The Office of Fair Trading has launched an investigation which will examine the health service IT market.

The investigation will cover the supply of information and communication technology goods and services to the entire public sector but the watchdog singled out hospitals as a key area for its work.

The timing of the investigation is pertinent for acute trusts, which have been given until 2014 to devise plans on how they will deliver fully functioning electronic patient records systems.

OFT investigators will look at whether public bodies’ ability to drive savings is being damaged by a “high level of dependence on suppliers’ expertise”, the regulator said.

It will also consider whether some suppliers “seek to limit the interoperability and use of competitor systems with their own” – an issue for acute trusts looking to bolt on new functions to their existing electronic record systems.

OFT chief executive Clive Maxwell said: ‘This work demonstrates a continued focus by the OFT on markets related to public services.

“Information and communication technology is a crucial part of any modern economy and is key to improving productivity in public services as well as businesses.

“Given the vital role that this technology plays in the delivery of public services and the cost to the taxpayer, the OFT believes it is important to explore whether there are any restrictions on competition.”

An OFT statement added: “There have been many reviews of the procurement of ICT by the public sector yet few studies have examined whether aspects of the supply side of the market inhibit competition. The OFT’s review aims to address this imbalance.”

The deadline for responses is 18 August.

The OFT said it was particularly seeking information about:

  • The structure of the sector, for example the number of suppliers and their market share
  • Whether there are barriers to entry which make it difficult for smaller businesses to compete in this sector
  • Whether public sector users face high barriers to switching suppliers, such as costs of transferring and restrictive licence agreement
  • Whether some suppliers seek to limit the interoperability and use of competitor systems with their own
  • Whether outsourcing of ICT service provision results in a high level of dependence on suppliers’ expertise, undermining the ability of public bodies to drive value for money over time.

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