EngGen115 Systems Project: Info Pack

Student information: This assignment assumes the following time commitment: 2 hours preliminary planning in week 7 including selecting a leader for your group, 2 hours work in tutorials per group plus 3 hours outside the tutorial for 2 weeks {weeks 8 and 9} plus a lecture and some final working sessions in week 10. Total time for completion of the assignment is ~15 hours. Note that the information you require has primarily been included in this document. There is no requirement to conduct substantive additional research. A brief read through some of the documents that are referenced will add background flavour to the assignment but this is not essential. Interim deliverables after weeks 8 and after week 9 are listed below. Final output is a report of max 6 pages and an A3 poster with a key results summary which will be due at the end of week 10. Initial focus in the first tutorial is primarily on understanding the problem based on the incomplete and contradictory information provided. Then progress to Stakeholders aspirations and how their diverse views might be managed and understood and evaluated. It will be important to think of the Stakeholders Influence and Importance. The second tutorial will focus on the Requirements of the project and how they might be modified to obtain broader Stakeholder support. The final working sessions will focus initially on a brief first pass at cost and benefit and how Test might influence our Requirements; and then on to the report and poster. Introduction: This is primarily a teaching assignment with some reference to actual information in the public arena. The scenario described is not currently being considered by Treasury. The Auckland region has recently undergone significant changes in its governance with the establishment of a SuperCity which incorporates 7 previous councils stretching from Franklin in the south to Rodney in the north. The main driving force behind this change was to improve Aucklands economic performance and thereby improve NZs overall performance. Council services were expected to be provided more effectively and consistently across the region with associated improvements in efficiency. The initial establishment of the SuperCity is complete and operational. Given the current global economic climate (euro issues and the state of the global economy), and the continuing need to rebuild Christchurch; the NZ Governments revenue vs expenses continues to be a challenge with the need for additional borrowings to make up the shortfall. Treasury continues to investigate ways of reducing Government expenditure. In this regard a Treasury proposal, under review, appears to be directed at combining the various Health Boards that exist in the greater Auckland area. It will be necessary to clarify whether this is actually Treasurys objective or whether this is just a convenient explanation for some deeper initiative. Currently the Auckland District Health Board operates the Auckland City Hospital in Park/Grafton Rd. The Waitemata District Health Board operates North Shore hospital in Shakespeare Rd in Milford and the Waitakere Hospital in Lincoln Rd Henderson. The Manukau and Counties Hospital 1

Board operates the Middlemore Hospital in Otahuhu. These four major hospitals in the region provide a variety of in-patient and outpatient services and provide emergency medical care for their areas. ADHB provides a major share of the complex services to the region and in some cases specialist services for New Zealand.

Assignment For clarity the you referred to in the following paragraphs is John Jones who is the Engineering Partner of a small firm. John Jones is your boss and will assign you your groups Systems Project for EngGen 115.

As a result of a tender to Treasury by your architect partner the Design and Build New Way Firm (20 employees 5 million turnover) you jointly run with your partner has been selected by Treasury to provide a preliminary assessment and feasibility for the construction of a new hospital block on land in the Auckland Domain (currently covered in trees) immediately adjacent to Auckland Hospital. This tender does not seem entirely consistent with the initiative to create a single Auckland Region District Health Board but you assume it must be related to this proposal. The Treasury proposal seems to be based on concentrating complex healthcare for the region at Auckland Hospital and perhaps ultimately to create an Auckland Super District Health Board that combines these four greater Auckland Hospital Boards under one administration. Centres for primary and some secondary care will be retained or created at individual locations as appropriate across the region but the clear intention is to avoid complex diagnostic equipment and complex surgery being offered at all locations. The intention is to concentrate as much service as possible at Auckland Hospital in Grafton Rd as this is the largest and most up to date facility and performs the most tertiary care in the entire country. Some of the current older building space at Auckland Hospital is underutilised subsequent to the recent modernisation project. Treasury intends to recommend to Government that they work with the Auckland Council to change the zoning on the portion of the Domain (current primarily in trees) adjacent to the hospital to allow space for hospital expansion as and when this is required. You (John Jones) were unaware of this tender being submitted by your firm as you have just returned from offshore where you have been managing a large project in Indonesia. Your architect partner is keen to start the building design conceptual work immediately to respond to the Treasury request. The fee for this work is $250,000 with an anticipated cost of $100,000. After some rather heated discussion with your partner about the wisdom of your firm being involved in this tender, because of the potentially high level of emotion associated with Health Care, you have agreement from your partner to try and understand the Treasury proposal in detail including looking at the financial justification and then to do a quick Systems Thinking review of the Treasury proposal before commencing the work described in the tender. You are concerned about the potentially negative publicity of your firm being involved in this work. You also feel that there is a risk of the requirements changing over time as the client begins to think through the consequences of 2

immature decisions in the early phases. You are concerned that these changes will reduce the potential margin on the project and will add to the risk of damaging your reputation The Ministry of Health website shows that 75% of Vote Health or 10.5 billion $/yr is provided on a per population basis to the 15 north island and 5 south island District Health Boards. A quick review of Annual Plans and Annual Reports for the three DHBs establishes the following data. This information is provided to avoid the need for the Systems groups to have to review any outside data due to the time constraints. Note this data may or may not be useful for the assisgnment. Groups need to be careful they do not waste time in research. {cmdhb.govt.nz; adhb.govt.nz; waitematadhb.govt.nz} The greater Auckland region has 3 District Health Boards: Auckland, Waitemata and Counties Manukau. DHBs are funded on a per population basis. Population is ~ 500,000+ in each of Waitemata and Counties Manukau with slightly less in the Auckland board. The allocation is ~ 1.1 billion for Waitemata and Counties Manukau and ~1 billion for Auckland. Operating revenues are 1.3 billion for Waitemata and Counties Manukau and ~ 1.8 billion for Auckland. Auckland DHBs revenue is well above its Government allocation as it provides specialist services (mainly intensive assessment and treatment) to other District Health Boards for which it is paid by these other DHBs. Auckland provides ~ 50% of its acute and elective surgery for other DHBs. Total acute and elective services at Auckland are 125,000 cases per year. Staff at Auckland is 10,000 with the other 2 closer to 7000 each. Reading the Annual Reports of the three different Health Boards one would conclude that Auckland and Waitemata already share some functions. This is probably a result of the Government appointing the same person as Chair of both these DHBs. The Counties Manukau DHB appears to operate on a different basis which is maybe a reflection of the higher Maori and PI % in the populace which is served by the Middlemore Hospital. All 3 DHBs are active in anti-smoking. Diabetes appears a risk factor for all, but a more major issue for Counties Manukau. You remember a recent TV presentation based on research by one of the Universities that seems to indicate that in New Zealand the health of the population was related to economic status with poorer health amongst the financially disadvantaged. Anecdotal evidence might suggest that people in the Manukau Counties DHB visit hospital more frequently as this is nominally a free service whereas visits to a GP require a fee to be paid. These comments seem to be reinforced by the following statement in the 2011/2012Counties Manukau Counties Annual Plan: A large proportion of medical admissions are driven by self-referrals to the Emergency Department and this remains a challenge to the DHB. Such statements do not appear in the Annual Plans of the 2 other DHBs. It is clear from your reading that Counties Manukau has a higher % of Maori and PI patients with poorer health based on the lower socio economic standing. At your request prior to starting your internal Systems Analysis you have had your company analyst try and determine the real basis for the Treasury work and then to try and determine the financial metrics, or benefits, for the Treasury proposal. Your analyst has not been able to obtain the 3

Treasury working papers as these are regarded as confidential. However some informal telephone conversations with various informed individuals has provided the following information. 50% of ADHBs inpatient services of 125,000 cases/yr are provided to other DHBs primarily CMDHB and WDHB at present. Some services are provided by ADHB to all of NZ. Current estimates are that complex treatment accounts for 60% of inpatient services provided at ADHB. Contrary to your initial expectations about creating an Auckland Super Health Board, the Treasury proposal appears to actually intend a progressive move to incorporate complex treatment from as far away as Taranaki and the top of the North Island into Auckland Hospital. This new information is surprising and causes you great concern. Estimates are that this will increase complex treatment at Auckland provided on behalf of other DHBs from 60,000 cases/yr to 100,000 cases/yr. Treasury assumes that there will be an efficiency gain from concentrating more complex service provision at Auckland Hospital of 20%. Additionally Treasury has calculated the capital expenditure for the DHBs affected at a total of 250 million $/yr and expects to save 20% of this expenditure by concentrating complex services at Auckland Hospital. Your analyst has looked at the transportation requirements to move patients from distant regions to Auckland. You have not been able to verify how, or if, Treasury has taken this into account, but your analyst has indicated (based on informal advice) that 25% of the additional 40,000 patients will require air transport to Auckland by Air Ambulance and 75% could be transported by Ambulance. Costs are estimated at $3000/patient for air and $500/patient from ground transport. It appears Treasury has ignored the cost incurred by patients relatives in travelling from their local regions to Auckland to support the patients. Your analyst has estimated relative costs at 2 relatives per patient for 5 days at $200/day/person. For the 40,000 additional patients proposed to be treated at Auckland this amounts to a social cost to the relatives community of 80 million $/yr. You are concerned about how this relative cost should be treated in the benefit analysis. Although Treasury is primarily concerned with Government expenditure you think that the analysis might be better on a NZ wide basis. Your analyst has also discussed with you the costs incurred if any patient dies as a result of the time incurred in transportation to Auckland for treatment rather than being treated locally. Your knowledge of the method that NZTA uses to cost road fatalities would indicate this cost is ~ 3 million $/person. You are unsure how to estimate the number of fatalities which might result and recognise this impact may be offset by superior patient care once patients arrive at Auckland Hospital. Based on discussions with your analyst you have arrived at the following simple financial benefits (excluding relatives costs): Increased complex service at Auckland Hospital = 40,000 patients/yr Cost of service = 500 million $/yr (estimated from ADHB current cost of service provision to other DHBs) Efficiency benefit of centralised service 0.2*500 = 100 million $/yr Efficiency benefit of reduced capital expenditure = 0.2*250 = 50 million $/yr Transportation cost = (0.25*3000 + 0.75*500)*40,000 = 45 million $/yr 4

Cost of additional fatalities (10 assumed/yr) = 30 million $/yr Overall benefit = 100 + 50 + (45) + (30) = 75 million $/yr {0.7% of NZ wide DHB allocation}. This benefit excludes relatives costs. Given your analysts simple financial analysis your intention, as previously agreed with your Architect partner, is to create a small Systems Team within your firm to complete a Stakeholder Analysis on the Treasury Proposal and perhaps if sensible make a first pass at a Requirements Document. You are fortunate that your firm has some young graduate Engineers who have been telling you about Systems Thinking. You will ask your team to initially carefully review the conflicting information you have uncovered to see if they can make sense of this proposal and then to check the apparent benefits. This Treasury tender proposal carries considerable emotional overlays as communities have historically fought hard to retain their local medical facilities. In additional there are overtones of the relationship between poverty and health. You have decided initially to ignore the issues to do with the relationship between poverty and healthcare and focus on the centralisation of services for complex medical conditions. It would be easy for you (John Jones) to immediately dismiss this proposal as too difficult and hence unlikely to succeed and that your firm should not be involved, however you recognise that if the savings/benefits are real that one cannot ignore savings/benefits of this magnitude. Additionally you know that the health of the NZ population is a major issue and any initiative which may be able to improve the nations health deserves careful thought. The proposed tender seems to have many of the characteristics of what some of your young graduate engineers call the Fire Centre proposal in England. However a Systems Approach should allow you to properly review the issues and see if there is a solution that might be acceptable to the major Stakeholder groups. While the required tender seems to focus on the proposed new building it is clear Treasury encourages other relevant information to be included. You have a strong community focus as an individual and want to do what is best for your city and the country.

Deliverables as given by John Jones to his internal Systems Team {ie each EngGen115 group}: Note: there is limited time for this assignment so please use your time carefully. Marks are primarily awarded for the quality of the thinking and originality not for the quantity of the work. Hint: do not get buried in detail. Initially try and keep the big picture in focus to determine what this project initiative is really about. Is it about improving health or saving money or both? Which is more important? Is a new hospital building design critical at this time? Weeks 6 and 7 and possibly inter semester break: selecting a leader and organising a group work plan. This will be a deliverable early in week 8. After first tutorial and group work sessions (week 8): Brief comments on the Treasury Proposal Brief comments on Treasurys benefit analysis as developed by the company analyst 5

Stakeholder Analysis A list of potential stakeholders Stakeholder Matrix of importance agendas/ interest vs influence / power Trade-off matrix showing how these disparate views might be traded off to form a best fit stakeholder view. Hand in date to be confirmed but early in week 9. After second tutorial and group work sessions (week9): Requirements A list of the key requirements which emerges from this analysis. How might these be modified in the light of your Stakeholder analysis to gain better Stakeholder support? Hand in date to be confirmed but early in week 10. After final working sessions (week 10): Initial Design Options and what Test might do to change your thinking List the main options which you think might be available for the overall, integrated, healthcare service and the role that each hospital might play in it, as part of the system. Completed Peer Review forms Final Report (max 6 pages) and A3 poster. Hand in date late in week 10. Conclusions Having been through this process do you feel more or less confident about the projects prospects for success? Please provide a recommendation on whether your firm should respond to this tender and if so what you might include

Note to students: Key contact for this Systems Project for any queries is Rob Kirkpatrick, room 1.814 email: r.kirkpatrick@auckland.ac.nz Please try and keep your questions to essentials and remember there are 600 students in EngGen115, and only one of me. I am here to help and make this a great learning experience.

ENGGEN115 SYSTEMS PROJECT TIMELINE Semester 1 - 2012

Week 5 6 Break 7 8 Systems Thinking(1) Team Leaders Briefing Session Feedback on Workplans Friday Tute only Understanding Drawings Progress Project Progress Systems Project 9 10 7 am Tue Special W/shop on Systems 8am Wed Truss Design 11 12 Systems Feedback and Wrapup (1)

Lectures

CREO plus Understanding Drawings Guide to Group Work Creo Assignment

Systems Thinking(2) Project Brief and Information Pack Creo Ass + Understanding Drawings No Friday Tute

Systems Thinking(1)

Systems Thinking(2) Intro Truss Proj Feedback on Stakeholder Analyses Progress Systems Project Truss Groups formed Hand-in draft Comments & Stakeholder Analysis on Tue 11 SSK

Truss Design

On CECIL

Tutorials

Truss Design Project (new groups) Tue 11 SSK handin Requirements Wed 12 noon SSK hand-in report, summary poster, Personal Critiques Preparing final deliverables and personal critiques Truss Groups Design Truss

Truss Design Project

Truss Testing

Deliverables/ Assessment

Apart from the final report and poster, the deliverables are to be handed in to SSK at 11 am on each Tuesday of Weeks 8, 9 and 10 Personal Peer Reviews are to be electronically filed by 12 noon Friday 18 May (week 10) Selecting leadership, Creating workplan Allocating tasks Selecting leadership, Creating workplan Allocating tasks

Hand-in Workplan on Tues 11 SSK

Hand-in Truss Design report

Group Activity

Group Allocation

Understanding and scoping the Problem

Developing stakeholder Analysis

Developing key requirements & options

Truss Groups design and construct truss

Truss Groups construct truss