Trust writes off £18m on Cerner Millennium

The trust made the announcement yesterday. The £18m impairment was for the “carrying value” of the Cerner electronic patient record system – the accounting measure reflects a reduction in the book value of assets on the trust’s balance sheet.

In the case of the record system, which launched in June 2012, the trust has concluded following a review that the value of the system needed to be reduced.

The trust has spent £28.5m on the system, but concluded that it is now only worth £10.5m, leading to an £18m write-down in value.

HSJ understands this reflects a feeling in the trust that the system as implemented is not worth as much as it hoped when it committed the resources.

The trust stressed that the impairment would not impact its budget for 2013-14, as the impairment related to “historic costs”.

Although Cerner Millennium is available for less cost to the trust through the national programme for IT, the trust elected to procure the system independently.

Under the terms of the deal, Royal Berkshire bears the risk if the costs of running the system turn out to be more than expected. The trust had initially budgeted one per cent of its turnover - £3m a year – to pay for the running of Cerner Millennium, it was billed £7.4m for the first year. It is hoped that the cost will fall to £5m for 2013-14.

Chief executive Ed Donald said: “An electronic patient record once fully implemented will bring considerable benefits for all our patients and our staff. Our decision to implement a new records system was made for sound reasons with the interests and benefits for patients as the priority.

“However, development and deployment is a massive task and such systems are complex and challenging - as we have seen not just at the trust, but elsewhere within the NHS. Unfortunately, implementing the EPR system at Royal Berkshire has at times been a difficult process for our patients and our staff.

“Undertaking any large programme can lead to issues particularly in the initial stages and we acknowledge that we did not fully appreciate the challenges and resources required in a number of areas.

“We have learned important lessons and actively addressed the issues, leading to improvements in the performance of the patient record system.  The trust remains committed to reducing the EPR operating costs and to ensuring the system continues to improve and better serve our patients.”

The trust also announced write-downs of £6.3m relating to the value of its land and buildings, and a further £3m in the “carrying value” of other, now obsolete IT equipment.