Ornge: Improving Service Levels

Ornge’s management team is taking a look at its helicopter service contract, which accounts for 42 per cent of its annual costs. The firm is a not-for-profit organization tasked with providing air and ground ambulance services for Ontario. In the past, Ornge has subcontracted helicopter service to a service provider. But an analysis conducted within Ornge suggests that owning the helicopters might save the firm a lot of money. Any savings could be reinvested, allowing Ornge to respond to more service calls per year. There are benefits and drawbacks to each of the options facing Ornge and Dr. Christopher Massa and his team are trying to determine which option makes the most sense for the firm. The Ornge case allows students to look at a simple capital budgeting situation in the not-for-profit sector. It also provides insight into innovative business models considered by firms outside the private sector.