Will a unified buying model be a panacea for NHS IT?

The Government is planning to deliver an ambitious new NHS IT procurement model by 1 April 2003. James Rogers looks at the...

The Government is planning to deliver an ambitious new NHS IT procurement model by 1 April 2003. James Rogers looks at the difficulties of improving technology procurement within the UK's largest organisation

The latest stage in the Government's ongoing campaign to improve public sector IT procurement was unveiled at last week's Healthcare Computing 2002 conference in Harrogate when a senior Department of Health (DoH) mandarin described an ambitious plan for buying IT in the NHS.

Sir John Pattison, director of research, analysis and information at the department, outlined the government strategy to build a streamlined NHS IT procurement model by 1 April 2003.

He said, "We will use April and May to develop standards and specifications, then we will work with the Office of Government Commerce (OGC) and the Office of the E-Envoy to streamline the procurement process for IT in the NHS."

This is a major undertaking since the NHS, which employs about 1.2 million people, is one of the largest organisations in the western world and uses a vast array of disparate IT systems. Devising a procurement model to fit an organisation as varied as the NHS is a potential headache on a number of levels, from technical issues through to sheer logistics.

Precise details on exactly what the new IT procurement model will entail have yet to be revealed although experts are already warning of the potential pitfalls for the NHS.

Murray Bywater, managing director of IT healthcare specialist Silicon Bridge Research, said, "There is a big difference between procuring Microsoft desktop products and the likes of electronic patient records systems, which are a combination of many different product elements, services, as well as change management."

We have got to wait and see, he added.

Bywater also voiced his concerns about the possibility that the new procurement model could exclude certain IT suppliers from the market. He explained, "It will be worrying if the Government were contemplating reducing the number of active players in the market because this could reduce available implementation resource at a time when it is already in very short supply."

It should also be noted that the health service, like much of the UK public sector, has been dogged by IT project problems.

In the early 1990s, for example, a centralised approach to rushed IT delivery hit the hospital information support systems initiative, losing up to £103m and prompting criticism from the House of Commons Public Accounts Committee.

Then there are the funding issues. Even the best-devised procurement model in the world will be rendered useless if inadequate funds are made available to develop IT.

Even Pattison acknowledged the importance of the funding question during his speech at the Harrogate event. "There needs to be a massive increase in the resources made available for implementing IT in the NHS," he said.

Investment in NHS IT has been inadequate even when compared with other health services and sectors, Pattison added.

In the NHS, however, the issue of funding is about much more than just making money available for IT. Even if the new procurement model is in place in 12 months time, NHS trusts could still face the ongoing challenge of balancing their budget for new IT systems with other healthcare demands.

The perennial problem for NHS IT managers is that scarce funds for building effective IT strategies, unless they are specifically ring-fenced, are often devoted to other more pressing concerns.

The simple fact is that problems such as winter bed crises often take precedence over IT. As one IT manager in a southern NHS trust attending the Harrogate conference explained, "There isn't enough funding basically." There are lots of priorities and IT is only one of them, she added.

In this way, the DoH certainly has its work cut out but at least it is drawing on expertise from right across government in the shape of the OGC and the Office of the E-Envoy. The OGC in particular is not afraid to buck the trend of government procurement and devise new models, such as the recent public sector-wide software deal with Microsoft, IBM/ Lotus and Sun Microsystems.

If the DoH is to follow suit, however, then it must pay close attention to the specific needs of NHS IT managers. Just as importantly, government officials should also be prepared to drive some very hard bargains with suppliers. Devising new procurement models is one thing, but making them work is something else altogether.

NHS organisations are already setting something of a precedent for using new forms of IT procurement. For example, five London hospitals recently banded together and signed a £3m contract with US banking and healthcare specialist Misys to deliver a new pathology IT system.

What is interesting about this move is that it highlights two growing trends in public sector IT. The first is a clear shift towards purchasing off-the-shelf products and the second is collaboration between organisations to achieve economies of scale from suppliers.

Whatever IT procurement model the DoH decides to implement by April 2003, ensuring the ability of NHS trusts to collaborate and use off-the-shelf products will be critical.

The Government, of course, feels that it has already proved its ability to roll out major IT projects such as the ground-breaking £325m NHS human resources and payroll system that was unveiled last year. The future, however, poses fresh technology challenges and any new IT procurement model must take this into consideration.

With speculation growing that next month's budget will be geared towards helping the cash-starved NHS, the Government could be in a good position to bolster the health service's IT. The long-term success of this, however, will depend in no small measure on appropriate procurement methods. Pattison's announcement is certainly a step in the right direction but the health service still has a long way to go.

Key dates in NHS IT procurement
March 2002
Government signs software licensing deal worth more than £9m with Novell in an agreement that is expected to save the NHS £18.5m over the next three years. The contract, which is available to all NHS organisations in England, is expected to cover about 100,000 desktops

Five London hospitals band together to sign a £3m contract with US banking and healthcare specialist Misys to deliver a new pathology IT system. The London hospitals deal will see Misys provide a single pathology system to the Hammersmith, Charing Cross, Chelsea & Westminster, Queen Charlotte's and St Mary's hospitals.

December 2001
NHS awards a £325m contract to a consortium headed by IT healthcare specialist McKesson to build a unified human resources and payroll system. The deal is part of the Shared Services initiative that was launched in October 1999 to make better use of NHS resources

October 2001
NHS signs a three-year software subscription contract with Microsoft. Government officials estimate that the deal will save the health service more than £50m over the life of the contract

January 2001
Government announces £851m boost for health service IT funding with the launch of the Building the Information Core - Implementing the NHS Plan strategy.

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