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EXCLUSIVE: DH could face probe over IT deal

The Department of Health could face a fresh probe by a government spending watchdog after its latest attempt to dismantle the National Programme for IT sparked allegations of anti-competitive behaviour.

HSJ has learned Public Accounts Committee chair Margaret Hodge is considering a new probe into the NPfIT after concerns were raised over the nature of the DH’s recent deal with IT provider CSC.   

There is no suggestion of improper behaviour by the company. However, a spokeswoman for Ms Hodge told HSJ she was “aware” of issues surrounding the deal and the National Audit Office was “looking to see whether it is something that the PAC should reopen”.

Ms Hodge’s intervention follows the DH announcing in September it had struck a deal with CSC to terminate its exclusive right to be the only provider of clinical IT systems in the north, Midlands and east of England it had been given under the NPfIT.  

But despite terminating these exclusive rights, the DH said trusts in the region that buy CSC’s electronic patient record system, Lorenzo, would have “access to centralised support and funding”.

The DH refused to disclose details of the “support” but HSJ understands it runs to millions of pounds and – crucially – trusts that buy a rival system will not be eligible for similar financial support (see box below).

HSJ understands rival IT companies have sought legal advice about whether this contravenes competition law.

Concerns have been raised about the deal by Richard Bacon, a member of the PAC who played a prominent role in the committee’s reports on the NPfIT and has also been critical of the Lorenzo system in the past.

Mr Bacon said: “I am not a lawyer but I would be pretty unhappy if I was one of CSC’s competitors.

“I would have thought there would be a potential case for legal action on the grounds that it is anti-competitive behaviour.”

The MP for South Norfolk said he would be “surprised” if trusts agreed to take Lorenzo, despite the financial incentive.

“It’s received wisdom that most hospitals will want to see it put in somewhere else successfully before they take it themselves. The money is a small amount compared to the cost of such an IT system going wrong,” he added.  

Last month the DH refused to disclose any details of how the deal would work to HSJ citing commercial confidentiality.

One rival to CSC, Cerner, said it was “concerned” about the deal.

Cerner head of corporate affairs Simon Hill said: “We are concerned to hear reports that NHS managers might be encouraged to sacrifice long-term strategic IT decisions and opt for a system that is unfinished and unproven in order to access short-term cash incentives but until we understand the nature of any agreement, it would be inappropriate to speculate.

“Nevertheless, we will continue to work closely with the government to champion the most appropriate technology for the NHS and its patients.” 

HSJ has invited CSC and the Department of Health to comment.

The CSC deal: dealing with the NPfIT legacy

Healthcare IT firm CSC had exclusive rights to be the only provider of clinical IT systems in the north, Midlands and east of England under the National Programme for IT (NPfIT).

As part of the government’s “commitment to dismantle the NPfIT”, the DH announced on 4 September it had struck a legally binding agreement with CSC, suppliers of the Lorenzo healthcare IT system, to end that arrangement.

“Under the new agreement, CSC’s exclusive rights to be the only provider of clinical IT systems in the North, Midlands and East of England have been removed,” said a DH statement.

The department said the agreement would give trusts “the power to make their own decisions about which IT systems they use” and save £1bn which would be ploughed back in the NHS.  

While CSC’s exclusive rights have been revoked, it appears the company is still to be given preferential treatment for deals in the region under the arrangement it has struck with DH.

The DH statement said: “CSC will retain responsibility for rolling out their Lorenzo electronic patient record system, currently being used by 10 NHS organisations in the north, midlands and east of England, to the NHS.

“If eligible local NHS organisations wish to use Lorenzo they will be able to access centralised support and funding but will first need to develop a robust business case and demonstrate value for money in order to gain approval to do so.”

It is this offer of “centralised support and funding” which has sparked the controversy and leaves the DH facing a potential probe from the Public Accounts Committee.

Readers' comments (10)

  • This will be because of volumetric penalties in CSC's contract if the NHS don't identify Trusts to take their product.

    Looks like the cost of the penalties is higher than paying Trusts £1M each, so the logic runs that it would be better to pay incentives to get something than having to pay out more and getting nothing.

    However you play it though, the person who agreed the original contract needs a good kick in the backside.

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  • Let's face it, ne self-respecting CEO/FD/CTO is going to go near this.

    Imagine you are walking into a shop with the intent to buy an expensive, but necessary, household appliance. You've budgeted for the expense and now just want to make sure you get the appliance that is right for you.

    The shopkeeper says -'Well, I tell you what, there's lots of good stuff out on those shelves that you can trust to do the job, they are reliable and competitively priced but....if you take this one of my hands - (reaching under the counter) - which to be fair hasn't had great reviews, seems to be lacking in significant areas, will need huge aounts of your time to get up and running, and will likely need expensive maintenance and replacing pretty quickly, I'll give you a tenner...'!

    Who takes the tenner?

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  • Unfortunately Anonymous 1:53, in many areas in the recent past PCT IT have taken the tenner and lumped surgeries with barely fit for purpose systems, essentially because they were notbeing held to account for the budget in any meaningful manner

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  • We were one of the system suppliers that was replaced by the Lorenzo system in the Midlands.

    However, I am pleased to say that we have survived NPfIT by diversifying and our future providing quality systems to the NHS is looking better than ever.

    When one of those Trusts needs to replace their Lorenzo system (when the funding runs out), we will look forward to talking to them!

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  • To be fair 2:29, as independent contractors, GPs always had the option to purchase their own system if they wished with their own cash. If they were prepared to put up with a grot system just because the PCT paid for it, that's their lookout.

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  • Actually Anonymous 1:53 : you could look on it as "you go into PC Wizard and they say 'we are doing a promotion of any laptop for £400 but the Lorenzo laptop also comes with a FULL service and parts guarantee for 5 years.. I think there would be takers. Of course, it MIGHT be uncompetitive

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  • I have to say the quality of the discussion in these comments is indicative of the quality of understanding of Information Systems issues in the NHS generally; Not good!

    All the Directors of Informatics in trusts in the North Midlands and East that I know of are starting from a pretty hard eyed view of what Lorenzo will deliver compared with other systems. They are all making efforts to enagage their clinical leaders in the review. Many are saying that Lorenzo will now do the job that is needed. Some are saying not. All will be aware of the irony of Cerner's comments on Lorenzo as being "a system that is unfinished and unproven"

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  • I might be being extremely naive, but why not let patients hold their own information digitally, eg. on a mobile platform or in 'the cloud'. They can then give permissions for those who need to see the information, those who need to use it etc on a prioritised basis. You would not then need huge IT infrastructure, or is it too simple??

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  • 12:08 - I think you may have missed the point being made by your fellow commentators. I do not think anyone has commented on the functionality of Lorenzo. It is a system that is centrally funded. It is also expensive as no market forces come to play here. But if a Trust is not paying who cares?

    We will see how long Lorenzo survives once the funding plug is pulled. I would not put money on it.

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  • Test

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