Tom Brooks - opinion piece - What contribution to NHS IT do Local Service Providers make?

The Leeds Teaching Hospitals Trust paper shines a spotlight, albeit a small one, on the role of NHS IT contractual relationships and in particular is thought provoking about the Local Service Provider role.

Prima facie, Leeds Teaching Hospitals is in a good position, located as it is within a cluster in which the Local Service Provider intended to source products from an existing substantial trust provider (iSoft). The Leeds Trust had only limited need for the managed operations and contractor support available from its Local Service Provider. As the Leeds paper states, “The withdrawal of, say, Accenture from the national programme would be significant but any gap would be filled by another existing LSP”. Hence no major concerns from Leeds Teaching Hospitals about the identity of its Local Service Provider.

A different view is taken in relation to its software and systems provider. Leeds enjoyed direct contracts with iSoft for necessary software products. As the paper states, “More critical for Leeds Teaching Hospitals Trust would be if iSoft ceased trading”. These direct contracts with iSoft no doubt enabled Leeds Teaching Hospitals Trust to fully satisfy its financial governance responsibilities.

Leeds Teaching Hospitals Trust reveals that having contracts with the product suppliers was of limited benefit when Connecting for Health became involved. It records: “For example, when the Trust recently wished to explore extending its existing Picture Archiving and Communications [PACS] contract to provide a Trust-wide solution, our supplier would only do business through the Connecting for Health and LSP route. Reduced supplier competition will almost certainly cost the Trust more in the longer term.”

It is not easy to see what value the Connecting for Health and Local Service Provider route would add to extending the PACS contract. It is difficult to understand what benefit Leeds Teaching Hospitals Trust would receive from obtaining PACS supply from Connecting for Health through the Local Service Provider rather than by a direct contract between the Trust and the supplier.

Would the trust be properly exercising its governance duties if, without obtaining a formal contract from the supplier, it brought into use additional PACS equipment serving new Trust locations and new groups of patients? Liabilities arising from the use of the existing PACS equipment are covered by the contract between the Trust and the supplier, but what about the add-on items? For example, is the Trust protected against malfunction of the additional PACS equipment that they have permitted to be installed, but for which they have no contract to cover its use?”

Leeds Teaching Hospitals Trust admits that it is “being affected by the CfH-induced changes to the NHS IT market”. Have these changes brought any benefits to balance the suggestions that have been made that the Connecting for Health approach constitutes restraint of trade? If the Connecting for Health model has been beneficial, those who have gained are remarkably silent about their achievements.

Will the era of the NPfIT be remembered most for experimenting with a practice, novel to NHS IT, of contracting for technology services through wholesalers? Local Service Providers seem to be little more than wholesalers, who buy product and service in bulk from sub-contractors and who supply a retail like service to individual trusts. However, unlike normal commercial arrangements, the NHS Trusts have no formal contract with the Local Service Providers or apparently any effective way of ensuring value for money.

Will the post NPfIT era will see a rapid disappearance of Local Service Providers and experimental wholesaler trading in IT services for the NHS?

Tom Brooks

January 2007