Will health IT market “heat up” when NPfIT contracts expire?

By Tony Collins

At a second-quarter earnings call, Marc Naughton, Chief Financial Officer at US-based health software supplier Cerner, singled out the UK as one country where there will be probably be “a lot of demand” for new health IT products and services subject to capital being available.

He said,

“As more and more of those trusts are becoming foundation trusts, which means they control their capital outlet – outlay as opposed to the government putting the dollars out there – we think that’s going to turn into a more normalised US-type market where each trust is going to go out to the market and look to acquire technology.

“In 2015, the current NHS [NPfIT] contracts expire. So almost all of those trusts are going to be looking in the market in some form or fashion, probably depending on their access to capital.

“So we think that market is one that could heat up in 12 to 18 months from now, assuming that they can get access to capital. But it is going to be a little bit lumpy.”

 

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One response to “Will health IT market “heat up” when NPfIT contracts expire?

  1. This is probably an accurate observation on the part of Mr Naughton. Given the end point of NPfIT and the time it takes a Trust to go through procurement I would expect to see Trusts making moves towards new procurements within the next 6 months. Some have already started. This all bodes rather well for the market place, or does it?

    As suppliers who were not included as subcontractors in the original 5 LSP contracts we were all told by CfH to ‘find a new business as the National Programme will deliver all main line software and IT services’. Nearly 10 years down track the healthcare IT market has seen many companies do just that or go out of business, leaving only those suppliers who were involved with an LSP and a few others.

    So now the NHS is going to have to buy software locally that it was supposed to have been given free under the programme (in some cases 7 years late) which may or may not be fit for purpose or hope there are suppliers out ther who can do what they say. We are seeing savvy trusts flex the procurement process to drive prices down to astonishingly low levels which begs the question: why was it so expensive under the NPfIT?

    Those Trusts that do not see the end point of NPfIT and do not act quickly enough will find themselves paying inflated prices for support post contract. This has happened before, and no doubt it will happen again but this time on a larger scale and at a time when the NHS is expected to cut costs.

    The full cost of NPfIT to the nation and the health service has yet to be fully understood. Had the failures of the programme been reported in a timely manner or at all, had NHS staff been allowed to blow the whistle without fear of recrimination we would be in a very different place right now i.e. one where mega corps are not circling ready for another feeding frenzy.

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