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.