The Department of Health’s stake in Dr Foster Intelligence could be sold following the announcement of a “strategic review” of options for the future of the enterprise.

The review, to be carried out by the DH, Dr Foster, and KPMG will value the joint venture, originally set up by the NHS Information Centre and Dr Foster, and consider who may be interested in buying the government’s stake.

Dr Foster Intelligence chief executive officer Tom Moloney told HSJ the new government’s emphasis on health information in last month’s white paper presented opportunities for the expansion of DFI, and the review would consider both the role that government part-ownership, and the consequent link with the NHS might play in this.

But he said there was no guarantee that the DH’s 48.75 per cent stake, which was transferred from the NHS Information Centre last month, would be put up for sale.

“Not all strategic reviews result in a sale,” he said.

In 2007 the National Audit Office criticised the Department of Health’s handling of the creation of Dr Foster Intelligence, concluding that the DH had overpaid by up to 53 per cent for its share of the joint venture.

The NAO report said the “only measurable benefit” of the deal to the NHS was a 50 per cent share of any future profits.

DFI posted losses in its first two years, and a profit of £2.6m in its third year (2008) with no dividends paid to shareholders.

Last year HSJ reported that the NHS Information Centre’s board had been told that its holding in DFI may be devalued on the Centre’s balance sheet due to the “existing economic and financial climate”, but no devaluation took place.

In its 2007 report, the NAO estimated the size of the health informatics industry at closer to £20m, in contrast with the £325m projected by advisers KPMG during contract negotiations for the creation of DFI.

For the year ending December 2009 DFI generated revenues of £22.1m.

The DH is due to publish its information strategy paper in the autumn, with the DFI review expected to be completed by the end of this year, or early next year.