The NHS' national IT strategy seems to be ailing after just five
months. Jon Hoeksma reports on the fears for Labour's election
baby, already running behind schedule.
In March the Department of Health (DoH) outlined a £5bn national
NHS IT programme designed to deliver rapid progress through
strategic outsourcing to groups of suppliers led by a handful of
blue-chip service providers. Announcing the strategy, John
Pattison, the department's director of research, analysis and
information, said he had been given two years and nine months to
deliver the programme.
Five months on, key questions about the IT strategy remain
unanswered. Despite a £5bn price tag over the lifetime of the
programme, no new money has been committed; basic standards and
specifications have yet to be set; and the procurement model
remains untested. What has been achieved, thanks to the promise of
billions of pounds in extra investment, is a galvanisation of
technology suppliers into thinking how they might tackle NHS IT.
But some of the big suppliers are concerned about the coherence of
the national strategy and whether it can be delivered within the
timescales set. And the smaller, specialist health suppliers are
suffering as NHS procurement activity has died at the local level
in anticipation of the national programme.
At a supplier forum organised by the NHS in July, Pattison said
existing NHS IT procurements will be reviewed to ensure that they
are compatible with the national programme. Those that are not will
be ended. "We do not want reasonable current procurements to stop,"
he said.
Murray Bywater, an analyst with Silicon Bridge Research, said life
has to go on in parallel with the national programme. "We can't
afford a two-year moratorium on procurements." If the market does
freeze over, some of the specialist healthcare suppliers will not
survive, he said.
"The market will be dead by the end of 2003," said one chief
executive of a supplier. "In general, it is pretty bloody awful."
Another leading NHS supplier said, "We are seeing a rapid slowdown
in business, and some healthcare suppliers are now talking about
laying people off."
A key criticism levelled at the strategy is the lack of a business
case or clear objectives. The priorities set so far - broadband
access, e-prescribing, e-booking and electronic records - appear to
be based on political considerations. "There has been no business
analysis. Nobody seems to have done even the simplest level of
analysis of priorities," said one chief executive of a specialist
supplier. "We need clarity of vision and six months on we are no
further [along]."
This view seems to be at least partly shared by the Office of
Government Commerce. Its initial Gate Zero review of the strategy
last month is reported to have produced a record 40 comments.
The procurement timetable for the strategy has already started to
slip. Two prospective prime service providers said they were told
by the DoH to expect advertisements seeking bids from suppliers in
the Official Journal of the European Communities in July, with
selection made by August, so they kept their bid teams on stand-by
over the summer.
These ads are now scheduled to appear in October, with national
short-listing by March 2003. Then strategic health authorities will
select the prime service provider they want to work with locally.
The earliest date that contracts could be awarded will be November
2003.
Yet other industry insiders doubt whether even this timetable is
achievable, considering the current progress and the huge amount of
preparatory work still required. One leading market analyst
predicts it will actually take at least two years for strategic
health authorities to award contracts to prime service providers.
This is supported by the timetable at Blackberd, a group of 12 NHS
trusts based near Birmingham, which is procuring an electronic
patient record system. It placed an Official Journal ad in June yet
predicts that it will take two more years to award the full
contract.
Prospective prime service providers will have to maintain large bid
teams until the contract has been awarded just to stay in the game.
"Some of the major players are already beginning to baulk," said
Pete Dyke, head of market development at BT Health.
With no detailed specifications for systems or national standards
yet agreed, the prime service provider shortlists are likely to be
compiled on technical and economic capabilities rather than how the
providers will deliver services. Most industry leaders believe the
final list of prime service providers will be limited because they
will have to bear a level of risk worth several billions of
pounds.
The leading contenders to become prime service providers are
believed to be EDS, IBM and Siemens, with other potential suppliers
including BT, Schlumberger-Sema, Logica and Lockheed Martin.
A senior executive from one would-be prime service provider
familiar with Whitehall said that although investment in NHS IT has
been identified as a political must-do to deliver NHS
modernisation, he can detect no political leadership driving the
programme. He suggested that some of the prime service providers
are becoming frustrated at the slow pace of progress, to the point
of taking their concerns directly to Downing Street.
Another executive said, "If the timetable is difficult for us, it
must also be difficult for the Government as it won't deliver any
effective change to the NHS ahead of the next general election."
This apparent drift could have serious consequences. With the DoH,
the Information Policy Unit and the NHS Information Authority still
at first base on specifying what they want suppliers to deliver,
these bodies will be in a poor bargaining position when it comes to
negotiations.
"When [the prime service providers] start negotiating all hell will
break loose and the Government will be over a barrel," predicted
the veteran chief executive. "At that point a great deal of cold
water will fall on the strategy and EDS and IBM will say, 'That's
what you can have for your money'. All this requirement stuff is a
sideshow. In the end it will be what suppliers think they can
deliver."
The procurement strategy assumes that detailed specifications and
agreement on how to deliver a range of complex, inter-related
applications at local and national level can be wrapped up between
April and October 2003. Recent NHS IT history, in which it has
taken up to three years for a single hospital to procure an
electronic patient record system, suggests that this is
unrealistic.
An indication of the potential problems and delays ahead can be
seen in the current contract negotiations for an NHS-wide e-mail
and directory service. Although EDS was named as a preferred
supplier in March, negotiations on price and the service delivery
continue despite the June deadline.
The NHS IT programme is far more complex. Some key systems, like
the concept of an integrated clinical records service, do not yet
exist.
But despite the difficulties, many commentators believe bringing in
major IT players remains the only way the NHS can achieve its
long-term modernisation goals. "There is an irrefutable logic in
this approach, but it is a long-term game," concluded Bywater.