A few things done properly - and soon - is the short-term strategy for the NHS IT programme.Can it deliver this time? Jon Hoeksma reports

Published: 15/08/2002, Volume III, No. 5818 Page 14 15

The procurement strategy for the new NHS IT programme sets an eye-wateringly tight timetable for putting its key components in place.

Yet there is growing concern that IT investment is stalling on the ground - just as central government is preaching the urgent need to underpin modernisation with proper IT systems.The national programme focuses on doing a few things well. It aims to provide a broadband infrastructure and three core applications: electronic records, e-booking and electronic transfer of prescriptions.

Other IT developments such as specialist clinical and departmental systems and back office systems are not included.

Yet industry suppliers report that uncertainty about the scope of the new programme and anticipation of extra, centrally driven investment is slowing the market.

'We are seeing a rapid slowdown in business, ' a senior executive from one leading supplier told HSJ.

The official guidance from the Department of Health is that local development and procurements should continue.

The worry is that by 2003, when contracts from the national programme start to be awarded, many smaller suppliers may no longer be around. And in the meantime, NHS organisations will stagger on with their old systems.

Delivering 21st Century IT Support for the NHS sets out a radically new procurement strategy.

It pins its hopes on consortiums led by a new species of contractor - the prime service provider (PSP).

These are big technology firms with proven ability to implement systems and deliver services on a big scale.

The model has been borrowed from other areas of government and is intended to avoid the past fragmentation of NHS IT development. Industry veterans say there is no doubt it has been 'laid down by higher levels of government'.

There will be two breeds of PSP.

'Implementation' PSPs will be awarded contracts to work with strategic health authorities to implement core systems such as electronic records.

Their key tasks will be to integrate local systems with the three big national applications and to deliver the accompanying change management programme.

'Domain' PSPs will be chosen for national components of the strategy such as e-booking and infrastructure (the health records infrastructure will be delivered by the NHS Information Authority, which will also re-procure NHSnet).

Leading contenders to become PSPs are thought to include IT giants EDS and IBM. EDS already provides the Inland Revenue's IT services, where it is considered favourite to win a£4bn re-procurement.

'The big US companies think much more aggressively and are much more into government contracts, ' one industry insider says.

According to the Delivering 21st Century IT Support for the NHS timetable:

nThe first wave of SHAs will begin implementation in November 2003.

A major fly in the ointment is likely to be the need for PSPs to sub-contract with all the specialist system suppliers in the consortium they lead, and to take over all existing contracts in place locally.

In addition, a raft of work on specifying core national standards accrediting systems suppliers must also be completed nationally.

There has already been some slippage, as the original intention was to go to OJEC in June and make selections by August.

'The official party only really starts when the OJEC procurement begins, ' says Angela Murray, head of business development with healthcare specialist McKesson.

Tony Eardley, chair of the Association for Information Management and Technology Staff, and director of the South Staffordshire health informatics service, feels that short-listing PSPs by next April will be tough. 'We do not even know what criteria they will be chosen on, ' he points out.

SHAs are given ultimate responsibility for delivery. They will be expected to manage local information management and technology development - working with one PSP - control the relationship with the PSP and manage IT investment funds.

However, few have yet appointed the new board-level chief information officers who will lead this work.

Sir John Pattison (see box) expects that groups of SHAs will move forward together in a series of waves. About 12 'clusters' are expected - including one covering all five SHAs in London.

The leading example of this approach is Blackberd, a collaboration of 12 Birmingham trusts to procure jointly an electronic patient record system.

Though this is seen as a trailblazer for the PSP model - Blackberd went to OJEC advertisement in June - the procurement is expected to take two more years to complete.

One chief executive of a health systems supplier points out that if there are three waves, beginning in November 2003 and spaced six months apart, many trusts and primary care trusts will not begin work on implementation until 2004-05.

He predicts this will lead to further uncertainty in the supplier market.

But iSOFT chief operations officer Steve Graham says the phased implementation timetable has credibility. 'It is a lot more realistic now.We can't all do this at once.'

He also feels the strategy can be delivered to schedule as long as there is 'sufficient procurement and contract management'.

To make sure it will fly, the programme is currently going through the Gateway review mechanism run by the Office of Government Commerce.

The Gateway system has been implemented across government to try and ensure better management of IT projects.

The NHS programme passed the first stage, gate zero, in June, after generating a number of 'comments'. Two further gates must be cleared for the procurement strategy to get the green light and for money to be committed.

Head of Silicon Bridge Research Murray Bywater says: 'This a relatively long game. If done well it will provide long-term modernisation goals over the next 10-15 years.'

This is made clear in the procurement strategy which says that 'a combination of local and central funding will be required for at least five - preferably 10 - years at guaranteed levels'.

Assuming the programme gets approval, the next 18 months will largely be taken up by procurement and appointing PSPs.

The most rapid progress is likely to be on e-booking and electronic transmission of prescriptions, both of which are mainly concerned with making NHS services more responsive.

In two years' time, if the government can say 'the key contracts are now in place and we have e-booking and electronic transfer of prescriptions in place', that could be enough to take them into the next election, says Mr Bywater. l SeeDown to the wire, page 18.