Stiffing suspicion at NHSnet

Pathology group switches to per-message fee. Mike Simons reports.

Pathology group switches to per-message fee. Mike Simons reports.

Health service IT managers fear they are being stiffed by a major supplier seeking to cash in on the planned rapid growth of NHSnet, the health service's private network.

CDS Group, which has a 60% share of the pathology IT market, has written to its customers saying it wants to change its licensing from an annual fee to one based on the number of messages sent across NHSnet.

Each year NHS labs send 35 million pathology reports to GPs and getting these reports sent electronically, rather than on paper, is seen as an important step in the development of the NHSnet.

The NHS Information Authority (NHSIA), in consultation with health service professionals and systems suppliers, has defined a new standard format for pathology messaging which includes security and encryption.

However, CDS said it would have to change its licensing model to meet these needs. "The production of the relevant software is only commercially viable if we secure your commitment to the development and installation programme in the form of a purchase order," it said in a letter to customers.

A number of NHS IT professionals contacted Computer Weekly over the issue. One IT director, who asked not to be named, believed CDS was taking advantage of its position in the market. His trust had to buy the software and agree to the new pricing structure because it was too difficult to switch suppliers. "It costs hundreds of thousands of pounds to buy a new system and it can take two years to procure," he said.

Although the proposed cost per transaction is about 0.04p per unit, the bill could top £1m if the NHSIA messaging forecasts are right.

An NHSIA spokesman said it intended to introduce electronic messaging next January. "People do have to buy an upgrade to comply with government standards," he said. "How and what they have to pay is the issue."

The proposed licensing change has sparked concern with the authority, which immediately requested negotiations with CDS. "We have asked the company to come up with variations on its pricing proposals," the spokesman said. "We are satisfied the negotiations are proceeding in good faith."

Steve Garrington, managing director of ACT Medisys which owns CDS, said significant software development was required and highlighted the fragmentary nature of NHS IT. "This is not a get-rich scheme," he said. "The timetable for the project is being driven by the messaging team [of the NHSIA], but there is no customer commitment [from the trusts] to it yet."

CDS plans to address user group meetings next month to explain the upgrade and its pricing policy.

Geoff Petherick, of the user group UKCMG, said the stiffing question would hinge on whether CDS was taking a risk with the new development. If there was little risk or software development, users should consider going to the Office of Fair Trading, he said. This had "saved half a dozen firms £1m each".

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