With the main clinical software supplier for the south of England replaced before it could deliver any new systems, the implementation of the£62bn IT modernisation project is looking fragile, says Jon Hoeksma. With additional reporting by Linda Davidson Dropping a key supplier less than 18 months into a hugely complex IT project is a hard-nosed move; a gamble that an alternative supplier can do better without charging the earth. And of course there is always the risk that deadlines will go out of the window.

But this is exactly what has happened in the south of England under the£6.2bn NHS IT modernisation project where IDX, the main clinical software provider, has been replaced before it has delivered any new systems.

IDX was to have supplied its Carecast electronic patient record system that - when connected to the national NHS spine - would form the local component of the NHS care records service, the key project in the NHS IT modernisation programme.

The dramatic move came after Connecting for Health, the agency responsible for delivering the NHS IT programme, had confirmed that the South was already nine months behind schedule. Though a contract remains to be signed, it looks as though IDX will be replaced by Cerner, another US firm. Cerner already provides the software behind the national choose and book electronic appointment service.

Officially, the decision to drop IDX as a sub-contractor was taken by Fujitsu, which in January 2004 was awarded a£896m contract to deliver new IT systems across the South.

Four further local service provider contracts were awarded: to CSC for the North West and West Midlands, BT in London, and Accenture in the North East and East.

NHS IT director general Richard Granger has been threatening to wield the axe for months. In March Granger put suppliers on notice: 'If they can't do the job they will be replaced. We will not wait around for years waiting for them to fix it.' Crucially, the five LSP contracts were awarded to heavyweights from the world of professional and technology services rather than the specialist clinical software firms NHS trusts have traditionally signed deals with in the past.

What the Department of Health bought from the LSPs, which subcontracted with specialist suppliers, is a trade-off on risk. Put simply, they only get paid when they deliver working systems fit for purpose.

'One of the things that is fundamentally different is that we are not paying for their failure, ' Mr Granger recently explained.

The scale of the financial risks these corporations had signed up to became clear in April when Accenture reported that implementation delays would see it make estimated losses of£62m-£82m in this fiscal year on its two NHS contracts. The company's shares fell sharply.

Though Connecting for Health can justifiably boast that it has not paid for failure, the move is not without costs. Over the past year staff from NHS organisations in the South have spent hundreds of thousands of man-hours planning for a system they will now not get.

One hospital IT director in the region said replacing IDX raised questions about the judgement of the national programme, which was meant to have tested all software before awarding contracts. After the Fujitsu contract was signed it was decided to replace IDX's Lastword software with its new Carecast record system, unproven in the UK.

Replacing IDX will also do nothing to claw back lost time. One hospital IT director in South East said: 'They talk officially about nine months' delay. But I think It is going to be at least 12 more months even for a limited introduction, and there is plenty of scope for further slippage.' Confusingly, BT was also to have used Carecast as a 'common solution' for London as well as across the south on behalf of Fujitsu. The system is still intended for use in London - so it will no longer be possible to achieve the same massive economies of scale that had been hoped.

Another consequence is that a programme meant to deliver 'ruthless standardisation', using IDX software in the South and London, and iSOFT software in the rest of England, is now likely to have three main clinical systems. Differences between each region have become more evident.

'Clearly all the local service providers have a different style, approach and timescales they are working to, ' says NHS Confederation policy manager Gary Fereday.

'Geographical location is an issue.' Lengthy delays in implementation have been officially acknowledged in London. Problems in the capital mounted in April when the programme's regional implementation director David Kwo was suspended and then resigned.

The greatest progress has been made in the North West and West Midlands, which has begun ten implementations of new departmental systems, such as theatres and A&E, and patient administration systems. A variety of implementations have also occurred across the East and North East.

Nationally, concerns remain about the central NHS data spine, which will identify and authenticate staff before they can access new computer systems. Some 25,000 clinicians are now registered to use services connected to the spine.

The spine is critical to the planned national system, crucial to identifying patients and intended to provide a national clinical records database covering almost everyone in England.

Early implementation sites have reported persistent problems with reliability and response times of spine services.

In May the programme said it had advised its suppliers to develop stand-alone versions of their clinical systems so they would not have 'to interrupt their implementation programme to take the next version of the spine until required'.

GP clinical advisor to the programme Dr Gillian Braunold said delays were simply a feature of a project as complex as the NHS IT programme. 'If we didn't have delays of a couple of years with a project of this size I would be concerned.' One well-placed senior NHS IT manager predicted that although the programme is meant to deliver electronic care records to everyone in England by 2010, this was extremely ambitious and unlikely to occur by 2015 at the earliest.

While acknowledging there will be problems, Connecting for Health remains bullish. A growing number of sites now have choose and book, but because few hospitals are making clinics available electronically only been about 1,000 bookings have been made.

The national programme's original business case envisaged 250,000 electronic bookings by the end of 2004, although the roll-out plans have since been changed. It is unclear how widely the system will be able to support patient choice by the end of 2005.

Two pilot sites for electronic transfer of prescriptions between GPs and pharmacies are working, and a new system for ensuring GPs get paid and measuring their quality of care has gone live. The next big step for primary care will be electronic GP-to-GP record transfers.

There has also been solid progress in putting IT infrastructure in place, with over 7,000 NHS sites now equipped with the new N3 broadband connections. In addition, work has now begun to implement picture archiving and communications systems (PACS) at the first two sites at Hillingdon and West Dorset.

At a joint British Medical Association and Connecting for Health conference, Ian Cowles, Connecting for Health's group director of implementation, said his organisation was switching on new systems every day of the week.

But BMA IT committee chair Dr John Powell said: 'The impression is that there has not been a great deal of implementation in secondary care.

We are not yet at the point where the programme has delivered benefits to patients on any significant scale.'

Part of the problem is that the IT programme is based on standardising hospital systems by gradually levelling up all NHS trusts, providing them with successive releases of software that over the next decade will become more and more sophisticated. The first 'releases' of this software largely focus on patient administration rather than electronic patient records, ordering tests or electronic prescribing.

For hospitals with little clinical IT this should be invaluable. But for those that have already invested in clinical systems, particularly electronic patient records, it is likely to be several years before they get replacement systems significantly better than those they have already.

'The situation seems to depend on where they were as a trust already.

Some trusts are saying they feel a little hamstrung and held back, ' says Mr Fereday. 'Other members, such as mental health trusts, feel there has not been much focus on their needs.' A key challenge remains to get all senior NHS managers to invest in, plan for and begin to adopt new technologies at local level. Mr Granger recently told the Financial Times: 'I would like to get my colleagues focused on their obligations as well.' Many of the new systems require significant local investment. To get a new PACS system through the national programme, for instance, a hospital trust has to make a major ongoing revenue commitment.

Dr Braunold predicts that implementation was about to accelerate rapidly. 'It is vital that both clinicians and NHS managers are involved and understand the impact IT modernisation will bring. We can't function any more without it.' Efforts to win over clinicians and managers have been redoubled. New clinical leaders and advisory groups have been appointed, and a recent joint conference was held with the BMA. 'The programme has now recognised the importance of engaging the clinical community, ' said conference co-chair Dr Powell.

A full-time NHS implementation lead has at last been appointed. Richard Jeavons, previously chief executive of West Yorkshire SHA, replaces Alan Burns, chief executive of Trent SHA.

According to early results from the NHS Confederation's latest poll, most chief executives now feel quite positive about the programme and are confident it will deliver benefits. 'Our poll seems to suggest a fairly good level of support, though it is still identified as a key risk, ' said Mr Fereday.

He added that some of the NHS IT directors polled had more specific reservations. 'There were some serious concerns about the ability of the local service providers to deliver what they say they are going to.' Dr Braunold predicts that the programme is now shifting up a gear. 'The beginning of deployment is inevitably very slow, but then we will begin to move very quickly.' For Dr Powell the test of success remains simple. Until the majority of clinical staff start seeing benefits to patients, it is still going to be early days for implementation.' He adds that the key systems for delivering benefits to patients and change clinical practice are PACS and integrated electronic records. 'This has to work; it has to happen. There is no alternative if we are to have a 21st century NHS.' l