National programme for IT will push NHS IT spending growth up by 61% in 2004

Spending revolution will test management structures and bring major changes.

Spending revolution will test management structures and bring major changes.

The word "revolution" is often misused, but in the case of NHS IT, it is apt. Figures from the Computer Weekly IT Expenditure Report, produced by Kew Associates, show spending on hardware, software and services is set to increase by 61% from 2003 to 2004 to nearly £3bn. That contrasts with average growth of 8.4% in IT spending in the economy as a whole.

At the same time, the nature of spending will change. In 2003, about 8% of spending went to outsourced service providers; in 2004, that figure is expected to reach 37%, the report shows.

Such a revolution in the level and nature of spending will test IT management structures, introduce new personnel and alter short-term and strategic goals.

The root of the overhaul in spending lies in an unprecedented public policy intervention. In 2001, the government- commissioned Wanless Report noted that investment in IT accounted for about 1.5% of healthcare spending in the UK, compared to 6% in the US. It went on to suggest that increasing IT spending could improve healthcare and increase efficiency.

The Cabinet liked what it read. Successive UK governments have found an intractable problem with NHS spending. Advances in medical technologies and techniques mean more people can be treated; in turn, they live longer and require more healthcare. To maintain a comprehensive service, free at the point of delivery, requires spiralling health budgets and unpalatable tax increases to fund them.

In April 2002, the Treasury said NHS IT spending should double by 2022, and in October of that year the Department of Health announced funding of £2.3bn, over three years, for a centralised procurement programme called "the national programme for IT".

Murray Bywater, manager director of health IT research firm Silicon Bridge, said, "The move is significant, world-leading and very brave. But one would be naive to say that it is easy."

The huge leap in NHS IT spending is a result of the initial procurement thrust of the national programme. Over the past year it has signed contracts worth £5.2bn to supply its main applications, infrastructure and local implementation.

Lasting between five and 10 years, the contracts will supply the systems that will support electronic patient records, electronic prescribing, electronic appointment booking, and create a broadband network to transfer data between NHS organisations.

The aim is for doctors and nurses to be able to access the same medical records for every patient in England, whether they are in a GP's surgery or a hospital. This will reduce errors and mean clinicians spend less time getting hold of information and more time treating patients, the programme's architects believe.

To drive this procurement, the Department of Health set up a central office for the national programme for IT, headed by Richard Granger, director general of NHS IT. But the programme will also require the engagement of many other NHS bodies to meet its goals. These include the primary care trusts that support GPs, other NHS trusts, and strategic health authorities, each with its own chief information officer responsible for driving the programme forward.

The NHS in England has been divided into five clusters. Each one has several strategic health authorities and local service providers (LSPs) - private sector companies or consortia responsible for delivering the national programme's technologies.

The NHS Information Authority helps the programme tie in with existing national applications, and the Modernisation Agency will be advising strategic health authorities on changing working practices.

The programme also includes the National Clinical Advisory Board, to engage clinicians and nurses, and the Public Advisory Board to canvas public views.

Such massive investment in technology will radically change the role of NHS IT staff. They will be expected to work with new technologies, new types of suppliers and engage with clinicians to get them using new systems.

Tony Eardley, director of health informatics services at South Staffordshire Healthcare Trust and chairman of Assist, a group representing NHS IT managers, said some staff were apprehensive about the changes.

"Fundamental changes that have been proposed are now happening and any change of that nature creates uncertainty," he said. "But now the contracts have been signed and some of the LSPs have started work, the uncertainty is starting to be reduced."

The national programme could improve the status of IT professionals in the NHS, Eardley said. "It should contribute towards a more regulated profession of ICT people working for the NHS - whether they are existing NHS staff or working for an LSP - whoever, they should be working towards the same standards."

According to Eardley, the investment programme will also change the skills required of NHS IT staff. "We do need some core skills for technicians, but there is the opportunity for NHS IT staff to differentiate themselves by adding to that role by showing their knowledge of how hospital consultants work, how GPs work and how nurses work,"he said.

Because of the scale of the national programme, some local health serviceIT organisations have been seduced into believing that there will be less need for local IT spending. This is not true.

"The national programme is so all-consuming that people tend to think that this is an answer to all the problems and we do not need to put resources in ourselves: that is not the case. Training, change management and cultural changes all have to be put in place. That message needs to get across," said Eardley.

Now the major contracts have been signed, spending will begin to even out, and the NHS is unlikely to see such a dramatic increase in IT spending again. However, this does not mean IT staff can sit tight and avoid the changes it will bring. Local implementation has just started and will continue for around 10 years.

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