factors such as infection, low blood pressure or toxins, a sudden injury to the kidney or loss of
blood. Treatment required for Acute Renal Failure will vary and options include dietary
modification, medication or dialysis. The majority of patients will make a full recovery;
although in a small number of cases they may have chronic damage, or require dialysis.
In Chronic Renal Failure (CRF) a person’s kidneys gradually stop working properly. This is a
lifelong condition which cannot be cured and requires more treatment as it progresses. It may
have a severe impact on patients’ lives. Eventually, many cases will progress to End Stage
Renal Failure.
End Stage Renal Failure (ESRF) is the final stage of renal failure when there is a total and
permanent loss of renal function. A person with End Stage Renal Failure will die within weeks
or months unless they receive renal replacement therapy (dialysis or kidney transplantation).
There are two main types of dialysis:


Haemodialysis
Peritoneal Dialysis
The vast majority of haemodialysis is provided in a hospital setting where a dialysis (kidney)
machine pumps the patient’s blood to the machine and returns cleansed blood to the body.
Each patient receiving haemodialysis is required to have treatment 3 times per week for
approximately 4 hours per session predominantly provided at a hospital or satellite unit.
Peritoneal Dialysis is carried out at home and involves removing waste products from the
body by flushing dialysis fluid in and out of the abdominal cavity. There are two types of
peritoneal dialysis; Continuous Ambulatory Peritoneal Dialysis (CAPD) where fluid is
exchanged at regular intervals throughout the day and; Automated Peritoneal Dialysis (APD),
where a machine controls the movement of fluid into and out of the peritoneal cavity,
generally as the patient sleeps.
Renal Replacement Therapy is the general term used for all of the different modes of
treatment for renal failure including the two types of dialysis discussed above and renal
transplant – which also has an on-going, albeit less onerous requirement for clinical care.
Unlike other areas of medicine, renal treatment for those experiencing end stage renal
disease is required to preserve life. Without regular dialysis, these patients will die within
days or months. As such, forward planning is essential to ensure that services are in place to
meet the urgent needs of this patient group.
It is also significant to note that, although the actual numbers of renal patients receiving
treatment at any given time appear low when compared to other services, the volume of
treatment/care required by individual patients means that even small changes in patient
numbers can have a significant impact in staffed capacity requirements.
2.3.3.2 Renal: Capacity Considerations
Existing renal care across the NHS Highland Board area is delivered from:

A 17 x station renal dialysis unit at Raigmore Hospital, Inverness operating 3 shifts
Monday, Wednesday and Friday and 2 shifts for the remainder of the week;

A 6 station “satellite” renal dialysis unit at the Belford Hospital, Fort William operating
2 shifts Monday, Wednesday and Friday; and

A 4 x station “satellite” renal dialysis unit at Caithness General Hospital, Wick
operating 2 shifts/ day.
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In addition:

NHS Highland clinical staff also support a further 6 station “satellite” renal dialysis unit
at the Western Isles Hospital, Stornoway that operates 2 shifts Monday, Wednesday
and Friday.
The available capacity within each of these units is limited by both physical and/or staffing
capacity.
In this context physical capacity can be thought of as the number of dialysis stations available
at any given time x the number of “dialysis slots” available per station, whilst staffing capacity
is the number of these “dialysis slots” that can actually be utilised because staffing resources
are available to support them.
It is important to note that, for clinical, social and technical reasons it is not deemed
appropriate to provide dialysis services 24 hours a day. Rather a 2-shift (morning and
afternoon) service is the preferred option with occasional evening dialysis (3 shift system) to
support severe fluctuations in capacity requirements and the small cohort of dialysis patients
for whom this is acceptable or preferable.
It is further important to note that a 3-shift system is more expensive/ treatment, frequently
doesn’t conclude until very late in the evening/ at night and is not suitable for a large
proportion of the dialysis cohort, making it less efficient.
Currently:




Raigmore is regularly operating in excess of its total available capacity on any given
shift (34 “slots” per shift or 2 patients/dialysis station/ shift) and very close to its total
physical capacity overall (102 dialysis “slots”/ day);
Raigmore is operating a “3 shift system” 3 days/ week to meet essential capacity
demands;
Fort William has the capacity to support a total of 12 patients requiring dialysis; Wick
has the capacity to support a total of 16 patients requiring dialysis; and
The Western Isles Hospital has the capacity to support a total of 16 patients requiring
dialysis and is currently supporting 11 patients.
As noted previously, whilst it is often possible (and appropriate) to view clinical capacity in
global terms, even if this means patients having to travel for treatment, this is not generally
appropriate for chronic renal dialysis patients due to the level of travel and disruption involved.
Consequently, it is important to ensure that all efforts are made to deliver services (dialysis
capacity) as close to patient’s homes as possible whilst recognising the significant challenges
(and variances) associated with capacity projection already identified. In this context, the
proposed satellite renal dialysis unit will not only assist in “shifting the balance of care” but
also provide overflow capacity for patients who require to attend Raigmore Hospital when
there is insufficient dialysis availability at Caithness General Hospital, Wick. In reviewing how
renal capacity requirements are likely to change in future, NHS Highland has utilised
nationally generated and validated data.
The most recent national data available for RRT (Renal Replacement Therapy) comes from
the UK Renal Registry report published December 2008, covering the period 2002-07.
During this period, NHS Highland’s take-on rate for RRT averaged 140 patients per million
population (pmp), (Lower confidence limits of this estimate 121, upper limit 162), while the
rate for Scotland as a whole averaged around 120 pmp.
Statistically, Highland’s take-on rate is therefore significantly greater than the average for the
UK as a whole. The data implies that this is due to fixed conditions such as geography, age
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of population, co-morbidity, social deprivation or genetic make-up of the population, rather
than to simple variability in data (i.e. chance). The report also notes “a steady growth in
transplant numbers” but also “haemodialysis numbers that continued to grow more rapidly”
and an overall growth in the prevalent UK RRT population of 11.8% in 2007 compared with
2006.
The report further notes that “Health Authorities with small populations have wide confidence
limits for SPR (Standardised Prevalence Rate) such that the interpretation of data from a
single year may be difficult.” This is demonstrated by the funnel plot below:
In simple terms this means that smaller areas/those with less patient numbers will find it more
difficult to predict activity growth and will also, because they have less capacity overall, be
more at risk of creating either too much or too little capacity
Highland’s prevalence rate of 910 pmp is consistent with the higher prevalence rate seen
throughout Scotland in comparison with the rest of the UK; a prevalence, which is exemplified
as the projections in figure 4.3 above, continues to grow. One of the reasons for this is the
steady year on year improvement in mortality in dialysis, which is likely to continue as
refinements in the way that patient’s are dialysed continues to develop.
As an example the 1-year survival for patients commencing dialysis in 1997 was 76.6%, by
2006 this had risen to 82.2%. Accompanying calculations have estimated that this
improvement might amount to a 0.5% improvement in survival rate of prevalent dialysis
patients per annum until 2015 after which it would level off.
The calculations also assume that 5 year average transplant rate will continue (8.6 per
annum) and that one transplant patient per annum will return to dialysis. This information is
presented at Appendix 1 (Renal Patient Number Projections). It is important to note that all
projections presented in this document reflect global capacity and DO NOT build in the
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flexibility necessary to ensure that capacity is provided geographically where it is clinically and
geographically most appropriate.
In summary, this data suggests that at the current incident rate of 140 pmp, NHS Highland will
need the overall capacity to dialyse 142 patients (range 112 – 177) patients by 2020 and 160
(range 125 - 202) by 2025.
The number of stations required to dialyse this number of patients are 28 by 2020 and 32 by
2025 (dialysing 5 patients/ station/ week) or 24 and 27 respectively (dialysing 6 patients/ shift/
week).
The option of dialysing 6 patients/ shift/ week requires an evening shift and therefore
becomes less suitable/ viable as the dialysis population ages and becomes more infirm. As
stated previously, there are significant challenges associated with identifying a sufficient
patient cohort who are suitable and able to accept twilight dialysis.
Even if NHS Highland’s renal take on rate falls to the Scottish rate of 120 and remains
constant there would still be a requirement for 22 stations by 2025 (at 5 shifts per week).
However, this is improbable because current rates are unlikely to relate to any modifiable or
changing factors.
On a much simpler model, if Raigmore dialysis numbers increase by 5 patients/ year from
their current levels, then there is a requirement for 28 stations by 2025.
Previous growth in renal patient numbers in Highland has been partially absorbed by
establishing satellite units in Wick and Fort William where patients can have easier access to
services. This is still seen as an effective way of expanding services and is in line with the
recommendations in a number of key reports such as ‘Building a Health Service Fit for the
Future’1 (2005).
Evidence from patient interviews and questionnaires highlight the advantages of these units,
with the quality of life for both patients and their families improving immeasurably, and the
number of miles travelled reduced dramatically (over half a million miles are saved annually
by the 18 current satellite patients).
A postcode analysis of current haemodialysis patients in Highland showed that 23% of this
group lived in the Invergordon area, and 28% of questionnaire respondents indicated that
they would be likely to use a satellite unit in Invergordon if this was an option.
It is important to note that however, that despite the development of satellite units, the
majority of renal patients in NHS Highland will continue to require treatment at Raigmore
Hospital at some time during their episode of care either because this will remain their nearest
renal unit, and/or because their clinical condition will require this level of care either in the
short or long term.
To this end Raigmore renal services require the capacity to support both local dialysis
delivery as well as that required to complement and underpin growing dispersed satellite
capacity and future unpredictability. The following graph identifies the expected demand and
therefore planning assumptions for dialysis capacity at Raigmore and an additional satellite
facility. A more detailed breakdown of the NHS Highland Dialysis requirements is attached at
Appendix 1.
Building a health service fit for the future (2005); Peer Review of Renal Services in Scotland
(2004); Renal Disease in Scotland – A strategy for future management (2004);
1
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This above graph clearly demonstrates that existing capacity will be inadequate from 20122013. It should be noted that the “dip” in satellite capacity demand that occurs in 2023/24 is
the projected impact of moving from a 3 to 4 patient/station operational model.
2.3.3.3 Renal: Environmental Considerations: Raigmore
Raigmore renal unit is physically unable to accommodate any further dialysis stations, having
experienced a 9-fold increase in patients (from 8 to 70 2) and 5-fold increase in staff (from 11
to 57) since 1990 without any physical expansion.
A significant investment in additional area is consequently required to deal with existing as
well as projected patient numbers and to solve significant space problems within the Service.
Coping with increased activity in the absence of the physical expansion of clinical areas has
created a difficult treatment and working environment within the unit and resulted in a chronic
lack of storage, training and office space.
This lack of physical space has also impacted on other areas of the hospital and has a
significant negative impact on the unit’s operational efficiency, e.g.

2
Reception/waiting areas are extremely small, resulting in frequent patient congestion
and lack of seating space during dialysis changeovers;
based on hospital haemodialysis patient numbers in November 2005
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
Lack of storage space for bulk fluids, etc means that Pharmacy deliveries need to be
smaller and more frequent resulting in increased pressure within Pharmacy stores
and the requirement for additional staff time;

A lack of training space has significantly impacted upon the services development of
some aspects of RRT. In particular, the lack of an area to train patients has
prevented the development of home haemodialysis, with only four patients being
treated on home therapy in Highland since 1998. Although home dialysis is suitable
only for a minority (around 5-10%) of haemodialysis patients, it is a less expensive
form of treatment than hospital haemodialysis, home dialysis costing £9,292 £17,260 annually per patient compared to £11,071 to £21,970 for hospital dialysis 3.
In addition, home dialysis is considerably less disruptive to the lives of patients and
their families and increasing the number of home haemodialysis patients would
support the recommendations in the “Better Health Better Care Action Plan” (2007) to
‘provide services as local as possible’.

A lack of associated clinic space has restricted the development of enhanced predialysis services aimed at improving clinical management during the pre-dialysis
phase whilst supporting the optimal clinical, social and psychological preparation for
patients.

A lack of administrative accommodation means that staff who are directly associated
with the day-to-day management/running of the unit do not have access to essential
accommodation in/around it. This leads to operational inefficiencies, increased
travel/down time and inefficient processes.
In addition, there is a complete lack of single room/isolation facilities that meets current
standards and an overall failure to meet current technical and space standards throughout the
facility which has been identified as a significant organisational risk.
Present clinical areas include:

4 x 1 bed areas (Without en-suites and considerably less than deemed appropriate/
safe by current planning guidance

3 x 2 bed areas

1 x 3 bed area

1 x 4 bed area
The limited administrative areas that are available to support the unit are delivered from an
adjacent temporary “portakabin-type” building which is extremely cramped and for which
planning permission is due to expire in 2011.
NHS Highland’s existing Estate data identifies the accommodation as being wholly unsuitable
for the services being delivered from it. In addition, the current service configuration
perpetuates a service model that forces renal services to be delivered from multiple separate
locations throughout the hospital in a manner that is both inefficient and inflexible.
2.3.3.4 Renal: Overall Clinical Considerations
Cost effectiveness of the various modalities of Renal Replacement Therapy, Dr S Vaughan,
NICE, 2004
3
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In summary, existing renal facilities at Raigmore Hospital are completely unsuitable and
incapable of supporting current and future service demand and development. In addition,
there is an overall lack of global renal dialysis capacity throughout the region. Specifically:









There is insufficient renal dialysis capacity throughout Highland region at present and
this situation is projected to get much worse
Whilst developing dialysis capacity out with Raigmore Hospital may help to partially
address this situation there is also a real requirement to increase the on-site capacity
at Raigmore for clinical and geographic reasons;
The dialysis unit at Raigmore is currently running at a considerably higher utilisation
than is deemed appropriate;
Existing renal areas do not meet current space/technical standards
Current facilities are having a negative impact on the perception of the quality of care
delivered
A lack of suitable space is restricting the development of new/enhanced models of
care
A lack of space is inhibiting the shift of renal care into communities, specifically
through restricting opportunities to provide the necessary training/preparation
required for modal shift
Existing facilities are having an adverse impact on the Board’s ability to recruit and
retain suitably qualified staff
Existing accommodation is leading to inefficient working practices and compromising
the ability to optimise resource utilisation
The risk associated with not addressing these issues is, in the short-term, the delivery of an
increasingly inefficient and non-viable service with growing clinical and operational concerns
and, in the medium to long-term, an inevitable failure in the sustainability of renal services
across NHS Highland.
2.3.4 The Case for Change: Theatres
2.3.4.1 Operating Theatres: Clinical Context and Overview
The Operating Department (Operating Theatres) provides specialist facilities that enable
surgeons to undertake surgical interventions (procedures or operations) on patients whose
medical condition requires the same. It also provides accommodation for minimally invasive
procedures conducted under radiological control by either radiologists or surgeons.
Although the level of intervention will vary by patient, in general, within the operating
department patients are received, reviewed, anaesthetised, operated upon and recovered.
The service provides for emergency and elective patients who require surgical intervention
and/or other procedures that require to be conducted within an operating room environment
and/or anaesthesia, with facilities that allow functional groups to care for pre, intra and postoperative/anaesthesia patients in a low risk environment.
Operating theatre services are delivered from a range of hospital locations across NHS North
Highland that include:

9 x General and 1 x maternity operating theatres at Raigmore Hospital, Inverness

1 x General operating theatre at the Belford Hospital, Fort William

2 x General operating theatres at Caithness General Hospital, Wick

1 x General operating theatre at The Lawson Memorial Hospital, Golspie
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
2 x General operating theatre at The Dr MacKinnon Memorial Hospital, Broadford,
Skye
Increasingly stringent training standards in combination with more complex working
environments and the difficulties associated with delivering “compliant” staff rotas in all
surgical specialties is making it more onerous to continue to deliver these complex services in
as wide a range of locations. NHS Highland has managed to sustain services through a
combination of investment in staffing resources and complex shift/rota planning that is
designed to optimise available resources.
Surgery can be delivered on an outpatient, day-patient and in-patient basis, with an
increasing move towards non-inpatient and shorter lengths of stay in hospital.
NHS Scotland, in reflection of the global advantages associated with increased day surgery
rates, has encouraged NHS Boards to actively look at their elective procedures and make
daycase surgery the default position whenever this is clinically appropriate. They identify
many benefits associated with this approach that include:

Lower risk of hospital acquired infection vis a vis inpatient treatment

Reduced time in hospital for the patient

Care that is better suited to the patients needs

Lower risk of surgery being cancelled (as long as day surgery facilities are separate
from those for emergency patients)
The British Association of Day Surgery (BADS) verifies these claims, noting that patients
overwhelmingly endorse day surgery, which generally provides timely treatment, reduced risk
of last minute cancellation, lower incidence of hospital-acquired infections and an earlier
return to normal activities. They further state that day surgery provides better value for money
overall.
In order to improve same day surgery rates, BADS produced a directory of approximately 160
procedures across 9 major surgical sub-specialties that could be managed on a day case
basis either in an operating theatre or other less onerous surgical environment. Within each
management option they also identified aspirational targets for the percentage of procedures
that could be conducted on a non inpatient basis.
In order to support a move towards day surgery, HEAT target E4.1 recognises these targets
whilst defining the on-going commitment of NHS Boards to increase the percentage of BADS
procedures carried out as day cases or outpatients.
Supporting documentation highlights that there were around 200,000 BADS procedures
carried out in Scotland overall in 2008 with around 135,000 of these carried out as day cases
or outpatients. The Scotland level target is for 84% of BADS procedures to be carried out as
day cases or outpatients for the year ending March 2011. If this is achieved (and if the total
number of procedures stays the same at 200,000) around 165,000 procedures will be carried
out as day cases or outpatients. Hence, an additional 30,000 procedures will be carried out as
day cases or outpatients (leading to savings in overnight costs).
The undernoted graph highlights performance against BADS target by Health Board area for
the years 2007 and 2008. It also identifies BADS targets for the year 2010.
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HEAT Target E4.1 Day Case Rates By Health Board
As can be seen, NHS Highland is currently at the lower end of the performance spread
against this target and is consequently not capitalising fully on the potential of optimal shortstay surgery.
Although day surgery is generally at the lower end of the surgical trauma scale it is important
to note that it is not without risk. The most effective risk mitigation strategy is through the
provision of robust pre-operative assessment prior to admission; this requires the right
accommodation and appropriately experienced staff.
2.3.4.2 Operating Theatre Capacity Considerations
The existing main operating department at Raigmore, where all surgical activity (with the
exception of maternity) takes place, includes 9 x operating theatres with associated
anaesthetic rooms, prep areas and recovery spaces.
This area caters for all surgical specialities, scheduled, unscheduled, in-patient and day case
procedures – resulting in a complex and frequently inappropriate mix of patients in shared
areas.
In order to achieve existing Waiting Time Targets it has become necessary to use theatres to
95% of their capacity although this increases to 100% 2 weeks out of every 5. This is far in
excess of the recommended utilisation rate (that allows for appropriate cleaning,
maintenance, staff training, patient turnaround time, preparation time between cases, etc)
which is 85%. The current situation has been identified as a major risk that is both dangerous
and unsustainable. The following challenges are directly related to available capacity:

Lack of segregation between elective, day surgery, trauma and emergency surgery;

Requirement to undertake elective surgery on CPOD (Confidential Enquiry into Perioperative Deaths) lists and out-of-hours – this can lead to difficulties in protecting
CPOD lists; and

Scheduling of elective operating sessions at weekends and out-of-hours to meet
waiting targets.
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As a short term expedient, a modular theatre is being rented and commissioned to give
additional theatre capacity. This will not address the fundamental requirements of day
surgery but will in the short term give some protection to day surgery lists and address, in
part, the challenges of current capacity highlighted above. On completion of the new build the
costs associated with rental will cease.
In order to review existing and future global operating theatre capacity requirements, an
extensive review of existing data was undertaken alongside a “horizon scanning” exercise
designed to ensure that future delivery issues were also considered.
The detailed outcomes of this process are presented as Appendix 2.
It is significant to note that this data, which has been reviewed by internal board staff and
external consultants, presents a prediction of planned elective surgical requirements that is
significantly lower (circa. 50% of that) originally anticipated and reported in the first version of
this Outline Business Case. This is primarily because:

Calculations have been subject to robust clinical challenge;

The latest, most current data has been used; and

Key planning assumptions have been changed to ensure optimum efficiency, e.g. the
length of the operating day, the average length of specific surgical procedures based
on historical data and the number of weeks available in the operating year.
As well as outlining the process undertaken to identify future day surgery capacity
requirements, Appendix 1 also tests capacity assumptions for robustness against a range of
scenarios/variables that include; the impact of changes in population data; varying
performance against British Association of Day Surgery (BADS) targets; and procedure times.
A high level summary of the Day Surgery data analysis is presented below.
The outcome of this analysis is the clear identification that there is a requirement for 2
operating theatres to be developed within the day surgery area.
These additional 2 operating theatres will:

Address existing global operating theatre capacity issues, e.g. elective out-of-hours
and weekend operating;

Provide sufficient capacity for the “extended basket of day cases identified” for at
least the next 10 years before any further review of service provision is likely to be
required;
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
Deliver a planned care facility capable of accommodating all of those elective cases
identified and meeting all BADS targets;

Separate scheduled and unscheduled surgical activity completely;

Free up sufficient space in existing theatres to accommodate all unscheduled and
inpatient operating activity whilst addressing existing issues arising from a lack of
capacity;

Create the possibility for modernisation and upgrade of the current Operating
Department in future; and

Enable the modular theatre capacity to be decommissioned along with associated
rental costs.
2.3.4.3 Operating Theatre Environmental Considerations: Raigmore
All day surgery is undertaken in the main operating theatre suite on lists that include Elective
and Emergency in-patient procedures. As major cases and emergencies are frequently
accommodated on the same operating session as day cases, lists that over run result in day
cases being cancelled. As with any cancellation action this has a double effect in so far as
both the surgical slot already booked and the slot that the patient must be re-appointed into
are both “lost”. In addition, these last minute cancellations cause additional unnecessary
stress and upset for patients, families, friends and staff.
Some day case patients currently use the general wards and are accommodated in a variety
of locations including side rooms, patient sitting rooms and inpatient beds which is completely
unacceptable.
Modern practice, as advocated by BADS, is to provide completely separate arrangements for
day case surgery allowing day cases to be dealt with in a predictable, timeous and effective
way, by staff dedicated to the concept of rapid throughput day surgery.
In the existing (mixed) environment day cases are frequently seen as being of a lesser priority
than other patients and are consequently subject to postponements or cancellations when
major surgery or emergency surgery has to be accommodated. Day case patients are also
cared for in an environment designed (and staffed) for complex surgical interventions resulting in operational in-efficiency- and unnecessary stress when mixed with patients who
are frequently very ill. In addition, if day case patients are delayed in theatre they are
frequently transferred back to inpatient wards rather than the Day Case Unit (due to
operational restrictions) resulting in a disrupted and unpredictable length of stay as well as
further operational inefficiency and inappropriate mixing of scheduled and un-scheduled care.
Notwithstanding issues associated with Day Surgery, Raigmore Hospital’s main operating
theatre department is in need of redesign and reconfiguration (improved area and upgraded
infrastructure). The space standards to which the department was designed to when it was
constructed over 25 years ago fall significantly short of area allowances in current Scottish
Health Planning Notes. For example the new Day Surgery Theatre area of 40m 2 is larger
than the existing rooms in use which are predominantly 37m 2 – the allowance for a standard
main theatre operating room is now 55m 2. Equally, storage space is inadequate with corridor
spaces being utilised inappropriately. Given that the life expectancy of the main building is
long, it would be prudent to plan for future improvement in facilities that do not meet modern
day standards. Whilst this business case is not addressing the latent issues associated with
the main operating department, the development of a separate Day Surgery/Endoscopy unit
will enable refurbishment and upgrade of the main department in future and create enough
capacity to minimise disruption during both major and minor capital works. At the same time
it will create enough capacity to allow theatre utilisation to reduce to acceptable limits.
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2.3.4.4 Operating Theatres: Overall Clinical Considerations
In summary, existing operating theatre facilities at Raigmore Hospital are completely
unsuitable for the on-going support of elective day case surgical activity and incapable of
supporting current and future service demand for capacity and development. Specifically:

There is Insufficient global capacity to meet existing and future requirements

Excessive evening and weekend operating theatre activity is currently taking place as
a result of the lack of elective day time capacity

There is an inappropriate mixing of scheduled and un-scheduled care patients, with
all of the associated consequential problems/inefficiencies, as a result of:
o
An inability to effectively separate scheduled and unscheduled care pathways
o
A lack of elective capacity resulting in scheduled patients being operated on
as part of unscheduled lists
o
The lack of a defined elective surgical facility/operating theatres

There is a similar inefficient use of bedded resources due to the unpredictability of
unscheduled admissions and their impact on operating theatres

There is a severe lack of storage space for essential surgical supplies and
consumables

Existing facilities/services do not meet current technical standards

It is impossible to undertake essential maintenance without a significant loss of
available operating capacity and immediate impact on all related targets/performance
The risk associated with not addressing these issues is, in the short-term, the delivery of
an increasingly in-efficient and expensive service with growing clinical and operational
concerns and, in the medium to long-term, a failure to achieve key waiting time and HEAT
targets.
2.3.5 The Case for Change: Endoscopy
2.3.5.1 Endoscopy: Clinical Context and Overview
Endoscopy is where direct visual examination of any part of the interior of the body is carried
out by means of optical viewing instruments that are designed and named according to their
specific function and the area of the body they are used to investigate. The technique can
also be used to undertake an increasing range of both diagnostic and interventional
procedures.
Endoscope is the general name used for all of these viewing instruments that are usually
flexible, steerable rubberised tubes containing multiple channels that various instruments can
be passed through. They normally also utilise lighting which is generated through a fibreoptic core that is attached to a physically separate light source and may also include
attachments.
Endoscopes may be introduced into the body through any orifice including the nose, mouth,
urethra or anus.
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Existing endoscopy services are delivered from a range of hospital locations and facilities
across NHS Highland that includes:

2 x Endoscopy rooms in Raigmore Hospital, Inverness

Main operating theatres, Raigmore Hospital

1 x Endoscopy room in Caithness General Hospital, Wick

Operating theatres in Caithness General Hospital

Operating theatre in the Belford Hospital, Fort William

Operating theatre in The Lawson Memorial Hospital, Golspie

Operating theatre in The Dr MacKinnon Memorial Hospital, Broadford, Skye
Existing services are delivered through an endoscopy network that is designed to support
local access to endoscopy services wherever possible but also that is reliant upon Raigmore
Hospital in both a geographical and regional context. (Delivering services to patients for
whom Raigmore is “local” but also to those who require the technical and clinical support
afforded by a major acute hospital with attendant personnel and services)
Although the level of intervention will vary by patient, in general, within the endoscopy
department – very much in line with the operating department - patients are received,
reviewed, anaesthetised, investigated/operated upon and recovered.
Also, in a similar manner to the operating department, the service provides for emergency
and elective patients who require investigation and/ or intervention within an endoscopy/
interventional environment and/ or anaesthesia, with facilities that allow functional groups to
care for pre, intra and post-operative/ anaesthesia patients in a low risk environment.
The main procedures carried out in the Raigmore Unit at present are:

Gastroscopy – looking into the oesophagus and stomach through an endoscope
introduced through the mouth

Endoscopic Retrograde Cholangiopancreatography (ERCP) – allows visualisation of
the main ducts draining the liver and pancreas and enables therapeutic procedures to
be performed through an endoscope introduced through the mouth

Endoscopic Ultrasound (EUS) – using ultrasound technology to provide images and
information about the digestive tract or chest cavity through the use of an ultrasound
transducer on the end of an endoscope that can either be introduced through the
mouth or anus

Bronchoscopy – enables a view of the major airways via an endoscope introduced
through the nose

Colonoscopy – looking into the large bowel through an endoscope introduced through
the anus

Entersocopy – enables a view of the proximal small bowel via an endoscope
introduced through the mouth

Flexible sigmoidoscopy – looking into the rectum and sigmoid colon (lower end of the
bowel) through an endoscope introduced through the anus
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
Cystoscopy – looking into the urethra and bladder through an endoscope introduced
through the urethra
2.3.5.2 Endoscopy Capacity Considerations
Endoscopy services, in common with all diagnostic services, find themselves in a capacity
challenged environment. The need to balance improved waiting times with an expanding
screening programme and increased demands for complex interventional procedures is
straining the endoscopy services within all secondary care providers.
Currently, endoscopy services on the Raigmore site are delivered from 2 x endoscopy rooms
(and minimal associated areas) and the operating theatre department.
The provision of Endoscopy services is based upon a direct correlation between age &
demand. Consequently, as the population demographics change, an increase in the number
of patients will be seen.
In order to calculate existing and future global endoscopy capacity requirements, an extensive
review of existing data was undertaken alongside a “horizon scanning” exercise designed to
ensure that future delivery issues are also considered.
A high level summary of the Endoscopy data analysis is presented below.
outcomes of this process are presented at Appendix 1.
The detailed
Summary Endoscopy Data Analysis
Factors that have been considered in support of future capacity planning for these services
include:








Historical and future growth/demographic trends
Current treatment times, space, occupancy levels and planning assumptions
Occupancy levels
Waiting time targets
Existing unmet need
The impact of staffing changes/redesign
The impact of bowel screening programmes
The impact of technology/new treatment regimes
From the outcome of this analysis it is the clear identification that there is a requirement for 4
endoscopy rooms at Raigmore Hospital.
These 4 endoscopy rooms with associated supporting accommodation will:

Address existing global endoscopy capacity requirements, e.g. national bowel
screening programme, waiting times targets.
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
Deliver a planned care facility capable of accommodating all of those elective
endoscopy cases identified and meeting all associated targets;

Address clinical and operational concerns raised around the design and flow within
facilities;

Support enhanced models of care, e.g. Improved pre-operative assessment, followup.

Move 90% of Barium Enema studies to colonoscopy thereby improving diagnostics
and patient safety; and

Recognise a requirement for Raigmore Hospital endoscopy facilities to grow in order
to fully support and underpin the region-wide model for endoscopy service delivery
being developed that it is the most complex component of.
2.3.5.3 Endoscopy Environmental Considerations: Raigmore
Endoscopy services in Raigmore are predominantly provided from the Day Case Unit.
As noted above, this unit is no longer able to cope with the demand for endoscopy that needs
to be provided on the Raigmore site. Specifically, the existing endoscopy unit at Raigmore is
located on the ground floor of the tower block and includes:

1 x Admission Room

1 x Patient Changing Area with 4 cubicles

1 x Consulting Room

2 x Endoscopy rooms

1 x Scope Cleaning/Storage Area

1 x 8 Bay Recovery Area

1 x Kitchen/Pantry
The facility is extremely cramped with inadequate storage and poor workflows.
Pre and post procedural patients as well as those in outdoor and theatre clothing are mixed
together, often passing each other or finding themselves in the same waiting area. The
patient journey requires review to bring about improvements in the service to safeguard
patient privacy and dignity4. There is no clear “journey” through the unit and due to the
existing cramped conditions male and female patients are often mixed in the same area whilst
awaiting endoscopic intervention in theatre attire – in complete contradiction to mixed sex
guidance. The existing changing facilities for patients breach patient privacy and dignity and
there is no gender separation4.
Post endoscopic recovery also occurs in a single mixed-sex recovery bay with shared toilet
and shower facilities. There is currently no access to any single room accommodation and
NO single sex areas out with the main endoscopy rooms. Mixing of pre and post endoscopy
patients should be discouraged; alternative arrangements should be found for a second stage
recovery area 4.
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In addition, the size and configuration of the unit, which was never “purpose designed” makes
it extremely difficult to maintain wider patient privacy/ dignity issues at all times, e.g. aside
from dress issues, endoscopy procedures frequently require bowel preparation and ready
access to toilet facilities before and after procedures. The practice of providing bowel
preparation in the recovery area is wholly unsuitable4. It is impossible to achieve this within
the current unit due to a relative lack of toilet facilities overall – a situation that leads to
frequent embarrassing and distressing situations for all.
As well as a lack of space to support effective clinical care it is also noted that the existing
endoscopy unit does not have access to any defined local staff changing space. As a
consequence, male and female staff changes in a storage area within the ward that does not
include toilets or showers – a situation that is completely unacceptable.
Although a dedicated scope cleaning area is provided, in line with the remainder of the clinical
accommodation, this does not meet current technical standards and/ or output specifications.
As the unit services only the endoscopy department it is also relatively inefficient with a higher
per unit operating cost than might be achieved in a larger unit covering a wider area/cleaning
more scopes. Sinks used to clean endoscopes are no longer recommended as they are not
sufficiently deep, do not have height adjustment and water level marks are not clearly visible.
The decontamination does not permit clear separation of clean and dirty equipment and there
is inadequate flow of equipment. To remedy this, NHS Highland would require to rebuild the
unit4.
The recently published Scottish Health Planning Guidance for Endoscopy
Decontamination Units (SHPN 13, Part 3, September 2010) sets out the requirements for
modern decontamination facilities.
Recent Joint Advisory Group (JAG)4 on GI Endoscopy assessments and Raigmore Hospital
Environmental Inspections (RHEI)5 highlight the inadequacies of the service in their reports.
2.3.5.4 Endoscopy: Overall Clinical Considerations
In summary, existing endoscopy facilities at Raigmore Hospital are completely unsuitable and
incapable of supporting current and future service demand and development. Specifically:

There is Insufficient global capacity to meet existing and future requirements/targets,
e.g. Bowel screening, endoscopy waiting time targets;

There is an Inappropriate mixing of pre and post-endoscopic patients as well as men
and women as a result of poorly designed flows4;

Endoscope cleaning does not meet current standards 4;

There is a severe lack of storage space for essential surgical supplies and
consumables5;

There is a lack of physical capacity to support effective pre-admission assessment;

There is no defined changing area for staff 4;

Existing facilities/services do not meet current technical standards;

It is impossible to undertake essential maintenance without a significant loss of
available operating capacity due to the absolute lack of endoscopy capacity;
The risk associated with not addressing these issues is, in the short-term, the delivery of
an increasingly in-efficient and expensive service with growing clinical and operational
4
5
JAG Endoscopy Assessment Report, Raigmore Hospital, 6 th May 2010
RHEI Report, 19th April, 2010
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concerns and, in the medium to long-term, a failure to achieve key waiting time and HEAT
targets.
2.4 Other Organisational Strategies
2.4.1 Sustainability and Design
The adoption of the preferred solution is designed to promote NHS Highland’s commitment to
meeting the needs of the present without compromising the ability of future generations to
meet their needs in all of its activities.
NHS Highland takes cognisance of the principles laid down both locally and nationally for the
promotion of sustainability in all activities undertaken by the Public Sector.
This project will promote sustainability across three fronts, these are:
2.4.1.1 Procurement, Construction and Operation of the New Facility.
The facility design has been developed to provide a comfortable and stimulating environment
for the occupants whilst minimising the impact of the building on the environment both during
construction and in operation. A number of measures, outlined below, have been considered
in order to improve the sustainability of the building; these aspects will continue to be
developed throughout the design process and will obviously take cognisance of final site
location.
Passive Energy Saving Measures
By careful consideration of the location, orientation, form and construction type of the building,
a comfortable internal environment will be maintained with minimal energy input.
Daylighting
Natural light can make an important contribution to sustainability by reducing the electrical
energy used for artificial lighting. It also contributes to the well-being of visitors and staff, and
the aesthetics and feel of the space.
Natural Ventilation
The use of natural ventilation will be maximised to provide a comfortable internal
environment. The layouts, where possible, allow for effective cross-ventilation of space by
means of opening windows.
Building Envelope
The building will include a high level of thermal insulation and careful detailing to minimise
unwanted heat loss.
Efficient Building Services Installations
The building services systems within the building will be designed and controlled so that they
operate at maximum efficiency and only operate when required, thus minimising energy
consumption. Some examples of ways in which the building services may be designed to
reduce energy consumption are as follows:
The artificial lighting will utilise low energy fluorescent or discharge lamps and luminaires with
high light output ratio.
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Automatic lighting controls, with manual override, will be used to ensure lights are switched
off when sufficient natural daylight is available or when rooms are unoccupied.
All air handling units will incorporate variable speed fans. Automatic controls will ensure the
fans only deliver the volumes or air required to suit the requirements of the space at any
particular time. This will reduce energy consumption for both fans and heating of fresh air.
Water Conservation
Water consumption will be reduced where permitted to reduce wastage.
Materials
Construction materials will be selected on grounds of their suitability for the job and their
sustainability.
Choosing sustainable construction materials involves consideration of
environmental impacts throughout their life cycle and the avoidance of non-renewable
materials where possible. The following have been considered during the selection process:





Impact of the material’s production on the environment.
Hazards to health or local environment during construction or use.
Life span of the material.
Nature of the resources involved, renewable or non-renewable, scarce or
abundant.
Emission of CO2 during production and consideration of embodied energy.
Eventual destination of the material after the building’s life; where possible materials and
construction methods should be employed that will allow building components to be reused at
the end of the building’s life, or recycled where reuse is not possible.
The methodologies set out in “The Green Guide to Specification” (bre: August 2007) will be
used to assess different materials and determine the most sustainable material for each
element of the buildings. Where possible A +/A rated materials or their nearest equivalent will
be used.
Landscaping & Ecology
The following items have been considered in respect of how the facility will interact with its
surroundings:





Biodiversity before and after the build
Use of native species
Use of a scheme that avoids artificial irrigation or fertilizers
Avoidance of disturbing the water table and watershed
Integrated pest management
Management/ Methodology
The following proposed procedures will help to develop a sustainable construction
methodology for the contractor:





Using lean construction methods with minimum waste.
Minimising energy use during construction.
Separation of construction waste (and avoidance of waste in the first place)
and the careful disposal of toxic waste to prevent pollution of the local
environment.
Preserving local biodiversity through careful and compact zoning of
construction activities.
Conserving water resources.
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


Developing good relationships with local people in order to safeguard
particularly important features of the local environment.
Careful monitoring of the construction process.
Responsible sourcing through identification of the supply chain and product
stewardship.
2.4.1.2 Estates Strategy/ Raigmore Site Masterplan
NHS Highland is currently in the process of updating its Estates Strategy and Site Masterplan
for Raigmore and is confident that the proposals contained within this business case will
support the objectives identified within these documents.
In particular, the Raigmore component of the preferred option is a major element of the
developing site masterplan that is being utilised to achieve positive outcomes that extend
beyond the primary objective of the capital investment into a more widespread range of
benefits in support of the site masterplan and estate strategy, e.g.







The proposed re-development of level 7 (top floor) of the “tower block” will
represent the commencement of a more widespread investment in this
important area of the estate that is now 25 years old.
The development of the day surgery facility as a separate project will support
a re-alignment of existing in-patient operating theatres in order to address
existing technical/operational limitations. (It will also provide the infrequent
capacity required to support essential maintenance)
The project is being used as a catalyst for the review/re-alignment of existing
energy strategies including the development of biomass capability.
The project will support a more widespread review of travel planning across
the site, including bus/cycle and pedestrian access routes.
The project will facilitate the removal of temporary buildings that have
provided a “stop gap” solution to some service needs, e.g. renal “portakabin”
which only has temporary planning permission.
The location of the facility will allow staff to utilise existing services as far as
possible rather than duplicating them in the new structure.
The briefing of new facilities will meet the higher standards of technical
specifications specified within the latest relevant technical guidance and/or
NHS Highland Estate Strategy.
2.4.1.3 The provision of facilities capable of sustaining growth
The overriding objective of this project is to provide modern, fit for purpose, NHS inpatient
facilities that are essential and integral elements of the inpatient provision in the Highland
area.
The ideas of ‘growth’ and ‘sustainability’ could be regarded as potentially opposing forces.
Consideration has been given to sustaining growth by providing a facility with a:





Long Life
Low Maintenance
Flexible Layout
Capability of Extension
Potential for re-use/ adaptation of the premises by other functions
Future proofing of the existing facility will be considered.
2.4.1.4 Design Quality
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NHS Highland recognises and fully supports the requirements presented in CEL 19 (2010)
related to a policy on design quality for NHS Scotland and, whilst this project was initiated and
had OBC approval prior to its inception, are keen to embrace its core principals.
Specifically:





The project has already been the subject of a number of AEDET design
assessments.
The Board’s Design Champion is continuously involved with all elements
related to design.
The facilities scheduled are being developed within the context of existing
agreed strategies and are based upon a robustly developed and challenged
brief.
BREEAM excellent has been deemed a mandatory requirement for all
elements of the new build.
Post project evaluation and post-occupancy evaluation has already been
planned as described elsewhere in this document.
2.4.1.5 Summary
After Producing a building that is designed and constructed with conservation and
sustainability in mind it is then essential that the ongoing management of the facility continues
these principals. Operational policies will be developed to ensure resources are utilised to
their maximum and waste is minimised. An Environmental Management System installed in
the building will help staff control light, ventilation, temperature and monitor energy usage and
allow targets to be set regarding reducing consumption.
This new Hospital will lead NHS Highland’s journey in reducing their carbon output by making
it the most environmentally aware building in their estate. It will also embrace the principals
identified in the NHS Scotland Design Policy, adding value to the overall NHS Highland
estate.
2.4.2
Efficiency & Re-design Framework
Over the last 3 years, NHS Highland has embraced the approach outlined within Better
Health, Better Care to improve health and health care services – both in terms of delivery and
access. This work has been delivered in parallel with:

The NHS Scotland Efficiency and Productivity Programme launched in 2009; and

The Scottish Patient Safety Programme launched in 2008.
Quality and Safety of services is not negotiable, the delivery of the Efficiency and Productivity
agenda must be seen within this context – recognising that financial balance must be
maintained alongside the ongoing delivery of the Quality Framework, and promotion of the
Patient Safety agenda.
This approach was reviewed, and subsequently confirmed by the Board Development in
March 2010. It is important that The Efficiency and Productivity Programme is an integral part
of this.
The Efficiency & Re-Design Framework therefore focuses on the application of Efficiency and
Productivity Processes throughout the area, rather than detailed consideration of the Strategic
Framework. The proposals are brought forward against a background of allocating savings in
the traditional manner, without the application of the Integrated Resource Framework (IRF).
This is not yet at a stage to be fully applied against the overall savings target, but it is planned
to apply this methodology in future periods to align efficiency targets with both current and
“fairs share” resource distribution.
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It is important to note however that the brief and developing plans for all new and redeveloped facilities have been based on the principals emerging through the efficiency and
design framework – recognising the significant positive impact that physical environment can
have on efficiency and productivity.
2.4.3 NHS Highland Workforce Strategy
The successful delivery of NHS Highland Strategic Framework 2010/11 requires the
contribution of the workforce to realise the vision ‘Quality Care to every patient every day’ and
delivery of the Triple Aim: Better Health, Better Care and Better Value.
Workforce design, development and delivery underpinned by workforce plans and policies
that support efficient, flexible working practices and are capable of responding to current NHS
challenges are important. They will help to improve health, reduce inequalities and deliver
HEAT and efficiency targets on time; in turn delivering safe, high quality health care services
to patients in a way that is both affordable and sustainable.
NHS Highland has already in place a number of key frameworks to support of the workforce
agenda:

The NHS Highland Workforce Strategy was developed in 2008 and its associated
action plan was updated in August 2009, taking account of ‘A Force for Improvement’

The Workforce Response to Better Health, Better Care’ (2009)
In addition, a range of National PIN Policies have been developed in partnership with
membership drawn from management, trade unions, professional associations and human
resource specialists.
2.4.4
Public and Staff Engagement Strategy
NHS organisations are under a legal duty to inform and involve service users and staff in the
design and delivery of health services. NHS Highland’s strategy is to facilitate engagement
and inform effectively. This reflects the growing evidence that where people are given good
information and involved in the right way it increases trust and confidence in the NHS.
2.4.5
Quality and Patient Safety Framework
NHS Highland’s vision is to provide ‘Quality Care To Every Person Every Day’. In delivering
this vision, three key elements must be delivered simultaneously:
2.5

Better Health – improving the health of the population

Better Care – enhancing the experience of care for individuals

Better Value – controlling the per capita cost of care
Investment Objectives
The Day Services project will provide modernised Day Surgery, Endoscopy and Renal
services to NHS Highland’s population.
Day Surgery and Endoscopy have similar
infrastructure requirements and have the ability to share common generic spaces. The
revised patient pathway and flows will enable these services to be delivered in a dedicated
new build facility which will deliver high throughput, clinically and cost effective services which
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will achieve the national 84% elective surgical patient target as defined by the British
Association of Day Surgery (BADS).
Similarly, the reconfigured Renal service will bring together inpatient and haemodialysis
accommodation on the 7th floor of Raigmore Hospital creating significant opportunities for
improved patient care, service efficiencies and better use of available space within the
existing hospital.
The overarching business strategy and aim is to deliver those services that the available
evidence has identified are required whilst: maximising the use of retained estate, minimising
new build and minimising global capital and revenue costs.
The Scottish Capital Investment Manual is clear that Investment Objectives should clearly
relate to the underlying policies, strategies and business plans of the Health Board. They
should be made SMART-specific, measurable, achievable, relevant and time constrained and
business cases which do not include SMART objectives will not be approved.
In the context of Day Surgery and Endoscopy the objectives set out below have therefore
been tested against SMART principles as follows:
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Investment Objective
Specific
Measurable
Achievable
Relevant
Time Constrained
Services will be provided in a
dedicated combined unit that is
separate from the inpatient service
and therefore removes the possibility
of disruption and cancellation as a
result of competing priorities in line
with BADS recommendations;
No
Day
Surgery
activity
will
be
disrupted by inpatient
or emergency surgical
activity.
No
Day Surgery
procedure
cancellations.
Physical separation
of the Day Surgery
facility
and
a
separate staffing rota
will
protect
Day
Surgery activity.
Process
is
consistent
with
BADS guidance.
Objective will be
realised on new
service
commencement.
Briefing
of
new
services will be based
on all relevant SHPN,
ADB
and
SHTM
guidance.
Design specification
will be compliant with
relevant SHPN, ADB
& SHTM’s.
Day Surgery and
Endoscopy are new
build. Renal may be
compromised by the
available
refurbishment area.
Compliance
with
Technical
standards
will
ensure
a
high
quality patient and
clinical environment
Objective will be
realised on new
service
commencement.
All patients will receive effective preprocedure
assessment
and
screening prior to attendance;
All patients will be
offered and attend a
suitable pre-procedure
assessment
appointment.
The patient record
will
identify
attendance.
Future
patient
pathway/process
includes
preassessment.
Pre-procedure
assessment
is
consistent with best
practice.
Objective will be
realised on new
service
commencement.
Patients will be offered a date for
surgery/endoscopy
at
preassessment, which will allow them to
plan ahead, with certainty, for their
procedure;
A record of the agreed
procedure date will be
recorded
in
the
patients medical notes
and managed by the
centralised
booking
service.
Medical notes will
identify the agreed
procedure date.
Agreement
of
procedure date is
part of the preassessment process.
Agreement
of
procedure date is
important
to
managing
DNA
rates and optimal
utilisation
of
available capacity.
Objective will be
realised on new
service
commencement.
Patients
will
receive
better
information about arrangements for
the day of surgery and endoscopy,
including admission and discharge
details as a result of redefining and
reconfiguring day surgery/endoscopy
as a discrete service;
All patients will receive
an information booklet
that will better prepare
them for their planned
attendance.
Medical notes will
identify
that
the
information has been
given to individual
patients.
Information giving is
part of the preassessment process.
Reinforcement
of
information
in
writing is important
to
patient
preparation,
understanding and
reassurance.
Objective will be
realised on new
service
commencement.
The facility will meet all current
space and technical standards;
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Centralised booking
service will optimise
utilisation.
Staff will be dedicated to Day
Services and will not be distracted
from their primary function by
responsibilities elsewhere;
Staff will be dedicated
to Day Services.
Staff rota’s will make
available dedicated
staff for each day
surgical/ endoscopy
session.
Waiting times will improve through
reduction in DNA and increased
throughput;
Planning for 100%
utilisation and meeting
with each patient preprocedure will reduce
DNA’s and improve
throughput. In turn
this will accelerate
improvements in
waiting times.
Additional capacity
and better certainty of
service delivery will
enable the
achievement of cancer
targets and 18RTT.
Information systems
will produce regular
reports on DNA’s,
theatre utilisation and
waiting times.
The satellite service will support
shifting the balance of care and
enabling care closer to people’s
homes;
Additional capacity at
Raigmore and the
satellite unit will
reduce travel
distances and improve
patient choice.
The satellite unit will
reduce travel time for a
significant number of
patients on dialysis.
Patient satisfaction
questionnaires will
reflect improvements
in the service and a
lower level of
complaints.
Information systems
will report on
reduced travel times.
Costs associated
with travel will fall.
Acute renal services at Raigmore will
be rationalised into a single inpatient
centre
that will improve
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The creation of a 7th
floor integrated
inpatient
and dialysis
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facility will concentrate
expertise in one area.
The new design will
accommodate
inpatient and dialysis
on the 7th floor at
Raigmore Hospital.
The Centre will support the
achievement of both cancer targets
and 18 week Referral to Treatment
Target (18RTT).
Patients will be able to access a
more flexible timetable of provision
for haemodialysis enabling this to
better match individual’s lifestyles;
Information systems
will produce regular
reports on cancer
targets and the
achievement of
18RTT.
Physical separation
of the Day Services
facility and a
separate staffing rota
will protect Day
Services activity.
The right capacity at
the right time with
properly prepared
patients will enable
improvements in
DNA’s, throughput
and waiting time
improvements.
Improved capacity
and protected lists
will improve
productivity thereby
enabling the
achievement of
targets.
More stations will
improve capacity and
a satellite unit will
reduce travel time for
many.
The satellite unit
location reflects the
proximity of a large
cohort of dialysis
patients.
Space planning
confirms that area is
available to deliver
up to 25 dialysis
stations on the 7th
floor.
Objective
is
consistent
with
BADS
guidance
and
good
management.
Objective will be
realised on new
service
commencement.
Important in
delivering timely
care, improving
productivity,
optimising service
delivery costs and
to the achievement
of national waiting
time targets.
Important in
delivering against
national targets and
improving the
health of NHS
Highland patients.
An immediate
improvement will be
achieved within 3
months of new
service
commencement.
Important in
enabling an
improvement in the
quality of life in
people with renal
failure.
Important in
enabling an
improvement in the
quality of life in
people with renal
failure.
Centralising
expertise will
enable improved
multi-disciplinary
working and
productivity.
Objective will be
realised on the
satellite service
commencement.
An immediate
improvement will be
achieved within 3
months of new
service
commencement.
Objective will be
realised on the
satellite service
commencement.
Objective will be
realised on new
service
commencement.
2.6 Existing Arrangements
Information and detail about existing arrangements is included at:
2.3.3 – Renal Service
2.3.4 – Operating Theatres
2.3.5 – Endoscopy
2.6.1 Government Waiting Time Targets
The investment in, and development of, Day Surgery and Endoscopy services is crucial to
NHS Highland’s ability to manage an ever-growing demand for services and to meeting
current and potentially more onerous treatment and waiting time targets. The current activity
analysis supported by demographic data as presented in Appendix 1-3 and elsewhere in this
document clearly demonstrates a need for additional capacity to support the delivery of
quality and timely health services.
Specifically, this data notes that a failure to provide the additional capacity required in any of
the 3 services covered by this business case; surgery, endoscopy or renal, within the next 18
months to 2 years will have an immediate impact on the Boards ability to maintain existing
waiting times.
2.7 Business Needs – Current & Future
Information and detail about current and future business needs is included at:
2.3.3 – Renal Service
2.3.4 – Operating Theatres
2.3.5 – Endoscopy
2.8 Desired Scope & Service Requirements
Information and detail about the desired scope and service requirements is included at:
2.3.3 – Renal Service
2.3.4 – Operating Theatres
2.3.5 – Endoscopy
2.9 Benefits Criteria
In compiling this OBC, a set of non-financial benefits criteria was developed based on the
outcome of a Workshop held with the following key stakeholders on the 12 th April 2010. A list
of the delegates who attended this Workshop are noted in Appendix Three of this OBC.
This main focus of the workshop was to identify the key (non-financial) benefits that the
project options would be evaluated against.
The discussion was wide ranging and a number of key benefits were identified as being
desirable outcomes for the project. After some debate, the following were agreed by the team
as the key Benefits Criteria by which options would be scored:
1.
Improves access to health services for all.
 Provides services closer to patients
 Reduces waiting times (globally)
 Increases BADS percentage
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 Reduces travel distances overall
 Reduces travel inequality
2. Supports the implementation of new models of care and the wider clinical
strategy







3.
Improves capacity & throughput
Separates Emergency & Elective workload
Improves compliance with regulation e.g. decontamination
Enables the reduction of outmoded techniques e.g. barium enema
Enables the separation of inpatient and outpatient activity e.g. dialysis
Reduces bed numbers overall
Reduces patient length of stay
Improves the patient pathway & patient journey
 Shortened and concise pathway
 Reduced number of “hand-offs”
4. Improves the quality of clinical care including standards and clinical outcomes
5. Improves the quality of the physical environment and fitness for purpose of all
new/ re-designed facilities




Complies with current guidance re spaces (SHPN)
Improves natural daylight
Improves patient experience
Improves QIS review & score
6. Improves Privacy & Dignity
 Reduces travel distances between clinical areas
 Provides discrete functional areas e.g. waiting, changing, interview and discharge
lounge
 Provides “age appropriate” facilities
 Provides quiet/discussion/consultation spaces in all clinical environments
 Meets all standards re soundproofing
7. Supports the retention and recruitment of staff





Provides a healthy and desirable working environment
Improves staff satisfaction
Travel to work is easier
Increases number of applicants meeting job specification
Reduces staff turnover
8. Improves flexibility and efficient use of staff resources
 Enables improved operating theatre utilisation
 Enables multi-skilling of staff
9. Enables the implementation of local and national strategy
 Fully supports the achievement of BADS targets
 Enables the achievement of waiting times
 Supports a “shift in the balance of care”
 Supports the realisation of “HEAT” targets
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10. Planning and tenure issues are minimised
 Ease of acquisition
 Ease of contract change
 Minimises impact on programme
11. Speed of Delivery
 Enables key deliverables within programme timeframe
12. Transition management
 Minimises the need for decanting
13. Supports the Environmental agenda
 Enables an overall reduction in Carbon (Facilities)
 Reduces transportation requirements
14. Makes more efficient use of existing Estate and Property
 Is in line with and wholly supportive of the NHS Highland Property Strategy
 Minimises the requirement for additional new buildings
 Maximises use of existing NHS Highland Estate
15. Minimises hospital acquired infections (HAI)
 Meets all required criteria
 Follows Hospital Acquired Infections (HAI) SCRIBE process
 Identifies separate and discrete "clean" and "dirty routes"
Please see section 6.4 below for the development of these Benefits Criteria through the
Business Case process.
2.10
Strategic Risks
As the scope of the project began to consolidate, a Workshop was held to identify and
consider the key business, service & external risks and to discuss appropriate and specific
mitigation/ management proposals to ameliorate these risks as far as practicable.
The workshop participants comprised the key Project Team members, Clinical and Financial
representatives from NHS Highland and Key members from the PSCP Team. The exercise
was hosted by the PSCP’s Business Case consultants, Currie & Brown. Please see
Appendix Three for a note of attendees.
The remit for the team was to consider the key strategic risks that could have the effect of
placing the viability of the project (or elements of the project) in jeopardy or that could harm
service delivery to the detriment of the patients being served by the new facility(s).
The main strategic risks, and their mitigation factors, identified are as follows: Transition
NHS Highland recognises that the reconfiguration of Day Surgery, Renal and Endoscopy
services into a new facility represents a major challenge in terms of ensuring that service
continuity is maintained. To move services from the various locations in the Raigmore into
the new facilities will be a major logistical exercise in migration terms.
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Planning for this transition has already commenced and in order to mitigate this risk the
following steps are being put in place to ensure a seamless migration is achieved.

NHS Highland has appointed a Project Manager to the project, part of whose duties
will be to manage the migration exercise.

The clinical staff associated with each of the services will be carrying out a clinical
risk assessment in relation to the move.

A communications plan is being put in place to inform patients and staff well before
any migration exactly what arrangements are being made for the phasing of clinics
and treatment areas etc.
In addition to all of the above and in order to ensure that services suffer minimal impact it is
also proposed that there is transitional approach to the “close down”, move and resumption of
each service – this is designed to allow each service to minimise downtime and to be able to
continue to maintain the service levels required to meet patient demand.
It should be noted that the staff who will take ownership of the migration (and who will
comprise the working group examining these issues ahead of time) have been identified by
NHS Highland.
New Service model
Inherent in the project outcomes for the Project is the opportunity to realign the service
delivery model to promote best practice and new methodologies aimed at service
improvement.
However, in order to implement these changes to service delivery, the project team are very
aware that there can be short-term risks during the transition to the new working practices,
especially when coupled to the move into the new facility. The risk to be avoided here is very
much the transfer of old practices into the new facility.
In order to minimise the impact of this, NHS Highland is currently (ahead of the main project
implementation) carrying out an “early implementation programme” designed to shift toward
the new service delivery models (as far as practicable in current premises) prior to the move
to the new facility.
This includes for the training of clinical and other operational staff into the new working
models. Communicating and informing people about any changes to working patterns and /or
conditions of service and setting up an HR working group to implement change and deal with
any staff issues.
These steps are being taken in close consultation with the Unions represented in the
Raigmore.
It is anticipated that the steps taken above together with integrating communication of the new
model as part of the wider stakeholder consultation should minimise the risk to disruption of
services when implementing the new model.
Biomass Provision
It is the intention that this project also allows for the establishment of a Biomass heating
system – this is included as both a measure that supports the new facility’s “Very Good”
BREEAM rating and one which supports NHS Highland’s move to reduce the carbon footprint
of the Raigmore site in general terms.
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However, it is recognised by the Project Team that, Correctly, NHS Highland are looking at
the wider picture of the sustainability of the entire Raigmore estate. It is noted that a separate
Business Case is being progressed by the Board that seeks to enhance the site’s Biomass
capacity in order that this can be the predominant energy supply methodology across the site.
In order that this proposal (which is currently on a differing timescale from this OBC) does not
adversely impact the implementation of the new Day Services facility, a twin track approach
has been adopted.
The Biomass provision to supply this project as a stand alone is accounted for in this
Business Case and a sum of £400,000.00 has been allowed in the capital costs for the
project.
This sum will be used to build a Biomass facility capable of future linkage with the main
proposals should this case continue to be the lead development on site. However, if the
proposals for Biomass for the entire Raigmore site crystallise whilst this project is still in preconstruction stages, then the £400K will be diverted from this project and will contribute to
raising the capacity of the overall Biomass facility for the site.
The Project Team will stay across this issue and will maintain close links with the Board’s
team responsible for the overall Biomass proposals for the site.
2.10.1 Implications of not meeting the need
If the needs articulated in this Business Case are not met through the provision of the new
build and refurbished facilities, the following implications will become apparent: 
NHS Highland will be unable to provide additional Day Surgical, Endoscopy and
Renal capacity that will allow NHS Highland to meet current and future demands and
enable the implementation of modern clinical practice;

The opportunity to improve business processes, patient flows and clinical pathways
that optimise the efficiency of clinical services will not be met;

The capacity required to meet the Governments waiting time targets related to
surgical activity, specifically to meet the 84% BADS HEAT target will not be achieved;

The working environment for day surgery, endoscopy and renal staff will continue to
be substandard and fall short of modern day standards and could adversely impact
on the recruitment & retention of specialist staff;

Renal patient numbers in NHS Highland are forecast to rise to 332 by 2015.
Raigmore renal unit is operating very close to capacity and is not physically able to
increase the number of haemodialysis stations to cope with projected growth having
already compromised virtually all available office/ storage/ auxiliary space. While the
limiting of renal treatment is not ethically advisable, treatment will effectively be
rationed if the hospital haemodialysis service is not expanded. The associated risks if
the recommendations made are not implemented are of a catastrophic failure of
Renal Services in NHS Highland.

The opportunity to provide an integrated, fit for purpose, integrated Renal service in
an environment that is appropriate for patient’s needs will not be realised;

Decontamination facilities will not meet the requirements of the recent JAG report and
a separate project will require to be developed to comply with the new
decontamination standards;
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
Services could become unsustainable (Local and NHS Highland-wide), more costly
and breach patient safety standards; and

Lack of investment could result in further deterioration to building performance and
ability to meet environmental standards.

Continued reliance on weekend operating sessions will put pressure on operating
budgets.

Continued insufficient theatre capacity will create challenges in terms of maintenance
and upgrade.

Out of date Day Surgery facilities may deter surgical and anaesthetic staff from
seeking employment at Raigmore Hospital. Retention of staff may also be an issue.
2.11 Constraints & Dependencies
The key constraints within which the project must proceed are considered to be as follows:

The level of capital funding available for the project

Revenue Affordability

Part of the works will be undertaken in a live clinical environment

The 7th Floor cannot be released until other works have been completed to allow
existing functions to move

The Invergordon facility is subject to PPP contract necessitating negotiations with the
PPP Service Provider before works can be implemented

Site conditions (Day Services) – proximity to Raigmore Hospital and adjacent roads

Helicopter flight paths – adjacent to the Day Services Centre

Existing road ways

Proximity of maternity unit

Existing underground services
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3.0 The Economic Case
In the following sections we will seek to demonstrate that the Project optimises value for
money by assessing the Critical Success factors and introducing the main business options
available to deliver the Project. The preferred way forward will be highlighted prior to
developing a list of options to be considered and tested to realise the most appropriate path to
fulfilling the requirements of the project. Costs and benefits for the economic appraisal of the
options will be presented alongside an appraisal of the non financial benefits and risks to the
Project. The sensitivity analysis will then allow a testing of the accumulated data to allow the
selection of a preferred option.
3.1 Critical Success Factors
One of the main components of a clinical service and capital investment strategy is a range of
issues which represent a measure of how effective the investment has been. In addition
these critical success factors are an important yardstick for judging the various options under
consideration. The Critical Success Factors have been ranked and weighted as follows:
Critical Success Factor
Weighting
Rank
a. Development of Clinical Services
40%
1
b. Local Services for Local People
15%
3
c.
5%
4
40%
2
Recruitment, retention and training of staff
d. Affordability
These factors can also be augmented by the Board’s Health improvement, Efficiency, Access
and Treatment (HEAT) Targets as set out in Better Health Better Care.
The Day Services Project encompasses three services i.e. Day Surgery, Renal Services and
Endoscopy. It is therefore important to identify success factors for each of these services.
a.
Development of Clinical Services
Day Surgery Services
In addition the Planned Care Improvement Programme, which promotes day surgery as the
norm, provides an important range of measures against which the success of the Day
Services Project can be measured. These include: 
75% overall Scottish target for same day care Currently in Scotland around 66% of all
'procedures performed in surgical specialities' are carried out as day case or
outpatient.
To reach a 75% target, approximately 40,000 elective inpatient
procedures would need to be converted to day cases or outpatients in a year
In order to be relevant these national targets require to be relevant locally within NHS
Highland. In the case of the Day Services Project the following factors can be used:


Increase capacity for existing services
Due to the increasing demand for same day surgery services it is important that any
investment proposal can demonstrate an increase in the range of services being
offered to patients
 Improved access for patients. A key feature of the development of modern health
care is how long patients have to wait for treatment. There a number of factors which
impact on how quickly patients are treated e.g. how efficiently patients can be
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assessed, the clinical priority accorded to a patient’s condition and availability of
resources both staffing and facilities. All of these measures should be enhanced
through the provision of a same day surgery services
Renal Services
When the project is completed the Renal Services should comply with the following standards
A patient-centred service
All children, young people and adults with chronic kidney disease are to have access to
information that enables them with their carers to make informed decisions and encourages
partnership in decision making, with an agreed care plan that supports them in managing their
condition to achieve the best possible quality of life.
Preparation and choice
All patients approaching established renal failure are to receive timely preparation for renal
replacement therapy so the complications and progression of their disease are minimised,
and their choice of clinically appropriate treatment options is maximised.
Elective dialysis access surgery
All patients with established renal failure are to have timely and appropriate surgery for
permanent vascular or peritoneal dialysis access, which is monitored and maintained to
achieve its maximum longevity.
Dialysis
Renal services are to ensure the delivery of high quality clinically appropriate forms of dialysis
which are designed around individual needs and preferences and are available to patients of
all ages throughout their lives.
Transplantation
All children, young people and adults likely to benefit from a kidney transplant are to receive a
high quality service which supports them in managing their transplant and enables them to
achieve the best possible quality of life.
Endoscopy Services
The following criteria will be applied to the Endoscopy Service to measure the effectiveness of
the investment associated with the Day Services Project






A single point of referral with all appointing carried out within a dedicated Patient
Focussed Booking System booking on one site.
Routine endoscopy lists are pooled to ensure patients receive the next available
appointment.
Patients are asked to phone to confirm appointments to reduce DNAs and cancelled
slots to ensure better use of capacity.
Bowel preparation (where required) is sent by post to patients with easy-to-read
instructions.
All urgent referrals are vetted by senior nursing staff in line with referral protocols.
Planning towards the implementation of the Endoscopy Community Model based on
a GP Direct Access process.
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In addition to the service specific Critical Success Factors there are a range of generic issues
which the Project must address.
b.
Local Services for local people
A key feature of the Day Services Project is a shift in the balance of care and consequently
this will be an important measure of whether the investment in the project has been
successful.
Shifting the balance of care has been a key theme in the work of the Scottish Government
Health Directorates for a number of years. Previous policy documents, in particular,
Delivering for Health (2004) and the Better Health, Better Care Action Plan (2007), raised the
profile of shifting the balance of care in Scotland, which is intended to bring about
improvements in service delivery and health outcomes.
Shifting the Balance of Care is a term used to describe change at a number of levels




c.
Focus: shifting the emphasis towards preventative medicine and more care in the
community, based on a fundamental change in the way we tackle the causes of ill
health and by providing care which is quicker, more personal and closer to home. It
also means shifting the focus away from services geared toward acute conditions to
providing systematic support for people with long term conditions with a strong
emphasis on continuous, integrated care rather than disconnected episodic care.
Location: shifting the location of services and care in order to improve access to
treatment and support. This involves the wider provision of diagnostic procedures
and access to specialist services embedded into communities through Community
Health Partnerships. This means less acute hospital-centred activity and more
services and support provided in community hospitals, other local facilities and at
home. Services and care should increasingly be provided in locations that are easily
accessible for users with greater consideration given to transport requirements. This
will enable care providers to get a better balance between planned and unplanned
care.
Responsibility: shifting the current view of patients/clients as passive recipients of
care towards full partnership in the management of their conditions. This involves
providing more support for people to look after themselves and remain as
independent as possible using new technologies for telemedicine and telecare to help
people to manage their conditions and stay longer in their own homes.
Professional Roles: shifting the emphasis away from the independence of individual
practices and professionals towards a more extended primary and community care
team approach. This means developing professional and staff roles, skills, expertise
and responsibilities, with a greater focus on teams delivering integrated care
pathways involving a wider range of partners, including patients and carers.
Recruitment, retention and training of staff
A significant measure of success will be to improve levels of staff retention, aid recruitment
and to provide modern facilities which will promote fit for purpose training modules. In the
longer term through retirement & natural turnover of staff, recruitment & retention issues will
arise in that staff trained in modern day surgical procedures may not apply for vacancies in an
NHS area such as NHS Highland currently without such a service and therefore there is a risk
that vacant posts will be deemed as ‘hard to fill’, which may make it more difficult to attract
potential employees to work at Raigmore Hospital.
Conversely there is also the risk that staff turnover may increase as staff choose to leave the
area to work in other centres of excellence to develop their skills/experience for
personal/career development. Raigmore Hospital will be unable to provide training in modern
day surgical procedures not only to its existing staff but also to students.
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d.
Affordability
The level of resource required to complete this Project is set out in the Financial Case. There
are a wide range of clinical benefits which will be realised as a result of this investment.
However against the background of unprecedented financial pressures on NHS Highland the
Day Services Project must be seen to deliver real financial benefits.
3.2 Main Business Options
Option Identification
The following sections of the OBC will provide details of the development of options
considered, the benefits, costs and risks associated with the short listed options and the
rationale for the selection of the preferred option.
The option identification and appraisal process adopted for this project is in line with that
recommended within the Scottish Capital Investment Manual (SCIM).
There were two elements to the option appraisal process as follows:


An analysis to determine the optimal site for the re-provision of services
An option appraisal considering a range of services that could be provided
Long List of Options
The NHS Highland Board considered and endorsed a report from Buchan Associates at its
meeting in February 2010. In addition to other recommendations the Report identified a list of
options for the Project. The NHS Highland Board tasked the Project Board to examine the
options outlined in the report and develop a Preferred Option.
The Project Board at its meeting in March 2010 identified the following long list of options
which would be subjected to appraisal leading to a short list of options from which a Preferred
Option would emerge. In addition the Project Board decided to remove Ophthalmology from
the scope of the Project.
A long list of options was developed taking into account the full range of services as set out
below:
Figure: Long List of Options
Option
Description
1
New Build Day Services
Comprising 3 Endoscopy Rooms, with the capability to increase to 4
alongside 2 Theatres.
2.1
Day Surgery Refurbishment
Relocation of ITU to a refurbished Ward 2C with an extended Theatre lift. 2
day Theatre’s inserted into existing Theatre post- anaesthetic recovery area.
Combined main and day Theatre post- anaesthetic recovery located to a
refurbished ITU. The remaining First Floor area refurbished for a day
Surgery department with CCU to remain unaltered on the Sixth Floor.
2.2
Day Surgery New Build Off Site
Develop a decentralised Day Surgery Unit within New Build accommodation.
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3.1
Endoscopy in Ward 11
Refurb (and extend if necessary) Ward 11 for a new endoscopy department
leaving the current Children’s Ward unaltered.
3.2
Endoscopy in Children’s Ward
Ward 11 moves to Ward 7A and is refurbished and extended as necessary
to provide accommodation for the Children’s Ward with a possible link
through to Theatre’s. Refurb existing Children’s Ward for new Endoscopy.
3.3
New Build Endoscopy
Develop a new Endoscopy Unit within New Build accommodation
4.1
Single Storey New Build Day Surgery and Endoscopy
Within the Raigmore grounds
4.2
Two Storey New Build Day Surgery and Endoscopy
Within the Raigmore grounds
4.3
New Build Day Surgery and Endoscopy on Ward 11
Relocate Ward 11 and construct a 2 storey New Build Day Surgery and
Endoscopy building on Ward 11 site.
5.1
Renal to BTS
Site a 25 bay Renal Ward within the current Blood Transfusion Service
building, with additional New Build to compliment the shortfall in area.
5.2
Renal to BTS with Satellite
Utilise Ground and First Floor of the Blood Transfusion Service building for
as much Renal Accommodation as can be managed, with an offsite satellite
unit to house the balance of the 25 dialysis bays required.
5.3
Renal to Ward 11
Refurbish Ward 11(and extend as necessary) to accommodate a new Renal
department, leaving the current Children’s Ward unaltered.
5.4
Refurb Renal with Satellite
Refurbish existing Renal department with the remaining balance of 25
dialysis bays being accommodated in an offsite Satellite unit
X
Do Nothing
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3.3 Preferred Way Forward
Following a robust option appraisal process involving a wide range of stakeholders, the NHS
Board has determined that its preferred way forward is to explore ways in which day surgery,
endoscopy and renal services can be provided in a way which




Same day care is the norm
Promotes a Shift in the Balance of Care
Ensures the most effective and efficient use of the existing NHS Highland Estate
through minimising new build facilities
Recognises the review of clinical activity data and population projections and its
impact upon the reduced range of facilities required to provide day surgery,
endoscopy and renal services
3.4 Short List of Options
In order to develop a short list of options for the full OBC option appraisal process, the long
list of options identified above has been subjected to a range of criteria (project objectives and
constraints). In view of the fact that the project seeks to address the needs of three distinct
clinical services the Project Board decided to retain the long list of options for as long as
possible.
The key project objectives are set out below.
Project Objectives

To provide additional Day Surgical, Endoscopy and Renal capacity that will allow
NHS Highland to meet current and future demands and enable the implementation of
modern clinical practice;

To improve business processes, patient flows and clinical pathways that optimise the
efficiency of clinical services;

To provide capacity to meet the Governments waiting time targets related to surgical
activity, specifically to meet the 84% BADS HEAT target;

To provide a modern working environment which is attractive to current and
prospective employee’s, improving recruitment & retention at Raigmore Hospital and
the location of the satellite dialysis facility;

To provide an integrated, fit for purpose, Renal Dialysis service in an environment
that is appropriate for patient’s needs;

To develop a modern Endoscopy unit with sufficient capacity that meets current
demands and has appropriate supporting services and a compliant decontamination
unit and;

To appropriately share facilities and services where this is clinically appropriate, e.g.
the creation of a shared endoscope cleaning area.

To develop facilities that are more sustainable and efficient than those that they
replace

To utilise essential investment to deliver optimal improvement in overall performance
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Option Appraisal
The option appraisal process adopted for this OBC is in line with that recommended in the
Scottish Capital Investment Manual (SCIM) and involved assessing for each of the options:




Benefits (scored against criteria)
Costs (Financial Appraisal)
Value for Money (Economic Appraisal)
Risks
Key Features of Long List of Options
The following matrix provides a qualitative analysis of the key pros and cons of the long list of
options.
Option
Option 1: Revised Day Services
Centre
Option 2.1: Day Surgery @ First &
Second Floor Wards
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Pros
Cons

Supports new models of
care

Reduced transition
management issues

May require additional
staff resource – greater
inflexibility

Leaves significant
redundant space in
existing estate

Less efficient
adjacencies
Length
of
time
to
implement
High levels of disruption
Increased risk of infection
Potential to reduce NHS
Highland’s
ability
to
respond
to
new
developments in clinical
services

Shorter build programme

No infrastructure
surprises e.g. asbestos

Enables an integrated
surgical service


Supports new models of
care




Improves the patient
pathway & journey

Enables the upgrade of
ITU

Enables the flexible use
of staff

Makes efficient use of
existing estate
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Option
Option 2.2: Day Surgery @
Notional Site
Option 3.1: Endoscopy @ Ward 11
Option 3.2: Endoscopy @
Children's Ward
Option 3.3: New Build Endoscopy
on Raigmore Site
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Pros
Cons

Supports new models of
care

Requires additional
staffing/resources

Reduced transition
management issues

Remote from main
surgical centre

Does not enable greater
use of existing estate on
Raigmore site

No identified site

Potential planning &
tenure issues

Supports new models of
care

Single rooms require to
be re-provided

Improves the patient
pathway & journey

Longer patient journey for
inpatients

Improves quality of care

Improves privacy &
dignity

Makes efficient use of
existing estate

Enables the relocation of
the Chest Unit to tower
block

Supports new models of
care

Children’s ward becomes
isolated

Improves the patient
pathway & journey

Longer implementation
programme than other
options

Improves quality of care


Improves the clinical
environment
Layout of Endoscopy
may be compromised
due to configuration

Improves privacy &
dignity

Improves children's’
facilities

Supports new models of
care

Requires additional
staffing/resources

Reduced transition

Remote from main
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management issues

Option 4.1: Day Surgery &
Endoscopy @ DSC Site (single
storey)
Option 4.2: Day Surgery &
Endoscopy @ DSC Site (2 storey)

Supports new models of
care

Reduced transition
management issues
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15th October 2010

Does not enable greater
use of existing estate on
Raigmore site

Inefficient use of
Raigmore site

May require additional
staff & resource – greater
inflexibility

Leaves significant
redundant space in
existing estate

Shorter build programme

Retains efficiency of
combined Day Surgery
and Endoscopy

Inefficient use of foot print

Supports new models of
care

May require additional
staff & resource – greater
inflexibility

Reduced transition
management issues

Leaves significant
redundant space in
existing estate

Less efficient adjacencies

Single rooms require to
be reprovided

Option 4.3: Day Surgery &
Endoscopy @ Ward 11
New build has minimal
impact on flight Path
surgical centre
Shorter build programme

Supports new models of
care

Improves the patient
pathway & journey

Improves quality of care

Improves the clinical
environment

Improves privacy &
dignity

Improves flexibility and
use of staff

Improves link to Main
Theatres

Enables more efficient
use of space

Enables the relocation of
the Chest Unit to tower
block
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Option 5..1: Renal @ BTS Building
Option 5.2: Renal @ BTS Building
& Satellite

Supports new models of
care

Improves quality of care

Improves the clinical
environment

Makes efficient use of
existing estate
Option 5.4: Renal @ Renal &
Satellite
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Does not enable
implementation of local
/national strategy

Acquisition time could be
protracted

Need to identify
alternative location for
Haematology

Distance from wards
(acute dialysis)would
require dialysis capability
in tower

Remote from main
access routes

Potential planning and
tenure issues with
satellite

Improves access to
health services

Supports new models of
care

Acquisition time could be
protracted
Improves the patient
journey/pathway

Distance from wards
(acute dialysis) would
require dialysis capability
in tower

Remote from main
access routes

Distance from wards
(acute dialysis) would
require dialysis capability
in tower

Single rooms require to
be re-provided

De-centralises staff

Option 5.3: Renal @ Ward 11


Improves quality of care

Improves the clinical
environment

Enables implementation
of local & national
strategy

Supports new models of
care

Improves the patient
pathway &journey

Improves quality of care

Improves the clinical
environment

Improves privacy &
dignity

Makes efficient use of
existing estate

Enables the relocation of
the Chest Unit to tower
block

Improves access to
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health services
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
Supports new models of
care

Improves the patient
pathway & journey

Improves quality of care

Improves the clinical
environment

Improves privacy &
dignity

Makes efficient use of
existing estate

Enables implementation
of local & national
strategy

De-centralises staff

Potential planning and
tenure issues with
satellite
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
Potential planning and
tenure issues with
satellite

Planning & tenure issues
are minimised
3.5 Combination of Options
The process of identifying an overall clinical solution and a consequent Preferred Solution
must therefore be based upon a range of combinations of Day Surgery, Endoscopy and
Renal Services options.
In developing these combinations the following assumptions were made:


The 7th Floor is the only viable decant space within Raigmore and
The BTS Building will be available.
The table below seeks to identify those options which are possible to provide e.g.

Option 2.1

Option 2.1
Option 3.3
Option 5.3

Day Surgery Refurbishment in Raigmore, cannot be combined with
Option 3.1 Endoscopy in Wd 11, as they require the same decant
space to complete each option;
Day Surgery Refurbishment in Raigmore can be combined with
New Build Endoscopy as they are providing different services;
Renal in Wd 11 cannot be combined with Option 5.1 Renal in BTS
as they are providing the same service.
The key used in the table below is as follows:-
These combinations will therefore form the basis of the development of the Preferred Solution
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3.6 Benefits Appraisal
3.6.1
Benefits Weighting and Scoring
The benefits generation workshop was held at the Raigmore Hospital on 12th April 2010
The participants are appended as Appendix Three in this OBC.
The purpose of the workshop was to examine the key drivers and benefits that NHS Highland
was looking to achieve through the project, formulate the Benefits Criteria which options
would be scored against and weight these benefits relative to each other.
It also explained that the Benefits Criteria contained in the original OBC, though in need of
further definition, must be accounted for in this exercise in order to maintain an “audit trail” of
commonality through the Business Case stage of the project6
The weightings to be applied to each of the Benefits are in increments of 5 – 20 as noted
below: 



5 – of least (relative) importance, “good to have”
10 – important that some element is reflected in the project
15 – very important to the project
20 – Fundamental to the project
The following were agreed by the team as the key Benefits Criteria by which options would be
scored:
Table 3.6a Benefit Criteria and Weightings
No Benefit Criteria
Weighting
1
Improves access to health services for all
20
2
Supports the implementation of new models of care and the wider clinical
strategy
20
3
Improves the patient pathway & patient journey
20
4
Improves the quality of clinical care including standards and clinical
outcomes
20
5
Improves the quality of the physical environment and fitness for purpose of
all new/redesigned facilities
20
6
Improves Privacy & Dignity
15
7
Supports the retention and recruitment of staff
10
8
Improves flexibility and efficient use of staff resources
15
6
The Benefits Criteria contained in the OBC have been demonstrably carried over into the
exercise below.
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9
Enables the implementation of local and national strategy
15
10
Planning and tenure issues are minimised
10
11
Speed of Delivery
10
12
Transition management
5
13
Supports the Environmental agenda
15
14
Makes more efficient use of existing Estate and Property
15
15
Minimises hospital acquired infections (HAI)
20
Total
230
The Long List of Options referred to in 3.2 above was then scored as part of the NonFinancial Appraisal Process.
3.6.2 Benefits Appraisal Weighted Scores
In order to take forward the Appraisal process a Workshop was held on 28th May 2010 at
which each of the above options was scored against the Non- Financial Benefits Criteria. The
relative weightings for each of the Non- Financial Benefits Criteria were also finalised .The
Workshop was facilitated by Alasdair Kinghorn, Keppies Architects; Iain Buchan, Buchan
Associates; William Nicol, Cyril Sweett; Kevin Gauld, Currie & Brown.
The Patients Council did not attend the Workshop. However detailed discussions had taken
place with their Chairman and they are receiving regular updates on the progress of the
Project.
The workshop was attended by those shown below representing clinical, managerial, financial
and estates staff.
The participants are appended as Appendix Three in this OBC.
Presentations were made outlining the strengths and weaknesses of each of the options
under consideration. The outcome of the Workshop is shown below:
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Table 3.6c Results of Non Financial Benefits Scoring Workshop
Option
4.3
5.4
5.2
1.a
3.1
4.1
3.3
4.2
5.3
2.2
2.1
5.1
3.2
X
New Build Day Surgery and Endoscopy on Ward 11
Refurb Renal in Raigmore with Satellite
Renal to BTS with Satellite
New Build
Endoscopy in Ward 11
Single Story New Build Day Surgery and Endoscopy
New Build Endoscopy
Two Storey New Build Day Surgery and Endoscopy
Renal to Ward 11
Day Surgery New Build Off Site
Day Surgery Refurbishment
Renal to BTS
Endoscopy in Children's Ward
Do Nothing
weighted
score
% to total
ranking
755
746
744
710
709
697
690
690
688
654
635
635
632
365
82.1%
81.1%
80.8%
77.1%
77.0%
75.8%
75.0%
75.0%
74.8%
71.1%
69.0%
69.0%
68.7%
39.6%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Options 5.2 and 5.1 were excluded from the long list and the consequent financial appraisal
due to the constraints in obtaining the BTS Building. The principal issues were that there was
a lack of clarity around when BTS would move and that NHS Highland did not own the entire
BTS building.
Option 5.3 Renal to Ward 11 was excluded from the financial appraisal because 4.3 New
Build Day Surgery and Endoscopy on Ward 11, was the top ranked option and consequently
made better use of Ward 11 than Option 5.3 in terms of non- financial benefits.
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3.7 Risk Assessment
3.7.1 Overview
This section of the OBC sets out the process used by the Project Team to assess the risks
associated with the short-listed options for the project and to account for these risks as part of
the considered process towards the identification of the Preferred Option.
Together with financial and benefits appraisal, risk assessment is one of the core processes
to be undertaken in determining the preferred option at outline business case stage. The
process followed by the Project Team conforms to the guidance set out in the Scottish Capital
Investment Manual.
The risk assessment is intended to identify the key qualitative risks associated with the short
listed options. The key risks are developed and assessed to determine the extent to which
these relate to the options. Subsequently a risk management strategy is developed to
determine how to best manage the risks.
3.7.2 Methodology
A three point process was used to assess the risks for each of the options, the three stages in
the process were as follows: 
Risk Identification – developing a risk register covering all risks associated with the
project

Risk Assessment – assessing each short-listed option against the risks identified in
the risk register, in terms of both impact and probability, to determine the overall level
of risk exposure of each option.

Risk Management (Mitigation) – developing, for the preferred option, a risk
management plan to manage the risks identified by the risk assessment. This
includes identifying who is responsible for managing the risk and what contingency or
mitigation measures are to be put in place.
The method by which NHS Highland, its advisors and the PSCP implemented the above
process is noted below.
3.7.3 Risk Identification & Assessment
The formal risk workshop to examine all of the options was undertaken on the 15th September
at Morrison Healthcare’s offices in Inverness. A list of the attendees for the Workshop is
included at Appendix Three of this OBC and the individual risk profiles for each of the
options are included at Appendix Five.
A comprehensive list of risks likely to impact on the project was identified during the
Workshops. These are encapsulated in the risk matrix adopted as part of this OBC. The
risks assessed fell into the following categories:
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Risk Category
Description
Business Case / Financial
Risks that would have an Impact
on the viability or progression of
the Business case or the
Financial/Funding standing of
the project.
Legal and legislative risks
affecting
the
delivery
or
operation of the project.
Risks in the design phase of the
project, in particular around
planning issues or the risk of the
design failing to meet the brief or
the Authority requiring changes
to the design
Risks during the construction
phase, including those which
may delay completion
or
increase construction costs
Risks
associated
in
the
operational and staffing aspects
associated with each of the
options.
Risks which do not fall within
any of the above categories, for
example reputational or political
etc
Legal
Planning &Design Risks
Construction
Operational
Other Risks
The Project Team then undertook an assessment of the impact and probability of each risk
occurring for each of the short-listed options. The scoring process and definitions are shown
below:
The table below describes the categories used for assessing the impact on the project of
each risk occurring:
Table – Risk Impact Scores
Impact on Project
Score
Negligible impact – insignificant slippage on delivery date or increase in cost
AND/OR quality of service barely affected
Medium-low impact – up to 5% increase in costs or slippage on delivery
date AND/OR some minor quality failures
Moderate impact – 5% to 10% increase in costs or schedule slippage
AND/OR noticeable quality reductions
Medium-high impact – 10% to 25% increase in cost or delivery timescales
AND/OR significant quality failures
Major impact – increase of 25% or more on costs or delivery timescales
AND/OR serious and unacceptable quality failures
1
2
3
4
5
This next table describes the categories used to assess the probability of the risk occurring
in the project:
Table – Risk Probability Scores
Likelihood of Occurrence
Score
Occurrence is very unlikely – Low Probability
Occurrence moderately likely – Medium Probability
Occurrence very likely – High Probability
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1
2
3
The score for each risk for each option is therefore calculated as follows: Impact x
Probability = Risk Score (minimum 1, maximum 15).
3.7.4 The Results of the Risk Workshop
The aim of the Workshop was to focus on each of the options and identify the major risks that
could be determined at this stage that may impact on the procurement of that option.
Following that, there was an examination of mitigation factors for each of the risks.
As discussed above, the workshop followed a tabulated format and the results for each option
can be seen on the worksheets at Appendix Five of this OBC.
However, the headline risk issues for each of the Options are as follows: Option 1a – New Build Day Services
A thorough risk analysis was undertaken on this option (which represented all services
combining into a new build facility) and the pertinent risks noted in terms of construction,
planning and operational risks. However, during the considerations for this option it became
obvious that the option failed in its entirety due to two operational risks that were identified.
These are: 1. The option did not promote a shift in the balance of care (all services centred onto
Raigmore site)
2. The option did not improve the existing hospital infrastructure (no cognisance of
efficiency in the existing estate)
Because of the two fundamental failings above, this option was taken out of the consideration
process.
Option 2.1 – Day Surgery Refurbishment
This combination of refurbished elements within Raigmore yielded a range of risks across all
categories. However, the main risks identified are centred around the undertaking of
refurbishment works within Raigmore in terms of impact on operations.
It should be noted however, that mitigation measures are available to ameliorate much of the
risk associated with carrying out refurbishment works in a live hospital environment and these
are identified in the appended risk register.
Option 2.2 – Day Surgery, New-Build off site
This option was fully risk appraised. However, the option as envisaged would not give a truly
efficient split of services though it was recognised that it went some way to meeting a shift in
the balance of care.
Following careful consideration it was agreed that this option would not proceed through the
next stages due to inefficiencies in the manner in which services would be split (leading to
inefficient working and a duplication of services over the two sites) and, significantly, because
no suitable site (whether in NHS ownership or outwith) could be identified.
Option 3.1 – Endoscopy in Ward 11
Although this option was fully risk assessed and the results are included in the appended risk
workshop outcomes, it was decided not to proceed with this option.
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This was due to the crystallisation of many of the factors identified at the risk workshop in
terms of decant “double handling” and the levels of disruption within the Raigmore for
diminished clinical benefit compared to other options. It was also noted that the complex
decant arrangements required would prove to be more costly than those required by other
options.
Option 3.2 – Endoscopy in Children’s Ward
Again, in similar fashion to above, this option was fully appraised. However, the option was
discounted due to the unacceptability of displacing the Children’s Ward.
Option 3.3 – New Build Endoscopy
This option was fully assessed by the Project Team at the risk workshop. However, it
became apparent that this option contained the same inherent weaknesses as Option 1,
above, these are: 1. The option did not promote a shift in the balance of care
2. The option did not improve the existing hospital infrastructure
Option 4.1 – Single Storey New Build Day Surgery and Endoscopy
This option forms part of the Preferred Option as it represents, along with the Renal Preferred
Option, the best balance in terms of making use of the existing estate and in promoting the
shift in the balance of care. This is due to the configuration of the services within the new
build coupled with the opportunities that the Renal option presents in terms of the existing and
extended estate.
It was noted that any new build on the site would have the potential to disrupt traffic flows on
site during construction. This has been identified as part of the risk exercise and early
engagement by the PSCP has been identified as a mitigating action.
Option 4.2 – Two Storey New Build Day Surgery and Endoscopy
This option was assessed in the same manner as the option above. However, there were
perceived to be significant disadvantages in adopting a two storey solution compared to a
single storey solution in operational and patient pathway terms.
Option 4.3 – New Build Day Surgery and Endoscopy on Ward 11
This option was discounted due to the factors discussed at Option 3.1 above.
Option 5.1 – Renal to BTS
Although this option was fully risk assessed (see appendix) it was recognised that this option
would require the use of the whole BTS Building. It was recognised that NHS Highland do not
own the whole building and noted in the risk register that this gave rise to a legal risk which
could significantly delay the project. Given the results forthcoming from other options in terms
of the overall appraisal process, it was decided not to proceed with this particular option.
Option 5.2 – Renal to BTS with Satellite
Although it was recognised that this option differed from the above in that NHS Highland
intended to use only the parts of the BTS Building in their ownership, it was felt that the risks
around other ownership within the building increased the risks to the option to such a degree
as to discount it.
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Option 5.3 Renal to Ward 11
This option was discounted due to the factors discussed at Option 3.1 above.
Option 5.4 – Refurbish Renal with Satellite
This option is the emerging Preferred Option along with 4.1 for Day Surgery and Endoscopy.
The option has been full appraised as part of the risk workshop.
NHS Highland are aware of the risks surrounding the preferred satellite location which forms
part of the Board’s PPP facility at Invergordon – these are noted in the risk register and
discussions are already underway with the Invergordon PPP provider in order to integrate this
aspect into the overall project.
The issues around the PPP provider are being set off against the advantages that this option
represents both in terms of maximising the use of the existing estate and in promoting the
shift in the balance of care.
It should be noted that, although negotiation with the current PPP Provider is the preferred
way forward for this solution, it would be possible to deliver services in Invergordon by
constructing a new facility (potentially a modular facility) on land owned by NHSH adjacent to
the PPP facility. This is not seen as the preferred outcome however, therefore discussions
continue with the Provider in order that the existing facility can be utilised.
Do Nothing
The “Do Nothing” option was fully assessed by the Project Team. In terms of risks, the
appended Risk Register shows how disadvantageous not proceeding with this project would
be.
The operational risks and issues in terms of HAI, increased revenue, inability to meet targets,
inability to meet patient needs and continuing shortage of space paint a compelling picture for
the need to implement one of the other options rather than let the current situation persist.
3.7.5 The Cost of Risk
The financial risks associated with the preferred option are noted in Section 4.2.1.6 where the
share of risk between the PSCP and NHS Highland is articulated.
All of the options discussed above have undergone full appraisal and assessment with the
figures for Optimism Bias including for any generic financial risk that may be present.
3.8
Sensitivity Analysis
3.8.1
Sensitivity Testing
In order to test the robustness of the results of the benefits appraisal it is necessary to assess
the sensitivity of the ranking of the scores to changes in key variables and assumptions.
This provides an indication as to the elements of the evaluation that are critical in influencing
the outcome. As such it is often of benefit to cross reference these features to the key project
risks and to the development of the related management strategy. Further work has been
undertaken by way of sensitivity analysis to evaluate what the ranking might be if some of the
weights and / or scores were changed. A range of sensitivities were applied to the benefits
scores, namely:


Equal weighting applied to all criteria
Excluding benefit scores for top ranked criteria
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
Altering the scores of the criterion with the greatest scoring range so that all options
score the highest value or lowest.
The sensitivity tests detailed above have been applied to the baseline benefit scores outlined
above; the results of which are shown below:
Table 3.8.a: Results of Sensitivity Analysis
Do
Nothing
Sensitivity Test
Option 4.1
and 5.4
Option 4.2
and 5.4
Option 1a
Baseline scores
365
722
718
710
Rank
9
2
1
6
Equal weighted applied to all criteria*
553
910
906
913
Rank
9
3
4
2
Excluding benefit scores for top ranked
criteria**
224
290
290
292
Rank
9
3
4
2
Altering the scores of criterion with greatest
range – max scores***
425
724
722
712
Rank
9
2
3
4
Altering the scores of criterion with greatest
range – min scores****
365
664
662
652
Rank
9
2
3
4
From the analysis above indicates that none of the sensitivity tests applied alter the overall
ranking of options from the baseline position demonstrating the robustness of the results.
*
**
***
****
Equal Weight of 20 given to all criteria
All Criteria given a 20 weight removed
Criteria 5: ‘Improves the quality of the physical environment and fitness for purpose of
all new/redesigned facilities’ has the greatest scoring range at a 58 point spread so
all Options scored with a 4 for Criteria 5 to ‘max score’
Criteria 5: ‘Improves the quality of the physical environment and fitness for purpose of
all new/redesigned facilities’ has the greatest scoring range at a 58 point spread so
all Options scored with a 1 for Criteria 5 to ‘min score’
Further details of Sensitivity Analysis of altering Capital and Property Costs of each shown
are shown in the Financial Case 5.4
3.9
Preferred Solution
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This section describes the preferred solution and explains the key factors from the appraisal
process that supports its selection. The key features and benefits of the preferred option are
also highlighted.
3.9.1 Development of Combinations
As outlined in 3.5 above a key feature of the Project is the fact that its scope encompasses
three different clinical services i.e. Day Surgery, Endoscopy and Renal Services. As a result
any Preferred Solution must satisfy the requirements of these services. The process of
identifying a Preferred Solution must therefore be based upon a range of combinations of Day
Surgery, Endoscopy and Renal Services options.
In developing these combinations the following assumptions were made,

The 7th Floor is the only viable decant space within Raigmore and

The BTS Building will be available.
The table below seeks to identify those options which are possible to provide e. g.

Option 2.1- Day Surgery Refurbishment in Raigmore, cannot be combined with
Option 3.1-Endoscopy in Wd 11 ,as they require the same decant space to complete
each option;

Option 2.1- Day Surgery Refurbishment in Raigmore can be combined with Option
3.3 New Build Endoscopy as they are providing different services;

Option 5.3 Renal in Wd 11 cannot be combined with Option 5.1 Renal in BTS as they
are providing the same service.
Table 3.9 a Combinations of Options
The key used in the table below is as follows:-
As explained in 3.6 above any combination containing the BTS building was excluded. The
following short list of combinations therefore remained
Table 3.9 b Short List of Combinations of Options
Combination
of
Description
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Options
Option 1a
New Build all Day Services
Options 2.1, 3.3,
5.4
Options 2.2, 3.3,
5.4
Day Surgery Refurbishment in Raigmore, New Build Endoscopy,
Refurb Renal and Satellite
New Build Day Surgery out with Raigmore, Endoscopy in Children’s
Ward, Refurb Renal and Satellite
New Build Day Surgery out with Raigmore, Endoscopy in Children’s
Ward, Refurb Renal and Satellite
New Build Day Surgery out with Raigmore, New Build Endoscopy,
Refurb Renal and Satellite
Options 4.1, 5.4
Single Storey Day Surgery and Endoscopy, Refurb Renal and Satellite
Options 4.2, 5.4
Two Storey Day Surgery and Endoscopy, Refurb Renal and Satellite
Options 4.3 ,5.4
New Build Day Surgery and Endoscopy on Wd 11 site, Refurb Renal
and Satellite
Do Nothing
Continue with the existing range and level of services
Options 2.2, 3.1,
5.4
Options 2.2, 3.2,
5.4
It was felt that it would be prudent to include Option 1a to allow a comparison with the original
New Build Option and to demonstrate the benefits of the work which had been carried out in
reviewing the clinical activity data and population projections, which had resulted in a reduced
footprint.
Given the very close scores of the top two ranked Day Surgery and Endoscopy options, the
key issues associated with highlighting a Preferred Solution are

the strengths and weaknesses of whether to have, Option 4.1, (single storey) Option
4.2, a two storey development; and then towards Day Surgery and Endoscopy Unit
the site for both options is the area opposite the Maternity Unit; and

Realising Option 5.4 through the identification of the optimal location for the satellite
dialysis unit (Invergordon or Dingwall) and the areas within Raigmore that would be
suitable for delivering the main renal service with refurbished space.
It was decided to proceed with the following short list of combinations of options
Combination
Options
Options 4.1, 5.4
Options 4.2, 5.4
Option 1a
Do nothing
of
Description
Single Storey Day Surgery and Endoscopy, Renal Refurb and
Satellite
Two Storey Day Surgery and Endoscopy, Renal Refurb and
Satellite
New Build all Day Services exc. Ophthalmology
Continue with the existing range and level of services
Summary of Financial Appraisal of Combination of Options
The outcome of the economic appraisal is summarised below, it has been assumed that the
schemes have the same lifetimes. The table below summarises the results of the economic
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evaluation and compares the results to the benefits appraisal outcome and also the financial
appraisal.
Table 5.3.1 Economic Appraisal Results
NPV
Ranking
000's
EAC
Ranking
000's
Do Nothing
165,478
1
7,402
1
Option 1a
197,264
4
8,824
4
Option 4.1 and 5.4
191,470
2
8,565
2
Option 4.2 and 5.4
195,630
3
8,751
3
The economic appraisal demonstrates a close relationship in outcomes in all but “do nothing”
option which is for the most part ignored due to its inability to deliver any meaningful result
against the project objectives. Option 4.1 and 5.4 is economically the preferred option.
Combining the economic result with the non financial outcomes generates the following tables
and results:
Table 5.3.2 Economic Appraisal Results
Non Financial
Benefit Score
(NFBS)
NF Ranking
NPV/NFBS
Ranking
Do Nothing
365
4
453
4
Option 1a
710
1
278
2
Option 4.1 and 5.4
697
2
275
1
Option 4.2 and 5.4
690
3
284
3
Option 1a is the highest ranked option non-financially, exceeding option 4.1/ 5.4 by 13 points
representing a very small percentage difference.
Table 5.3.3 Economic Appraisal Cost per Benefit Point
Cost Per Benefit
Point (£)
Ranking
Do Nothing
20.28
4
Option 1a
12.43
2
Option 4.1 and 5.4
12.29
1
Option 4.2 and 5.4
12.68
3
It is not surprising that Option 1a is ranked so close to the 1 st ranked option – as it generated
the highest non-financial rating and was in previous iterations of this case the preferred way
forward. The marginality of the outcomes has been considered in depth by the Board and
while the outcome is marginal it is felt that further benefits can be factored into the analysis,
these still to be valued.
3.9.2 Selection of Preferred Solution
It was felt that it would be prudent to include Option 1a to allow a comparison with the original
New Build Option and to demonstrate the benefits of the work which had been carried out in
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reviewing the clinical activity data and population projections, which had resulted in a reduced
footprint.
Given the very close scores of the top two ranked Day Surgery and Endoscopy options, the
key issues associated with highlighting a Preferred Solution are

the strengths and weaknesses of whether to have, Option 4.1, (single storey) Option
4.2, a two storey development; and then towards Day Surgery and Endoscopy Unit
the site for both options is the area opposite the Maternity Unit; and

Realising Option 5.4 through the identification of the optimal location for the satellite
dialysis unit (Invergordon or Dingwall) and the areas within Raigmore that would be
suitable for delivering the main renal service with refurbished space.
It was decided to proceed with the following short list of combinations of options
Combination
Options
of
Options 4.1, 5.4
Options 4.2, 5.4
Option 1a
Do nothing
Description
Single Storey Day Surgery and Endoscopy, Renal Refurb and Satellite
Two Storey Day Surgery and Endoscopy, Renal Refurb and Satellite
New Build all Day Services exc. Ophthalmology
Continue with the existing range and level of services
Day Surgery and Endoscopy Services: Option 4.1 or 4.2
The Design Team considered in detail the relative strengths of both these options. In doing
so it is clear that in return for the level of investment required to implement either option the
benchmark of delivering the optimum level of clinical benefit to patients and staff should be
the key differentiating factor.
In applying this measure the following benefits of 4.1 have been identified:







Optimises patient flow and patient journey
Reduces the number of “hand-offs”
Creates opportunities for integration of Day Surgery & Endoscopy staff/ patient
journeys
Has the potential to reduce staff revenue costs through appropriate shared service
planning
Reduces duplication of space/areas between Day Surgery & Endoscopy
Reduces vertical travel distances for staff and patients pre and post-procedure
Facilitates the development of a more integrated model of care
Consequently the Project Team recommended that Option 4.1 a single storey Day Surgery
and Endoscopy Unit should form part of the Preferred Solution
Renal Services Option 5.4
Although the short-medium term capacity for dialysis at Raigmore is 17 stations, taking a
medium-long term view based upon future activity projections a 25 station Renal Unit will be
required. The Design Team reviewed the available space that would be available once the
Endoscopy Unit is vacated and have concluded that it cannot accommodate a 25 station
Haemodialysis Unit.
The Design Team have carried out further work aimed at identifying further locations where a
25 station dialysis unit could be provided in refurbished accommodation at Raigmore.
In order to maintain the integrity of the overall process and the Option Appraisal in particular it
is clear that any proposed solutions must be within the parameters of options which have
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already been scored. Consequently no new options have been generated as the Design
Team have remained within the parameters of the descriptions of Options 5.4 and Option 1.a
i.e.
5.4: The Split Site (Refurbishment) Raigmore/ Invergordon Renal Model Develop a
“satellite” dialysis unit reducing the overall “satellite” dialysis requirement at
Raigmore. Deliver the Raigmore Dialysis from the existing unit/refurbished space
within existing estate at Raigmore.
1.a: New Build Day Services Centre with revised Day Surgery Theatre and Endoscopy
Capacity and Renal Services excluding Ophthalmology
The following Renal solutions together with reference to the Original Options are shown below
Possible solution
New Build (17 station) with Option 4.1 and 10 Station Satellite
Original Option
1.a
New Build (25 station) with Option 4.1 and 10 Station Satellite
1a
Endo/Children's Refurb (17 station) with 10 Station Satellite
5.4
7th Floor Refurb. (17 station) with 10 Station Satellite
5.4
7th Floor Refurb. (25 station) with 10 Station Satellite
5.4
In common with the approach used to determine the Preferred Day Surgery /Endoscopy
solution the Design Team and Renal Staff considered in detail the relative strengths of each
potential solution. In doing so, it is clear that in return for the level of investment required to
implement either option the benchmark of delivering the optimum level of clinical benefit to
patients and staff should be the key differentiating factor.
The solution favoured by the Renal Staff is a refurbishment of accommodation on the 7th
Floor of Raigmore (17 or 25 station) with 10 Station Satellite
The following benefits of using the 7th Floor have been identified:












Facilitates the development of a more integrated model of care
Optimises patient flows and the patient journey
Reduces the number of “hand-offs”
Improves communication between all members of the multi-disciplinary team
Very close proximity to patients requiring inpatient (acute) dialysis
Potential to reduce revenue costs
Improved patient dignity
Potential to improve productivity
Potential to improve staff motivation and therefore staff retention
Creates better training opportunities
Potential to increase hospital-wide seminar and meeting space
Creates an opportunity to upgrade existing hospital fabric.
Description of Preferred Solution
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The Project Board at its meeting on 25th August 2010 decided that the Preferred Solution for
Renal Services should be a refurbishment of accommodation on the 7th Floor of Raigmore
(17 stations with capacity for up to 25 stations in line with long term activity projections) with a
10 Station Satellite in Invergordon.
The overall Preferred Combination of options for the project is therefore
Renal Services
Option 5.4: Refurbishment of accommodation on the 7th Floor of Raigmore (17stations with
capacity for up to 25 stations in line with long term activity projections) with 10 Station
Satellite in Invergordon.
Day Surgery and Endoscopy Services
Option 4.1: A Single Storey Day Surgery and Endoscopy Unit on the Raigmore Site.
The main advantages of this Preferred Solution is that




It represents a shift in the balance of care for renal Services in particular with the
development of a satellite unit at Invergordon. In addition the development of a
dedicated day surgery and endoscopy unit facilitates and enhances the move to
same day care
Makes effective use of the NHS Highland existing estate through the refurbishment of
the 7th Floor and the existing Renal Unit at Raigmore Hospital
Develops new models of care through the introduction of revised care pathways in
the Day Surgery and Endoscopy Unit at Raigmore Hospital
Provides the catalyst for the development of cash and non cash releasing benefits in
the short to medium term
Key Features of the Preferred Combination of Options
The key features and anticipated benefits of the Preferred Combination of Options are
summarised below:
Renal Satellite Unit
Renal Refurb on 7th Floor Raigmore
Single Storey Day Surgery
and Endoscopy Unit on the
Raigmore Site
Improves access to health
services through supporting a
Shift in the Balance of Care
Supports new models of care
Facilitates the development
of a more integrated model
of care
Optimises patient flows and
the patient journey
Reduces the number of
“hand-offs”
Optimises patient flow and
patient journey
Improves the patient pathway
& journey
Improves quality of care
Improves
communication
between all members of the
multi-disciplinary team
Improves the clinical
environment
Very close proximity to
patients requiring inpatient
(acute) dialysis
Potential to reduce revenue
costs
Improves privacy & dignity
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Reduces the number of
“hand-offs”
Creates opportunities for
integration of Day Surgery &
Endoscopy staff/ patient
journeys
Has the potential to reduce
staff revenue costs through
appropriate shared service
planning
Reduces duplication of
space/areas between Day
Surgery & Endoscopy
Reduces vertical travel
distances for staff and
Makes efficient use of
existing estate
Improved patient dignity
Enables implementation of
local & national strategy
Potential
to
improve
productivity
Potential to improve staff
motivation and therefore
staff retention
Creates
better
training
opportunities
Potential
to
increase
hospital-wide seminar and
meeting space
patients pre and postprocedure
Facilitates the development of
a more integrated model of
care
Potential Future Benefits
All the immediate direct revenue and capital benefits are detailed in the Financial Case.
However there are a number of different initiatives which will provide the foundation of an on
going process which will augment the immediate direct revenue and capital benefits.
New Ways of Working



Sharing of staff between endoscopy and DSU (Reduced “double running”)
 Pre-operatively
 During recovery phase
 In support of scope decontamination
Effective pre-admission assessment (Reduced cost of cancellations/”down time”)
Ability to plan for 100% elective utilisation (Increased throughput, reduced cost/case)
Improved/More Efficient Estate


Reduced infection rate (Antibiotics, length of stay, etc)
Reduced re-admission rate.
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4.0 The Commercial Case:
4.1 Agreed Scope & Services
As noted in Section 3.0 above, the agreed Scope and Services to be provided through this
project are as detailed in the Preferred Solution. This scope is as follows: A single storey Day Surgery and Endoscopy Unit to be built at Raigmore together with
a Renal Facility Utilising the 7th Floor at Raigmore, the existing renal Department and a
Renal Satellite Facility at Invergordon Hospital.
4.2 Agreed Risk Allocation
4.2.1 Risk Assessment through the OBC Process
Throughout the process to compile this OBC, from its earliest iterations, NHS Highland have
ensured that the potential risks, in strategic and specific terms are being identified, addressed
and mitigated against.
4.2.1.1 Board Risk Exercises
During the inception of this project (as previously reported) NHS Highland undertook strategic
risk identification exercises on risks with financial implications and those with no financial
implications.
To illustrate continuity through to this OBC, these exercises are noted in the tables below.
Risks with financial implications
Risk
Risk Management
Design & Construction
Capital cost of project greater than expected.
Experienced project & design teams.
Delay in obtaining planning permission
Main risk is lack of plans with traffic
management. Plans being developed.
Planning permission refused
Close liaison with Planning Department.
Conditions imposed by planning authority
Close liaison with Planning Department.
Facility not fit for purpose
Extensive stakeholder consultation &
involvement.
Facility does not meet design life expectancy
Extensive stakeholder consultation &
involvement. Experienced design team.
Change in design due to change in health
design guidance –SHTM’s & HDL’s.
Flexibility built in.
Change in design due to general/statutory
requirements
Flexibility built in.
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Pre Construction
Additional costs due to problems with site
conditions
Already have considerable knowledge of site
conditions.
Delay in infrastructure improvements
Project team to improve infrastructure on site
formed & plans being developed.
Service
Commissioning time overrun re equipment &
building
Project management & close liaison with
suppliers & appointed contractor.
Design & Construction
Change in service specification/need after
design agreed
Risks with non financial implications
Risk
Project management. Future proofing.
Risk Management
Waiting Times extend with increasing
demand and limited capacity
Low risk so strategy not identified at this
stage.
Failure to deliver project/service within
budget & time
Experienced project & design teams. Working
with service users & finance colleagues.
Early warning to Board members to develop
contingency plans.
Missing the opportunities to develop &
enhance the range of day case activity to
the level of best practice.
Low risk so strategy not identified at this
stage.
Difficulties in recruiting/retaining staff who
are keen to upskill and take forward
technological advancements
Low risk so strategy not identified at this
stage.
Industrial relations issues re terms &
conditions
Low risk so strategy not identified at this
stage.
These previous exercises were revalidated and expanded upon through the Risk Workshop,
detailed at 3.7 above, which sough to build a comprehensive picture of the risks associated
with each of the options.
This Options Risk Exercise is noted at 3.7 above and the Risk Matrix produced is appended
to this OBC at Appendix Three.
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4.2.1.2 The Risk Management Process through the PSCP
One of the positive features of procurement of this project through the NHS Framework for
Scotland is the ability to bring the PSCP into the process earlier. This assists in ensuring that
the Business Case contains robust information around both price and risk apportionment.
At the appointment of the PSCP and from that through the process of both agreeing a Target
Price and finalising this OBC a rigorous risk management regime has been commenced and
will be developed through the OBC.
This process has been invaluable in ensuring that the risk identification, management and
apportionment has been understood and agreed for the Preferred Solution contained in this
OBC.
The process adhered to is discussed below.
4.2.1.3 The Risk Register
The process has been facilitated through a regular series of workshops which have included
stakeholders drawn from the Board’s project team, their advisors and the PSCP and their
team. All of the risks identified and the development of a strategy to mitigate have been
captured on a “Joint Risk Register” template.
Effectively, NHS Highland and Morrison Healthcare as the PSCP act as joint owners of the
Joint Project Risk Register for the Project.
The starting point for the Risk Register template was the Health Facilities Scotland template
which already included many generic risks which were found to pertinent, these were then
supplanted (following workshops) with Project Specific Risks.
As the register was built through the workshops, the joint team progressively looked at the
listing of risks, then original scoring and the identified mitigation factors before then reevaluating the scoring.
The Joint Project Risk Register incorporates all risks associated with the various aspects of
the project i.e. Land Purchase/ Design/Construction/Business/ Clinical/Operational/
Staffing/Equipment Risks.
The Joint Risk register is appended to this OBC at Appendix Six. It details the number and
frequency of the Risk Workshops that have been held thus far, together with the attendees of
each workshop. Beyond the Risk Register itself, it also details the Quality Assessment
Guidelines and the Risk Action Plan.
4.2.1.4 Risk Owner
During the workshops, identified risks are assigned to either NHS Highland or the PSCP, this
is on the basis of the party that is best placed to assume and deal with the risk.
Where risks might be seen as a shared risk, these have been separately identified as both
and NHS Highland risk and as a PSCP risk in order that there is no appearance of the risk
sitting with a single party.
4.2.1.5 Risk Action Plans
Risk Action Plans have been prepared for all High Priority Risks (Red) using the pro forma
included in the Risk Action Plan Worksheet as noted earlier, this is included in the overall Risk
Register.
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The Risk Action Plan identifies:



The risk owner and person responsible for the risk;
Mitigation measures that need to be put in place;
Any other other actions that could be taken if the risk occur.
4.2.1.6 Risk Quantification
Each of the risks identified were appraised to determine their financial impact upon the
project. This was based on a percentage of costs applied to both the probability and impact
of the risk and produced a financial allocation of the risk that was deemed by both parties to
be ultimately acceptable. Again, this will be fully developed through the FBC stages.
The most current Joint Risk Register can be found at Appendix Six of this OBC,
4.3 Key Contractual Arrangements
Beyond the need to negotiate with the Service Provider on the Current PPP Facility at
Invergordon (Standard NHS Form of PPP Contract – Change Request provisions), the
Preferred Solution is being procured under the NHS Framework for Scotland. This
Framework is founded on Collaborative Working principles and the NEC3 form of contract is
used to support these principles.
Following the SGHD’s methodology for tendering work through the new Framework for
Scotland, NHS Highland has appointed a Principal Supply Chain Partner (PSCP), Morrison
Healthcare, to work with the Board to finalise design, work up the target cost for the scheme
and to construct the building.
This work has been ongoing and this Supplementary Outline Business Case not only
represents the further work carried out by the Board on this project since OBC but it also
reflects the results of this collaborative approach between the Board and the PSCP in defining
the scope and financial envelope of the project.
As noted above, the mechanism for ensuring that this partnership ethos is carried through to
the construction of the new facility is through the use of the NEC3 form of contract. The main
principles of this procurement methodology are outlined below.
4.3.1
Open book philosophy:
A key principle of the NEC3 Option C contract is the payment of ‘Defined Cost’ and
an open book accounting philosophy. These require a robust, reliable and
transparent system to record staff time and manage the invoicing process. This
allows the Cost Advisor not only to identify costs but also to establish that the costs
have been properly expended on the project, and that they are allowable under the
NEC3 Option C contract as defined under the ‘schedule of cost components’
Project costs must be referenced to items on the activity schedules with detail added
against 5 main headings of; labour, plant, materials, sub contractors and
preliminaries. Orders, deliveries, invoices for payment, external plant hires and subcontracts also have to be cross-checked against Goods Received Notes.
The target price is key to the cost operation of the contract and is set during the preconstruction phase. This process concludes when the PSCP’s proposals are
completed for costing and the risk register has been agreed. The target price costing
is made up of the following elements:
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Within the NEC 3 option C contract there is
provision to adjust the target price (upwards
and downwards) via the compensation event
process.
4.3.2
Contractors Overheads & Profit
Contractor’s share percentage and share range
Within clause 53 of the NEC 3 contract, the pain share/ gain share payment
mechanism is set-out. This clause requires to be read in conjunction with Contract
Data part 1 which defines the share percentages and share ranges. The table below
outlines the share ranges on Frameworks Scotland:
4.3.3
>100%
 Contractor takes 100%
of the Pain
100%
 Target Price
95%>100%
 Contractor & Employer
share the gain 50:50
<95%
 Employer takes 100% of
the Gain below the 95%
The key benefit of the introduction of the target price with a pain
share / gain share mechanism is the incentivisation on the team
and PSCP to control cost.
Priced Activity Schedule:
The activity schedule is defined in Clause 11.2(20). Clause 54.1 states that
‘information in the activity schedule is not works or site information’. The activity
schedule under NEC 3 option C is provided by the PSCP in contract data part 2 as
part of the pre-construction phase conclusion.
The activity schedule gives a breakdown of the work to be done under the contract
and this covers the entire contract price. A key interface within NEC 3 is that the
activity schedule must be related to the accepted programme as defined under
Clause 31.4. The principle objective of having the activity schedule and accepted
programme linked under NEC 3 option C is not to assess the contractor’s payments
(these are made on defined cost), but to assist in the assessment of compensation
events and contractors share.
4.3.4
Defined Costs:
Defined cost is outlined in Clause 11.2(23) and is made of up 3 key elements;
1. The amount of payments due to sub-contractors for work which is
subcontracted without taking account of amounts deducted for; retentions,
payments to employer for failure to meet key dates, correction of defects after
completion, payments to others and supply of equipment etc.
2. The cost of components in the Schedule of Cost Components for other work
3. Less, Disallowed cost (as defined under Clause 11.2(25))
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4.3.5
Recording and Collation of costs information:
Clause 52.2 requires the PSCP to keep records of:




Accounts of payments of Defined Costs
Proof of payments being made
Communications about and assessments of compensation events for
Subcontractors
Other records required by the works information
The PSCP will ensure that the Cost Advisor has full and unrestricted access to
accounts and records that are required to be maintained in accordance with Clause
52.3.
4.3.6
Compensation events and their application:
Clause 60.1 details 19 compensation events for which the PSCP is entitled to
compensation if they occur. The object of the NEC 3 contract is to ensure that all
compensation events are listed in one place, expressed clearly to avoid disagreement
and to allocate the events in line with modern risk allocation principles.
An important aspect of the compensation event (CE) process is that both the Project
Manager and PSCP are required to notify them. The Project Manager raises C.E’s
for instructions or changing decisions. The PSCP notifies a CE if he believes that the
event is a compensation event or if the Project Manager has not notified the PSCP.
Once compensation event notifications are accepted by the Project Manager,
quotations are provided in accordance with Clause 62 and submitted for
consideration. These quotations cover cost and time and must be linked to the
accepted programme.
The Project Manager makes the assessment in accordance with Clause 63 or 64 and
they are then implemented in accordance with Clause 65. The key to the entire
process within NEC3 is that the process has time constraints to ensure that decisions
are made, preventing the process dragging on, allowing the Project to move forward
without protracted negotiations. The compensation event process can be simply
defined as per the diagram below:
4.4 Implementation Timescales
NHS Highland has been, in conjunction with the appointed PSCP, examining programming
issues in order to establish a realistic and achievable programme for the project.
The main project programme is included in this OBC at Appendix Seven.
For ease of reference however, the key milestones for the delivery of this project are outlined
below: -
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










Submit OBC to NHSH Board
Submit OBC to CIG
CIG Meeting
Approval of OBC
Finalise Target Cost
Submit FBC to NHS Board
Submit FBC to CIG
CIG Meeting
Approval of FBC
Start on Site
Complete Construction
2nd November 2010
16th November 2010
14th December 2010
13th January 2011
24th December 2010
6th February 2011
8th February 2011
8th March 2011
1st April 2011
July 2011
December 2012
4.5 Accountancy Treatment
The Accounting Treatment for this project shall be in accordance with the rules relating to all
of NHS Highland’s assets.
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5.0 The Financial Case
5.1 Potential Capital Requirement
In conjunction with their professional advisors, NHS has prepared the capital costs based on
an appraisal of the capital requirements of each option derived from draft schedules of
accommodation.
Table 5.1.1: Capital Cost Summary - £000
Capital Costs as per OB1
Forms
Option - Do
nothing
Option 1a
Options 4.1
and 5.4
Options 4.2
and 5.4
£'s
£'s
£'s
£'s
Works Cost Total
Fees
Non Works Costs (incl Sunk Costs)
Equipment (Board supply & Fix)
Planning/Design Risk Contingency
2,200,000
Incl
incl
Incl
incl
15,040,130
2,481,621
1,315,504
1,723,381
376,003
13,569,705
2,310,819
1,315,504
1,723,381
446,979
14,812,788
2,457,033
1,315,504
1,723,381
475,399
Sub Total - excl VAT & Opt Bias
2,200,000
20,936,640
19,366,388
20,784,105
As OB1 Forms
Notes:
a) Capital Costs for the options have been provided by the PSCP, except for the do
nothing/minimum provided by the Board.
b) Details of the Costs are shown in the respective OB1 Forms
c) Do nothing capital reflects the provision of endoscopy washers and boiler works as
provided by the Board
d) Costs stated at midpoint of construction which is end Q2 2011
e) Group 2-4 Equipment costs (include IM&T) have been estimated by the Board
f) Contractor (PSCP) and Professional Advisors (PSCs) fees included based on
estimated rates for a Frameworks Scotland project, each subject to ongoing
benchmarking and testing for vfm.
g) Premises will be designed to ensure the appropriate BREEAM ratings for new build
and refurbishment are achieved - an allowance for associated costs has been
included
h) Construction contingency estimate varies for each component of the options
depending on PSCPs opinion of the construction risk.
i) The satellite renal component of the construction costs requires special attention as
the preferred way forward is to construct this within existing an existing PFI building
with 20 years of the concession remaining. The costs for this are presented as part
of the overall works costs for the purposes of OBC and will be further explored at
FBC.
j) Refurbishment of existing renal accommodation is included in capital costs for
Options (4.1 & 5.4) and (4.1 & 5.4)
k) VAT is added at 20% with the following elements of cost being classed as
recoverable:
a.
b.
c.
d.
l)
PSCP Design Team fees
PSCP Overhead & Profit
PSC Cost Advisor, Supervisor and CDM
Survey Fees
Allowance has been made for redirection of the electricity supply for each new build
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m) Optimism bias has been included and aligned with construction risk to avoid
duplication
n) Minimal site costs have been included, as no abnormals known. No ground
investigations have been carried out. Optimism bias is deemed to capture unknowns
a. Optimism Bias
Optimism bias is the demonstrated systematic tendency for appraisers to be over optimistic
about key project parameters. In assessing the likely capital costs of the options we have
adjusted the above figures to reflect the likely impact of optimism bias.
The two main causes of optimism bias in estimating capital costs are:


poor definition of the scope and objectives of projects in the business case due to
poor identification of stakeholder requirements, resulting in the omission of costs at
the initial project costing stage, and
poor project management of projects during implementation, so that schedules are
not adhered to and risks are not mitigated.
These factors are distinct from the contingencies built into the capital costs as assessed by
the Board’s PSCP and other advisers which cover specific planning/design risk associated
with the brief as it stands at OBC.
For the purposes of the exercise, we have used the latest HM Treasury guidance in
assessing the level of mitigated optimism bias to be applied to the capital costs as outlined in
section above. As such we have utilised a range of health specific features in assessing the
following factors:

Setting the upper bound for optimism bias to be applied to the initial capital costs, and
Determining the extent of mitigation of the upper bound in light of a range of specific
factors.
Full details of these assessments are provided in Appendix A and are provided in the format
prescribed within the HM Treasury supplementary guidance.
b. Setting the Upper Bound
In setting the upper bound a range of features have been assessed to determine the initial
level of optimism bias to be applied, these include:




build complexity;
location;
scope of scheme;
extent of any service changes, and
likely Gateway Review risk category
A summary of the upper bound assessment is provided in the table below.
Key features in setting the upper bound include:

Relatively short time period;
New build – Greenfield site on all options;
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Table 5.1.2: Calculation of Optimism Bias Upper Bound Contributory Factor
Do
Nothing
Option 1a
Option 4.1
Option 4.2
Option
5.4
Build Complexity
3.00%
3.00%
3.00%
3.00%
4.50%
Location
6.00%
5.00%
5.00%
5.00%
16.00%
Scope of Scheme
Extent of Service
Changes
7.50%
9.50%
9.50%
9.50%
8.50%
10.00%
10.00%
10.00%
10.00%
10.00%
Gateway RPA Category
2.00%
2.00%
2.00%
2.00%
2.00%
Upper Bound
28.50%
29.50%
29.50%
29.50%
41.00%
Table 5.1.2
The higher rate for 5.4 is reflective of the refurbishment aspects of these options.
c. Mitigation of Upper Bound
Although the options vary in terms of their construction, scope and complexity, the approach
taken to mitigation focuses on a detailed assessment of the full range of factors set out in the
supplementary guidance for mitigating optimism bias on health and related projects.
The level of remaining optimism bias and the extent to which the upper bound has been
mitigated is summarised in the table below.
Specific key features contributing towards the degree of mitigation for the redevelopment
option include:


detailed scheduling which has been undertaken allowing for good degree of design
work and sign off by stakeholders;
degree of site surveying;
standard design and contract.
Table 5.1.3: Mitigation of Optimism Bias
Table 5.1.3
Do
Nothing
Option 1a
Option 4.1
Option 4.2
Option
5.4
Project specific upper
bound
28.50%
29.50%
29.50%
29.50%
41.00%
Mitigation factor
46.00%
69.50%
69.50%
69.50%
70.50%
Mitigated Upper Bound
15.93%
9.00%
9.00%
9.00%
12.10%
The resulting optimism bias adjustments have been applied to the capital costs for the
purposes of calculating capital charges and in the economic appraisal. In order to obtain the
most accurate refection of Optimism bias each component of the options was reviewed and
the results fed into the capital costs. Therefore, the adjusted capital costs presented below
reflect a combination of 9% and 12.1% for the combined aspects of the two latter options (4.1
and 5.4) and (4.2 and 5.4):
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Table 5.1.4 Capital Costs Including Optimism Bias and VAT - £000
Capital Costs with Optimism
Bias and VAT - Table 5.1.4
Option - Do
nothing
Option 1a
Options 4.1
and 5.4
Options 4.2
and 5.4
As OB1 Forms
Works Cost Total
Fees
Non Works Costs (incl Sunk Costs)
Equipment (Board supply & Fix)
Planning/Design Risk Contingency
£'s
2,200,000
Incl
incl
Incl
incl
£'s
15,040,130
2,481,621
1,315,504
1,723,381
376,003
£'s
13,569,705
2,310,819
1,315,504
1,723,381
446,979
£'s
14,812,788
2,457,033
1,315,504
1,723,381
475,399
Sub Total - excl VAT & Opt Bias
2,200,000
20,936,640
19,366,388
20,784,105
Optimism Bias
Sub Total
350,460
2,550,460
1,884,298
22,820,937
1,958,922
21,325,310
2,083,112
22,867,217
VAT - as per OB1 forms
Total Build Costs - incl VAT
440,000
3,804,762
3,539,797
3,818,936
2,990,460
26,625,700
24,865,108
26,686,153
5.2 Potential Net Effect on prices
The financial model is driven by key assumptions which potentially have a material effect on
the overall operating costs of the new facility, such as;




likely capital costs;
projected capital charges;
revenue costs associated with existing services which are to be maintained, i.e.
baseline costs and
variations in revenue costs (property costs and staff costs) associated with each of
the short-listed options.
a. Costing Methodology
Departmental Cost allowances have not been used in the calculation of the capital cost. As
the project is being procured under Framework Scotland we have sought the expertise of the
PSCP to identify the capital works cost associated with each of the short-listed options. The
PSCP has used the following methodology for each component of the options:
New Build – costs have been estimated from an elemental cost plan which was created in a
previous exercise in Dec 2009 and adjusted for specific changes since to create a cost/m2 for
OBC purposes. The costs have been reviewed by the Board’s independent cost advisor and
aligned with benchmarks of similar projects. The costs have been adjusted to align with the
PSCPs view of construction risk associated with the component to identify a draft Target
Cost.
Refurbishment – costs have been estimated on a cost/m2 for OBC purposes. The costs have
been reviewed by the Board’s independent cost advisor and aligned with benchmarks of
similar projects. The costs have been adjusted to align with the PSCPs view of construction
risk associated with the component to identify a draft Target Cost.
Equipment costs which include IM&T have been separately costed by the Board as noted
above.
b. Revenue Impact
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The purpose of this section is to quantify the revenue costs of each short-listed option.
In order to assess the revenue implications of the current services it was initially necessary to
establish a baseline cost from which any changes could be considered.
c. Baseline Revenue Costs
The table below summarises the 2009/10 budgets for each service / organisation:
As the options relate primarily to property the baseline costs which any movement has been
measured from consists of some minor revenue costs, property costs and capital charges.
The high level assumptions used in the revenue cost model for each of the short-listed
options are set out below.
Table 5.2.1: 2009/10 Budgets - £000
Table 5.2.1
Renal
Day Surgery
Endoscopy
Other
Total
Pay
Non-Pay
Property Costs
Capital Charges
1,936
1,543
0
0
1,132
800
0
0
656
381
0
0
0
0
0
0
3,723
2,724
461
0
Gross Costs
3,478
1,932
1,037
0
6,908
An allocation of Theatre budget has been used to derive the pay and non pay allocation for
day surgery.
d. Key Revenue Assumptions





Price stated at – 2009/10 prices based on budgets
Costs are expressed as annual equivalents for all options.
Minor impact for pay or non-pay costs – as per current 2009/10 budgets.
Revenue costs for waiting list work have been estimated for the do nothing option
based on current workloads and capacity.
The new property costs have been estimated using the costs per sqm for the
following property costs:
-
Heat, Light and Power
Maintenance
Rates
Water and Sewage
Cleaning
e. Capital Charges
The capital charges for each option are based on costs in relation to the options depreciated
over 40 years and the table below indicates that there is a significant capital charge impact
due to the level of capital expenditure undertaken in each of the options. The capital charges
for the do nothing option are as a result of the need to replace hospital boilers and endoscopy
washers if this project does not go ahead.
Table 5.2.2 Impact of Capital charges
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Table 5.2.2
Depreciation
Retained
Total future
f.
Do Nothing
Option 1a
Option 4.1 &
5.4
Option 4.2 &
5.4
105.6
0
105.6
729.1
0
729.1
676.5
0
676.5
719.7
0
719.7
Property Costs
The property costs have been based on the estimates per square metre from the
development (at 2006/07 prices) adjusted to 2009/10 levels for the following:




heat, light & power
rates
maintenance;
water & sewerage
Cleaning costs are based on an estimated hours per week required to clean the building,
undertaken weekdays only which includes allowances for absence cover and cleaning
products.
The costs also include the element of the current property for estate which is retained under
each option.
The resultant property costs for each option are shown below:
Table 5.2.3: Property Cost Impact - £000
Table 5.2.3
Do nothing
Option 1a
Options 4.1 &
5.4
Options 4.2
& 5.4
Portering
56,803
103,074
92,274
97,428
Stores staff
Domestic
Cleaning supplies
Rates
48,390
3,783
101,689
31,844
100,444
20,217
175,870
92,104
17,797
161,265
97,072
19,239
169,965
Water Rates
Estates Maintenance
Heat/Light/Power
Equipment maintenance
Total Property
Impact
26,160
58,068
126,059
40,000
460,951
45,243
167,380
218,017
161,440
1,023,529
562,578
41,486
153,480
199,912
161,440
919,758
458,807
43,724
161,760
210,697
161,440
961,324
500,373
For all options other than the do nothing, the table above shows a significant increase in
property costs compared to current costs. This is as a result of occupying a larger footprint
than is currently occupied. Option 1a has a larger footprint than option 4.1 and 5.4, and
option 4.2 and 5.4 therefore the property costs associated with this option have been adjusted
accordingly. The do nothing column excludes the rental cost of a modular theatre which is
accounted as a saving in table 5.2.4 below.
The equipment relating to Computer and Telephone systems result in an increase to annual
revenue costs. This is reflected in the table below: The total impact on revenue is detailed
below
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Table 5.2.4: Summary Revenue Impact - £000
Do Nothing
Option 1a
Option 4.1 &
5.4
Option 4.2 &
5.4
0
729
677
720
Property costs
461
1,024
920
961
Revenue costs
6,447
6,630
6,602
6,669
Total Costs
6908
8382
8198
8351
Savings (Modular Unit)
0
435
435
435
Savings (Beds)
0
160
160
160
Savings (Capital Charges)
0
106
106
106
6908
774
590
742
Table 5.2.4
Capital Charges
Net Impact
The table above suggests a significant revenue impact under all of the options which is driven
primarily by the level of initial capital expenditure and therefore recurring capital charges. In
addition, there is an increase in property costs associated with occupying additional space.
The savings noted for all options are as follows – the cessation of use of the modular Theatre
with an associated cost saving of £435k and also the saving of £105k capital charges as a
result of not having to replace the existing hospital boilers and endoscopy washers, there is
also the potential to require 10 less beds within the current hospital with an approx saving of
£160k pa.
5.3 Economic Appraisal
As required an economic appraisal has been carried out as part of the option appraisal
process to assess, from an economic perspective, the relative merits of the different options.
A discounted cash flow for each of the options has been undertaken over a maximum of 40
years (plus initial construction period) using a discount rate of 3.5% (for years 0-30) and 3.0%
(for years 30 plus) which is in line with Treasury Green Book guidance. The key elements
used for the appraisal are detailed below:






Capital outlay for each option exclusive of VAT
Lifecycle costs of building and engineering works
Optimism bias adjustment to initial capital costs
Total revenue costs for each option excluding capital charges net of income
Bridging or other nonrecurring costs
Sunk costs are included (although not in line with Treasury Guidance they are applied
consistently)
a. Economic Appraisal Key Assumptions
The key assumptions for the economic appraisal are detailed below:







The base period for the economic appraisal is 2009/10. (Year 0)
All cash flows are at 2009/10 outturn prices.
The appraisal period is 40 years, plus construction period.
Capital costs have been phased based on a model provided by technical advisers.
Optimism bias has been applied as noted above
The first full year for additional revenue costs for property and staffing is assumed to
start in 2012/13.
Renal Services provision at Invergordon PFI is assumed on the basis of a capital
grant (other treatments such as adjustment to the UC will be explored at FBC to
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identify any marginal adjustments around the financial model. These are not
anticipated to increase the UC due to certain benefits that will accrue to the existing
building during construction)
b. Summary of Results
The outcome of the economic appraisal is summarised below, it has been assumed that the
schemes have the same lifetimes. The table below summarises the results of the economic
evaluation and compares the results to the benefits appraisal outcome and also the financial
appraisal.
Table 5.3.1 Economic Appraisal Results
Ranking
EAC
000'
Ranking
Table 5.3.1
NPV
000'
Do Nothing
165,478
2
7,402
2
Option 1a
197,264
4
8,824
4
Option 4.1 and 5.4
191,470
3
8,565
3
Option 4.2 and 5.4
47,170
1
2,110
1
The economic appraisal demonstrates a close relationship in outcomes in all but “do nothing”
option which is for the most part ignored due to its inability to deliver any meaningful result
against the project objectives. Option 4.1 and 5.4 is economically the preferred option.
Combining the economic result with the non financial outcomes generates the following tables
and results:
Table 5.3.2 Economic Appraisal Results
NF Ranking
NPV/NFBS
Ranking
Table: 5.3.2
Non Financial
Benefit Score
(NFBS)
Do Nothing
365
4
453
4
Option 1a
710
1
278
3
Option 4.1 and 5.4
697
2
275
2
Option 4.2 and 5.4
690
3
68
1
Option 1a is the highest ranked option non-financially, exceeding option 4.1/5.4 by 13 points
representing a very small percentage difference. On reflection of these outcomes the Project
Team felt that higher weighting could have been given to shifting the balance of care and to
maximising the use of existing estate and resources. However, in keeping with the process
agreed, the scores were retained. Option 1a was also accorded a high non-financial benefits
score because clinical stakeholders in particular felt it was the most closely aligned option to
the original New Build , which had been their preferred way forward for some time.
Table 5.3.3 Economic Appraisal Results
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Table 5.3.3
Cost Per Benefit
Point (£)
Ranking
Do Nothing
20.28
4
Option 1a
12.43
3
Option 4.1 and 5.4
12.29
2
Option 4.2 and 5.4
3.06
1
It is not surprising that Option 1a is ranked so close to the 1st ranked option – as it generated
the highest non-financial rating and was in previous iterations of this case the preferred way
forward. The marginality of the outcomes has been considered in depth by the Board and
while the outcome is on the face of it reasonably close the qualitative benefits of 4.1 and 5.4
is superior due to shifting the balance of care in terms of renal services and by making
significant use of the existing Estate.
5.4 Sensitivity Testing
Switching techniques to assess sensitivity highlights that the option appraisal ranking was
affected by a change in property costs. Sensitivity was applied by analysing the impact of
changes to key assumptions relating to capital and revenue as noted below. The results are
detailed in the table below but to summarise, the ranking of the NPVs for all testing did not
change the preferred option.
Table 5.4.1 Sensitivity Summary NPV - £000
Do Nothing
Option 1a
Option 4.1
& 5.4
Option 4.2
& 5.4
Capital Cost plus 10%
165,729
199,268
193,315
197,609
Capital Cost less 10%
165,228
195,261
189,626
193,651
Property Costs plus 20%
167,358
202,232
195,049
199,371
Property Costs less 20%
163,599
193,885
188,391
192,483
The details of the above tests are contained in Appendix 8 – Financial Information.
5.5 Capital and Revenue Affordability
The financial case considers the affordability analysis for each option is based on the overall
capital and revenue costs. It also presents the anticipated impact of the proposals on the
Board’s Income and Expenditure and Balance Sheet.
The scheme is included within the Board’s Local Delivery Plan. This scheme was previously
identified as a Board priority was allocated to NHS highland for this project. This forms part of
the overall capital funding identified for the scheme, this will be supplemented by the Board’s
formula allocation.
a. Capital Affordability
A summary of the total capital costs and available capital funds (taken from the current capital
plan) for each year of investment is shown below:
Table 5.5.1 Capital Cost Phasing - £000
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Table 5.5.1
Do Nothing
Option 1a
Option 4.1 &
5.4
Option 4.2 &
5.4
2010-11
0
2,556
2,471
2,544
2011-12
2,990
12,692
8,417
9,135
2012-13
0
11,377
13,977
15,008
2,990
26,626
24,865
26,686
Capital
b. Revenue Affordability
The overall revenue impact from pay, non pay and capital charges is set out below and has
been phased over the project period
This confirms that from year 2012/13 the additional revenue requirement will be (assuming a
full year of costs in Yr 1)
Table 5.5.2 Revenue Costs Phasing Annual Affordability - £000
Placing Value on the Benefits:
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
£m
£m
£m
£m
£m
£m
677
920
6,602
8,198
677
920
6,602
8,198
677
920
6,602
8,198
677
920
6,602
8,198
677
920
6,602
8,198
677
920
6,602
8,198
106
106
106
106
106
106
Other (savings & modular)
435
435
435
435
435
435
Bed Savings
160
160
160
160
160
160
6,908
6,908
6,908
6,908
6,908
6,908
7,609
7,609
7,609
7,609
7,609
7,609
589
589
589
589
589
589
Table 5.6.2
Preferred Option
Capital (Capital Charges)
Property Costs
Revenue Pays
Total
Funded by:
Existing Capital Charges
Existing budgets
Total
ADDITIONAL REVENUE
COST REQUIREMENT
The table above presents the currently costed savings. However we must recognise the
potential for other financial savings/benefits associated with the options being explored to
reduce the current affordability gap. Traditionally the benefits are difficult to place a firm
figure upon and a realisation date against each benefit is only an estimate, but work around
these aspects is ongoing. It is important to note that the benefits noted apply to each of the
new options with greater benefit being perceived to option 4.1 and 5.4 due to the added
benefits that could accrue to the single storey alternative. It is noted that the list is not
exhaustive.
It is the Boards intention to seek continuous improvement in the quality and cost of service
delivery and attempt to address this gap through the realisation of other financial benefits to
be accrued through the clinical model which has been identified as the preferred option.
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High/Med/Low
>£25k,<£25k,<£5k
Pursue/Hold
Confidence
level to save
Perceived Potential
Action
100
High
Hold
10
Low
Hold
100
High
Pursue
100
High
Pursue
100
High
Pursue
100
High
Pursue
50
Med
Pursue
100
High
Pursue
100
High
Pursue
100
High
Pursue
100
Med
Pursue
100
High
Pursue
80
High
Pursue
100
High
Pursue
100
High
Pursue
10
Low
Hold
100
High
Pursue
100
High
Pursue
100
Med
Pursue
Reduced infection rate (Anti-biotics, length of stay etc)
75
High
Pursue
Reduced re-admission rate
10
Med
Hold
Income resulting from intro of biomass
50
High
Pursue
Benefits Impact
%age
Capacity Changes/Re-alignments:
Closure of further Inpatient Beds (any property costs
that will be saved – heat, light, power maintenance)
Converting in-patient beds to day case beds (staff,
heat, light power, maint etc) los ?
Heat, light power etc associated with Modular unit
Removal of week-end elective surgical operating costs
(medical, staff, nursing, staff, heat, light, power ,
increasing life of the asset, etc)
Savings in staffing of the modular unit
Ceasing the practice of undertaking elective activity
during emergency surgical sessions (weekend /
evening staff costs, impact on rotas etc)
Managing dialysis patients in a satellite facility rather
than a major acute unit (lower nursing costs)
Managing patients closer to home (impact upon
expenses/mileage claims)
Reducing patient transport services (SAS) costs as a
result of the satellite
Reducing Taxi costs (Dialysis)
Opportunity for income generation from “holiday”
patient dialysis
Improved potential to expand Home Dialysis
New ways of working:
Reducing clinical staff requirements as a result of
improved patient flows and pathways e.g. sharing of
staff between endoscopy and DSU (reduce double
running: pre-op, recovery, in support of scope
decontamination, effective preadmission assessment –
reducing cost of cancellations and down time)
Ability to plan for 100% elective utilisation (increased
throughput and reduced cost/case)
Savings associated with not providing barium and
other studies in imaging department i.e. radiologist,
radiographer, supplies, equipment and maintenance
Reduced portering requirement associated with
transfer to and from imaging department for current
barium studies
Reduced requirement for portering in the ambulatory
component of day surgery i.e. current requirement to
escort patient from an inpatient bed to operating
theatres
Improved availability of staff as a result of a more
integrated renal model of care i.e. Medical / Nursing
staff
Reduced costs of (nurse) training as a result of
integrated renal and dialysis unit
Improved/More Efficient Estate:
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5.6 Potential Impact on the Balance Sheet
The overall balance sheet will increase by £25m (excluding the impact of indexation and in
year depreciation) over the project period. The table below shows the asset movements over
the project period.
Table 5.6.1 Project Balance Sheet - £000
31/03/2010
Existing Land and Building
Value
In year capital expenditure
Assets Under Construction
Asset disposals
Total Relevant Assets
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2,664
2,664
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31/03/2011
31/03/2012
31/03/2013
2,664
2,664
2,664
2,471
8,417
13,977
5,135
11,081
16,641
6.0 The Management Case
6.1 Procurement Strategy
As noted at 4.4 above, The Preferred Solution is being procured under the NHS Framework
for Scotland. This Framework is founded on Collaborative Working principles and the NEC3
form of contract is used to support these principles.
Following the SGHD’s methodology for tendering work through the Framework for Scotland,
NHS Highland has appointed a Primary Supply Chain Partner (PSCP), Morrison Healthcare,
to work with the Board to finalise design, work up the target cost for the scheme and to
construct the building.
This Outline Business Case represents the results of the collaborative approach between the
Board and the PSCP in defining the scope and financial envelope of the project. Further
evidence of this collaborative ethos can be noted at 6.2, below.
6.2 Project Management Arrangements
Since project inception, and through the OBC process to the current stage of the project, NHS
Highland have had in place a Project Governance structure which sought to ensure that there
was a dedicated management focus for the project, visibility and accountability at the highest
levels in the organisation and the involvement of a wide range of stakeholders in the project
process.
This internal project structure is noted below:
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Stakeholders
A Day Services Project Team has been established, reporting to the Project Board, with the
remit of advising the Project Board of the requirements of each service user (including patient
representation). The membership of this group is as follows:
Following the tendering exercise through the NHS Framework for Scotland and the
subsequent appointment of the PSCP, the Project Implementation structure is now as noted
below: -
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6.3 Change Management
In order that patients, staff and other key stakeholders can experience the maximum benefit
from the service improvements associated with the Day Services Centre.
The concept of Change encapsulates a number of different areas
Services
This is a key aspect of the change. The creation of a Day Services Centre will result in
changes to not only the range of services provided but will crucially impact on how some
existing services will be provided. New models of care will be required to respond to the
needs and expectations of patients and staff.
Operational Policies
A full range of new policies and procedures will be required to reflect the new services and
physical environment
Staff Development
Staff will be required to obtain new skills and competencies. In order individual and group
training and development programmes will be put in place to facilitate this aspect of the
change process
Organisational Development
The concept of the Day Services Centre as an organisation must also be recognised by all
key stakeholders. This element of the Change process presents a significant challenge
particularly to the staff involved. The aim would be to remove the demarcation lines between
services although this is not without its difficulties and challenges. However if achieved the
benefits can be considerable.
The implementation of change is an all inclusive development. However in order to ensure
that the processes are co-ordinated it is necessary to identify Change Champions who will
embrace the changes and provide a motivational focus for all staff.
6.4 Benefits Realisation
The Benefits Criteria (as noted at 2.9 above) articulated in the OBC are all desirable
outcomes for the project that are expected to be achieved by the Preferred Solution that is the
subject of this OBC.
As noted at 2.9, the fifteen criteria were identified and designed to be clear and capable of
being consistently applied by the stakeholder group involved in the option appraisal. The
criteria used again noted below for ease of reference:
1. Improves access to health services for all
2. Supports the implementation of new models of care and the wider clinical strategy
3. Improves the patient pathway & patient journey
4. Improves the quality of clinical care including standards and clinical outcomes
5. Improves the quality of the physical environment and fitness for purpose of all new/
re-designed facilities
6. Improves Privacy & Dignity
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7. Supports the retention and recruitment of staff
8. Improves flexibility and efficient use of staff resources
9. Enables the implementation of local and national strategy
10. Planning and tenure issues are minimised
11. Speed of Delivery
12. Transition management
13. Supports the Environmental agenda
14. Makes more efficient use of existing Estate and Property
15. Minimises hospital acquired infections (HAI)
However, a critical factor that will help determine the success of this project in the longer term
will be in ascertaining just how well were the expected benefits realised? In other words, will
NHS Highland not only implement the project within the expected timescales and to budget,
but will the project also achieve the anticipated benefits as outlined above?
In order that these outcomes can be ascertained, the Benefits Criteria must therefore be
capable of being measured and evidenced.
The following outlines how each of the Benefits Criteria above, will be measured and
monitored through the project’s lifetime in order to ensure that a meaningful assessment can
be made of the benefits yielded by the project is available and to benchmark the assessment
criteria themselves so that lessons learnt can be fed back into future projects.
The monitoring and review of achievement in relation to each of these service aims will be
built into the work plans of the management team as appropriate.
Please see below:
No
Benefit Criteria
1
Improves access to health services for
all
2
Supports the implementation of new
models of care and the wider clinical
strategy
3
Improves the patient pathway & patient
journey
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SMART Measures
 Provides services closer to patients
 Reduces waiting times (globally)
 Increases BADS percentage
 Reduces travel distances overall
 Reduces travel inequality
 Improves capacity & throughput
 Separates Emergency & Elective workload
 Improves compliance with regulation e.g.
decontamination
 Enables the reduction of outmoded
techniques e.g. barium enema
 Enables the separation of inpatient and
outpatient activity e.g. dialysis
 Reduces bed numbers overall
Reduces patient length of stay
 Shortened and concise pathway
 Reduced number of “hand-offs”
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4
Improves the quality of clinical care
including standards and clinical
outcomes
5
Improves the quality of the physical
environment and fitness for purpose of
all new/redesigned facilities
6
Improves Privacy & Dignity
7
Supports the retention and recruitment
of staff
8
Improves flexibility and efficient use of
staff resources
9
Enables the implementation of local and
national strategy
10
Planning and tenure issues are
minimised
11
Speed of Delivery
12
Transition management
 Increases lifespan of buildings and
infrastructure by 40 years
 Complies with current guidance re spaces
 Improves natural daylight
 Improves patient experience
 Improves QIS review & score
 Reduces travel distances between clinical
areas
 Provides discrete functional areas e.g.
waiting, changing, interview and discharge
lounge
 Provides “age appropriate” facilities
 Provides quiet/discussion/consultation
spaces in all clinical environments
 Meets all standards re soundproofing
 Provides a healthy and desirable working
environment
 Improves staff satisfaction
 Travel to work is easier
 Increases number of applicants meeting job
specification
 Reduces staff turnover
 Enables improved operating theatre
utilisation
 Enables multi-skilling of staff
 Fully supports the achievement of BADS
targets
 Enables the achievement of waiting times
 Supports a “shift in the balance of care”
 Supports the realisation of “HEAT” targets
 Ease of acquisition
 Ease of contract change
 Minimises impact on programme
 Enables key deliverables within programme
timeframe
 Minimises the need for decanting
 Enables an overall reduction in Carbon
(Facilities)
 Reduces transportation requirements
 Is in line with and wholly supportive of the
NHS Highland Property Strategy
Makes more efficient use of existing
 Minimises the requirement for additional
14
Estate and Property
new buildings
 Maximises use of existing NHS Highland
Estate
 Meets all required criteria
Minimises hospital acquired infections
 Follows Hospital Acquired Infections (HAI)
15
(HAI)
SCRIBE process
 identifies separate and discrete "clean" and
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13
Supports the Environmental agenda
"dirty routes"
6.5 Risk Management
NHS Highland is fully aware of the need to mitigate any risks to this project and have been
instrumental in setting up the appropriate measurements to ensure all risks have been
highlighted, discussed and planned for. The joint risk register can be found in Appendix
Seven, the strategic risks are discussed in Section 2.10, the assessment of risks can be
found in Section 3.7 and the risk allocation can be found in Section 4.2 of this OBC.
6.6 Contract Management
As noted under Section 4.3 ‘Key Contractual Arrangements’ the procurement of this project
has been carried out under the NHS Framework for Scotland. The Contractual aspects of this
are examined in full at that point.
6.7 Post Project Evaluation
6.7.1 Purpose
NHS Highland is aware that in order to assess the impact of the project, an evaluation of
activity and performance must be carried out. This is an essential aid to improving future
project performance, achieving best value for money from public resources, improving
decision-making and learning lessons. Further, sponsors of capital projects in the NHS are
required by the Department of Health, HM Treasury, and the National Audit Office to evaluate
and learn from their projects. This is mandatory for projects with a cost in excess of £1
million.
Business cases for capital projects will not be approved unless post-project evaluation has
been properly planned in advance and suitably incorporated into the Full Business Case.
Therefore NHS Highland has an evaluation framework in place as follows:

A post project evaluation will be carried out no later than 12 months after occupation.

The benefit realisation register detailed in this OBC will be used to assess project
achievement.

Clinical benefits through patient and carer surveys will be carried out and prescribing
trends will be assessed.
6.7.2 Prerequisites for successful evaluation
To ensure maximum pay-off from evaluation, the following criteria are deemed as important:

The evaluation is viewed as an integral part of the project and it is planned for at the
outset. The evaluation will be costed and resourced as part of the project.

There is commitment from senior managers within the organisation.

All key stakeholders are involved in its planning and execution.

Relevant criteria and indicators will be developed to assess project outcomes from
the outset of the project.
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
Mechanisms will be put in place to enable monitoring and measurement of progress.

A learning environment will be fostered to ensure lessons are heeded.

Feedback to Framework Scotland monitoring groups.
6.7.3 The stages of evaluation: when should evaluation be undertaken?
Although evaluation will be carried out continuously throughout the life of a project to identify
opportunities for continuous improvement, evaluation activities will be undertaken at four main
stages:
Stage 1: at the project appraisal stage the scope and cost of the work will be planned out.
This will be summarised in an Evaluation Plan.
Stage 2: progress will be monitored and evaluation of the project outputs will be carried out
on completion of the facility.
Stage 3: there will be an initial post-project evaluation of the service outcomes 6 to 12 months
after the facility has been commissioned.
Stage 4: there will be a follow-up post-project evaluation to assess longer-term service
outcomes two years after the facility has been commissioned.
Beyond this period, outcomes will continue to be monitored. It may be appropriate to draw on
this monitoring information to undertake further evaluation after any market testing or
benchmarking exercise – perhaps at intervals of 5-7 years.
At each of these stages, evaluation will focus on different issues. In the early stages,
emphasis will be on formative issues. In later stages, the main focus will be on summative
or outcome issues.
Formative Evaluation – As the name implies, is evaluation that is carried out during the early
stages of the project before implementation has been completed. It focuses on ‘process’
issues such as decision-making surrounding the planning of the project, the development of
the business case, the management of the procurement process, how the project was
implemented, and progress towards achieving the project objectives.
Summative Evaluation – The main focus of this type of evaluation is on outcome issues. It
is carried out during the operational phase of the project. Summative evaluation builds on the
work done at the formative stage.
It addresses issues such as the extent to which the project has achieved its objectives; how
out-turn costs, benefits, and risks compare against the estimates in the original business
case; the impact of the project on patients and other intended beneficiaries; and lessons
learned from developing and implementing the project.
Table 1: What will be considered in the evaluation plan?
1. A clear view of the objectives and
 Who is the audience for the evaluation?
purpose of the evaluation.
 What are their information needs?
 What decisions will the evaluation
inform?
2. Consideration of the structural context
 What is the baseline situation (status
quo)?
 What are the internal and external
constraints?
 What are the desired outcomes?
3. Inclusion of a comparative element
 Are there plans to conduct a ‘before and
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
4. Coverage of all relevant project impacts
(outcomes and processes)





5. An emphasis on learning

6. Recognition of need for robustness and
objectivity



7. Sound methodology


after’ assessment?
Is it clear what would have happened in
the absence of the project?
Is there a plan to assess immediate,
intermediate and ultimate outcomes?
Does the plan take into account the
processes by which the outcomes are
generated?
Does the plan consider the impact of the
project on patients, staff and other
stakeholders?
What are the lessons?
Is there a plan to disseminate the lessons
learnt?
Is there an action plan to ensure the
lessons are used to inform the project or
future projects?
Is the evaluation team equipped with the
skills and resources to undertake the
evaluation?
Should the evaluation be conducted by
external contractors? What should be
the role of in-house staff?
Are there suitable arrangements to
quality-assure the findings?
What methods of data collection will be
used to undertake the study?
Are the proposed methods appropriate to
meet the objectives of the evaluation?
Factors to consider in judging the importance of evaluation
Likely benefits – Is there scope to feedback any lessons from evaluation into the
improvement of the project? Does the project have the potential to provide useful lessons to
the wider NHS?
Interest – Is the project of major interest to senior managers, policy-makers, ministers, and
the public? Is it likely to attract much media coverage? Are there signs or risks of something
going wrong?
Ignorance and novelty – do we have comprehensive and reliable information about the
performance and results of the project?
Corporate significance – how important is the project to stakeholders? Is it likely to have a
major impact on how services are delivered?
6.7.4 How we will evaluate: some technical considerations
Government recommendation is that the Logical Framework should continue to be used for
evaluation of NHS capital schemes. This is a matrix listing project objectives against
indicators and measures for assessing outcomes. The underlying assumptions and risks are
also considered.
The technical issues arising from application of the Logical Framework include:

the merits and demerits of different data collection methods

the role of different participants in the data collection process
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
sampling methods

sample size

questionnaire design (types of questions, etc)

piloting

how to achieve a satisfactory response rate

security and confidentiality of data

data analysis and report writing
6.7.5 Feedback and dissemination of findings from evaluation
The potential value of an evaluation will only be realised when action is taken on the findings
and recommendations emanating from it. We will require the adoption of processes to ensure
that this happens.
To promote consistency, the content of the evaluation report should, as far as possible,
address the following issues:

Were the project objectives achieved?

Was the project completed on time, within budget, and according to specification?

Are users, patients and other stakeholders satisfied with the project results?

Were the business case forecasts (success criteria) achieved?

Overall success of the project – taking into account all the success criteria and
performance indicators, was the project a success?

Organisation and implementation of project – did we adopt the right processes? In
retrospect, could we have organised and implemented the project better?

What lessons were learned about the way the project was developed and
implemented?

What went well? What did not proceed according to plan?

Project team recommendations – record lessons and insights for posterity. These
may include, for example, changes in procurement practice, delivery, or the
continuation, modification or replacement of the project.
Evaluation results will then be signed off by senior management or at Board level.
The results from the evaluation should generally lead to recommendations for the benefit of
the organisation and wider NHS.
These may include, for example, changes in procurement practice; delivery; or the
continuation, modification, or replacement of the project, programme or policy. The results
should be widely disseminated to staff concerned with future project design, planning,
development, implementation, and management.
6.8 Contingency Plans
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NHS Highland has carefully considered the major risks and constraints to the implementation
of this project. It is recognised that, for example, this project is being procured against a
background of growing uncertainty of Public Funding commitment going forward.
The major risks to the project are examined in detail at 2.10 along with the contingency
measures that are in place to mitigate these risks. However, beyond this, the Board are
mindful that an overall contingency plan may be necessary should the project be unable to
proceed for whatever reason and to that end there is an exercise underway that seeks to look
at solutions to the current service delivery problems in a less centralised way that will cost
less but lose many of the advantages of integration as demonstrated in this Supplementary
OBC.
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7.0 Conclusion
NHS Highland has conducted a thorough and evidence based analysis of its present and
future Day Surgery, Endoscopy and Renal requirements. This Supplementary Outline
Business Case represents the collective input of NHS Highland Project and Clinical Staff,
their Advisors and the appointed PSCP and their Supply Chain Team. Additionally, we have
consulted widely with patients and user groups.
The conclusion is clear; the current facilities are inappropriate to deliver the Services that
meet higher expectations for all. The main issues are the lack of space, poor fabric and
design of the current facilities, along with having no realistic space to expand all three
services within the existing demise – to do so would also work against the objectives inherent
in shifting the balance of care too.
We are confident that the proposals in this Supplementary Outline Business Case are well
developed and reflect the needs of our Patients, Strategic Partners and other external
stakeholders as well as NHS Highland’s clinical, operational and administrative staff.
The Board are of the opinion that the proposed new facilities are vital if we are to meet future
strategic targets. The preferred option, to develop a single storey Day Surgery and
Endoscopy Unit to be built at Raigmore together with a Renal Facility Utilising the 7 th
Floor at Raigmore, the existing renal Department and a Renal Satellite Facility at
Invergordon Hospital, represents the best investment in our services going forward. It is a
best outcome option that would allow us to fulfil the Key Drivers identified in this Business
Case and deliver a quality 21st Century Service that meets the needs and aspirations of
patients and staff.
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Appendix One
Activity Schedules
Appendix 1 - Day
Surgery Patient Projections.pdf
Future Endoscopy
Room Requirement.pdf
Appendix 1 - Renal
Patient Number Projections.pdf
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Appendix Two
Accommodation Schedule
NHS Highland DSP
Appendix 2_1.xls
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Appendix Three
Workshop Attendees
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Benefits Workshop One: Generation
Venue:
Date:
Raigmore Hospital
12th April 2010
Attendees:
Andrew Ward, NHS Highland
Jim Docherty, NHS Highland
Dr Kenneth Barker, NHS Highland
Donna Janssen, NHS Highland
Iain Buchan, Buchan + Associates (Facilitating)
Donald Milligan, Currie & Brown (Facilitating)
William Nicol, Cyril Sweett
Benefits Workshop Two: Appraisal
Venue:
Date:
Raigmore Hospital
28th May 2010
Attendees:
Alasdair Kinghorn, Keppie Architects (Facilitating)
Iain Buchan, Buchan + Associates (Facilitating)
Kevin Gauld, Currie & Brown (Facilitating)
William Nicol, Cyril Sweett (Facilitating)
Arlene Clark, Day Surgery Nurse
Alison Maclean, Control of Infections Nurse (am only)
Rod Harvey, Clinical Director (am only)
Donna Janssens, Clinical Manager (Day Surgery & Endoscopy) (am only)
Malcolm Iredale, Director of Finance, (pm only)
Karen Underwood, Raigmore Accountant
Eric Green, Estates Manager
Colin McEwen, Estates
Derick Macrae, Accommodation/ Masterplan/ Medical Manager
Anne Allan, Renal Lead Nurse
Rhoda Bell, Renal Lead Nurse
Stewart Lambie, Renal Consultant (pm only)
Jim Docherty, Project Clinical Lead
Ray Stewart, Partnership Director
Jo Veasey, Women and Children Manager
Cathie Walker, HR Manager
Rosie McGee, Health and Safety Manager
Gavin Hookway, Theatre Manager
Arthur Murray, CDMC
Andrew Ward, Surgical Manager
Workshop Three: Risk Workshop
Venue:
Date:
Morrison Construction Offices
15th September 2010
Attendees:
Donald Milligan Currie & Brown (Facilitating)
Kevin Gauld Currie & Brown (Facilitating)
Andrew Ward NHS Highland
Donald McLachlan Morrison Healthcare
William Nicol Cyril Sweett
Ronnie Bruce Morrison Healthcare
Eric Green NHS Highland (Part)
Lindsay Allan Keppie Architects
Neil Gallacher McLeod and Aitken
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Appendix Four
Benefits Scoring Results
Appendix 4 Benefits Scoring Workshop Results.xls
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Appendix Five
Risk Workshop Results
Appendix 5 - Options
Risk RegisterRaigmore 170910(1).xls
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Appendix Six
PSCP Risk Register
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Appendix Seven
Project Programme
Appendix 7 - Copy of
Raigmore Invergordon Programme.xls
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Appendix Eight
Financial Papers
Appendix 8 - OBC
Economic & Fin ModelFinal Rev 2 - 15.10.10.pdf
Appendix 8 Part Xin support of Section 5.4 Sensitivity.doc
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Appendix Nine
OBC Forms
Appendix 9 - OB1
For - Option 1a .pdf
Appendix 9 - OB1
For - Option 4.1 & 5.4 .pdf
Appendix 9 - OB1
For - Option 4.2 & 5.4 .pdf
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Appendix Ten
Optimism Bias Calculations
Appendix 10 Optimism Bias - OBC Final Rev 3 - 20.10.10.pdf
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Appendix Eleven
Letter of Support from NHSH
Board
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