PLEASE URGENT HELP

This is the main question to solve in the whole case: which machined to allocate to which centres. I need help with answering the following questions

• Why is the allocating a problem? why is it important to solve his problem? and what are the Constraints in this case? please a text written on the computer for at least a1/5 page

Ivey Publishing W15491 RADIATION TREATMENT MACHINE CAPACITY PLANNING AT CANCER CARE ONTARIO Jonathan Wang and Professor Greg Zaric wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Re ducti of this material is not covered under authorization any production rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G ON1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Copyright 2015, Richard Ivey School of Business Foundation Version: 2016-08-12 INTRODUCTION Jonathan Wang, a new planning analyst at Cancer Care Ontario (CCO), has been tasked by the director of Capital Projects at CCO to recommend a strategy for allocating new linear accelerator capacity to cancer treatment centres over the five-year period from 2013 and 2017. CANCER CARE ONTARIO CCO is an Ontario government agency that leads multi-year system planning of cancer treatment resources, manages contracts for services with hospitals and providers, develops and deploys information systems, establishes clinical guidelines and standards, and tracks performance targets to ensure system- wide improvements in treatment and access to care for cancer and chronic kidney disease. One of the driving values behind CCO's mandate is to ensure that Ontarians with cancer receive the best quality care possible. In April 2012, CCO launched its Radiation Treatment Capital Investment Strategy (RTCIS), which outlined recommendations for capital investments in radiation treatment machines to meet the demand for radiation treatment in Ontario. This strategy is important for cancer patients as it aims to ensure that the system has sufficient capacity for those who would benefit from radiation treatment. Several problems are associated with insufficient capacity: some patients who should receive radiation therapy might not receive it, or might not receive it in a timely manner, some patients may be required to travel to an Ontario cancer centre other than their local centre or to other jurisdictions at high personal cost; and some patients may be required to substitute for other treatments that are not as effective as radiation therapy for their condition. In some cases, a system-wide effect may occur, whereby insufficient capacity causes waiting times to increase for all patients. Ontario can be found at The Radiation Treatment Capital Investment Strategy for Cancer Care www.cancercare.on.ca/about/programs/cancerdevexp, accessed March 17, 2015. Page 2 9B15E014 CURRENT CAPACITY FOR RADIATION TREATMENT IN ONTARIO For some patients, radiation therapy is used as a curative treatment for cancer. In others, it is used to alleviate symptoms, extend life, and improve quality of life. Radiation therapy targets radiation at a tumour, using gamma rays, X-ray beams or radioactive compounds, with the goal of damaging cancer tissue while minimizing the damage to the surrounding normal tissues. Approximately half of cancer patients require radiation therapy at least once during the course of their illness, and many of these individuals will require repeat treatments. Radiation therapy involves the use of radiation machines, known as linear accelerators, or linacs (see Exhibit 1). Units of treatment are referred to as fractions, which means that the recommended amount of radiation is spread out over time to allow normal cells time to recover while the cancerous cells are usually less efficient at repair between fractions. Although radiation therapy is often a cost-effective treatment, it requires a high initial capital investment and ongoing operating costs. As a result, radiation therapy has been centralized to 16 cancer centres in Ontario, with the majority of the sites having multiple linacs. While the annual number of patients that can be treated with a single linac varies according the size and expertise of the centre, a single linac can, on average, treat 426 patients per year (based on each patient receiving an average of 20 fractions per case). CAPACITY EXPANSION The introduction of additional capacity requires the investment of capital resources for the construction or renovation of facilities with long implementation timelines; thus, accurate and timely projections related to capacity planning are critical to the treatment of cancer patients. Previous investments in the development of cancer treatment facilities and radiation equipment have increased the number of linacs from 65 in 2000 to 95 in 2011. The location and size of these new facilities were determined by projected incidence rates, estimated utilization rates and recommendations outlined in two previous Capital Investment Strategies developed by CCO and accepted by the Ontario Ministry of Health and Long-Term Care (MOHLTC). The first strategy resulted in new facilities in Grand River, Peel and Durham. The second strategy resulted in the construction of new facilities in Newmarket, Barrie, Niagara and Algoma, and redevelopment of the existing centres in Kingston and Ottawa. Investments in two portable treatment units created flexible treatment spaces, which were designed to provide short-term, closer-to-home access for patients at local cancer centres before they were expanded or built for radiation treatment. One of the portable facilities was redeployed from Ottawa to Peterborough in 2012, and a new location for the Barrie facility was under review (see Exhibit 2). CCO facilities have three types of permanent rooms. A "treatment room" houses a single linear accelerator. An "empty room" has been allocated for future expansion but is currently not being used. A "swing room" is an empty room used for equipment replacement. When an older machine requires replacement, the new machine is brought into the swing room and turned on. Once the new machine is switched on, the old machine is shut down and removed. This installation process usually takes between four and six months and minimizes any downtime on the machines. Ideally, the empty rooms should be filled with linacs before the swing rooms to maximize the use of the swing rooms for equipment replacement. Apart from the Page 3 9B15E014 portable facilities, linacs cannot be moved after they are installed. Once installed, a linac would have an expected life of nine to ten years. When facilities under construction in Niagara, Barrie and Kingston are complete, 103 linaes will be in operation (see Exhibit 3) and an additional 16 rooms will have the potential to be equipped with linacs (10 swing rooms and 6 empty rooms; see Exhibit 4), for a total potential machine capacity of 119 units. DEMAND FORECASTS FOR RADIOTHERAPY IN ONTARIO Demand forecasts for radiotherapy were calculated based on the projected growth in cancer incidence across the province and in each county. Currently in Ontario, 38 per cent of new cancer patients receive at least one course of radiation treatment. While the long-term CCO target for the utilization of radiotherapy is 48 per cent, the forecasts assumed a gradual increase of 0.5 per cent per year in utilization from 38 per cent in 2013 to 42 per cent by 2020. These demand numbers were then distributed to each cancer centre based on the historical radiotherapy referral patterns at the county level. Exhibit 5 shows the demand forecasts from 2013 to 2017 in terms of the number of treated radiotherapy cases per year. ALLOCATION PROBLEM Based on the current capacity in the system, Ontario has a total of 16 empty or swing rooms that can potentially be filled with linacs (see Exhibit 3). CCO's directive is to fill these rooms with linacs before making a request to MOHLTC for funds to build additional rooms and facilities. To meet the increasing demand for radiation treatment services in Ontario, the RTCIS recommended the allocation of four new linacs in 2013, three new linacs in 2014, five new linacs in 2015, two new linacs in 2016 and two new linacs in 2017. By 2018, CCO will run out of capacity for radiation treatment and will require additional capital investments to build new radiation treatment facilities in the province. Wang needed to devise an allocation strategy to allocate linacs to the available rooms in a way that ensures quality radiation treatment across the province. He wanted an allocation that would do the best job possible in meeting demand, given the available resources. Wang knew that CCO had previously conducted consultations with each region to assess where any new linacs should be located. Although he felt that a quantitative strategy would provide a more robust and defensible business case, especially when requesting funding from the MOHLTC, he was not sure how readily the plan would be accepted. Ivey Publishing W15491 RADIATION TREATMENT MACHINE CAPACITY PLANNING AT CANCER CARE ONTARIO Jonathan Wang and Professor Greg Zaric wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any form or by any means without the permission of the copyright holder. Re ducti of this material is not covered under authorization any production rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G ON1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Copyright 2015, Richard Ivey School of Business Foundation Version: 2016-08-12 INTRODUCTION Jonathan Wang, a new planning analyst at Cancer Care Ontario (CCO), has been tasked by the director of Capital Projects at CCO to recommend a strategy for allocating new linear accelerator capacity to cancer treatment centres over the five-year period from 2013 and 2017. CANCER CARE ONTARIO CCO is an Ontario government agency that leads multi-year system planning of cancer treatment resources, manages contracts for services with hospitals and providers, develops and deploys information systems, establishes clinical guidelines and standards, and tracks performance targets to ensure system- wide improvements in treatment and access to care for cancer and chronic kidney disease. One of the driving values behind CCO's mandate is to ensure that Ontarians with cancer receive the best quality care possible. In April 2012, CCO launched its Radiation Treatment Capital Investment Strategy (RTCIS), which outlined recommendations for capital investments in radiation treatment machines to meet the demand for radiation treatment in Ontario. This strategy is important for cancer patients as it aims to ensure that the system has sufficient capacity for those who would benefit from radiation treatment. Several problems are associated with insufficient capacity: some patients who should receive radiation therapy might not receive it, or might not receive it in a timely manner, some patients may be required to travel to an Ontario cancer centre other than their local centre or to other jurisdictions at high personal cost; and some patients may be required to substitute for other treatments that are not as effective as radiation therapy for their condition. In some cases, a system-wide effect may occur, whereby insufficient capacity causes waiting times to increase for all patients. Ontario can be found at The Radiation Treatment Capital Investment Strategy for Cancer Care www.cancercare.on.ca/about/programs/cancerdevexp, accessed March 17, 2015. Page 2 9B15E014 CURRENT CAPACITY FOR RADIATION TREATMENT IN ONTARIO For some patients, radiation therapy is used as a curative treatment for cancer. In others, it is used to alleviate symptoms, extend life, and improve quality of life. Radiation therapy targets radiation at a tumour, using gamma rays, X-ray beams or radioactive compounds, with the goal of damaging cancer tissue while minimizing the damage to the surrounding normal tissues. Approximately half of cancer patients require radiation therapy at least once during the course of their illness, and many of these individuals will require repeat treatments. Radiation therapy involves the use of radiation machines, known as linear accelerators, or linacs (see Exhibit 1). Units of treatment are referred to as fractions, which means that the recommended amount of radiation is spread out over time to allow normal cells time to recover while the cancerous cells are usually less efficient at repair between fractions. Although radiation therapy is often a cost-effective treatment, it requires a high initial capital investment and ongoing operating costs. As a result, radiation therapy has been centralized to 16 cancer centres in Ontario, with the majority of the sites having multiple linacs. While the annual number of patients that can be treated with a single linac varies according the size and expertise of the centre, a single linac can, on average, treat 426 patients per year (based on each patient receiving an average of 20 fractions per case). CAPACITY EXPANSION The introduction of additional capacity requires the investment of capital resources for the construction or renovation of facilities with long implementation timelines; thus, accurate and timely projections related to capacity planning are critical to the treatment of cancer patients. Previous investments in the development of cancer treatment facilities and radiation equipment have increased the number of linacs from 65 in 2000 to 95 in 2011. The location and size of these new facilities were determined by projected incidence rates, estimated utilization rates and recommendations outlined in two previous Capital Investment Strategies developed by CCO and accepted by the Ontario Ministry of Health and Long-Term Care (MOHLTC). The first strategy resulted in new facilities in Grand River, Peel and Durham. The second strategy resulted in the construction of new facilities in Newmarket, Barrie, Niagara and Algoma, and redevelopment of the existing centres in Kingston and Ottawa. Investments in two portable treatment units created flexible treatment spaces, which were designed to provide short-term, closer-to-home access for patients at local cancer centres before they were expanded or built for radiation treatment. One of the portable facilities was redeployed from Ottawa to Peterborough in 2012, and a new location for the Barrie facility was under review (see Exhibit 2). CCO facilities have three types of permanent rooms. A "treatment room" houses a single linear accelerator. An "empty room" has been allocated for future expansion but is currently not being used. A "swing room" is an empty room used for equipment replacement. When an older machine requires replacement, the new machine is brought into the swing room and turned on. Once the new machine is switched on, the old machine is shut down and removed. This installation process usually takes between four and six months and minimizes any downtime on the machines. Ideally, the empty rooms should be filled with linacs before the swing rooms to maximize the use of the swing rooms for equipment replacement. Apart from the Page 3 9B15E014 portable facilities, linacs cannot be moved after they are installed. Once installed, a linac would have an expected life of nine to ten years. When facilities under construction in Niagara, Barrie and Kingston are complete, 103 linaes will be in operation (see Exhibit 3) and an additional 16 rooms will have the potential to be equipped with linacs (10 swing rooms and 6 empty rooms; see Exhibit 4), for a total potential machine capacity of 119 units. DEMAND FORECASTS FOR RADIOTHERAPY IN ONTARIO Demand forecasts for radiotherapy were calculated based on the projected growth in cancer incidence across the province and in each county. Currently in Ontario, 38 per cent of new cancer patients receive at least one course of radiation treatment. While the long-term CCO target for the utilization of radiotherapy is 48 per cent, the forecasts assumed a gradual increase of 0.5 per cent per year in utilization from 38 per cent in 2013 to 42 per cent by 2020. These demand numbers were then distributed to each cancer centre based on the historical radiotherapy referral patterns at the county level. Exhibit 5 shows the demand forecasts from 2013 to 2017 in terms of the number of treated radiotherapy cases per year. ALLOCATION PROBLEM Based on the current capacity in the system, Ontario has a total of 16 empty or swing rooms that can potentially be filled with linacs (see Exhibit 3). CCO's directive is to fill these rooms with linacs before making a request to MOHLTC for funds to build additional rooms and facilities. To meet the increasing demand for radiation treatment services in Ontario, the RTCIS recommended the allocation of four new linacs in 2013, three new linacs in 2014, five new linacs in 2015, two new linacs in 2016 and two new linacs in 2017. By 2018, CCO will run out of capacity for radiation treatment and will require additional capital investments to build new radiation treatment facilities in the province. Wang needed to devise an allocation strategy to allocate linacs to the available rooms in a way that ensures quality radiation treatment across the province. He wanted an allocation that would do the best job possible in meeting demand, given the available resources. Wang knew that CCO had previously conducted consultations with each region to assess where any new linacs should be located. Although he felt that a quantitative strategy would provide a more robust and defensible business case, especially when requesting funding from the MOHLTC, he was not sure how readily the plan would be accepted