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.