Category Archives: NHS

Why hospital IT needs airline safety culture

By Tony Collins

Earlier this month the pilots of a Boeing 787 “Dreamliner” carrying 249 passengers aborted a landing at Okayama airport in Japan when the wheels failed to deploy automatically. The pilots circled and deployed the landing gear manually.

A year ago pilots of an Airbus A380, the world’s largest passenger plane, made an emergency landing at Singapore on landing gear that they deployed using gravity, the so-called “gravity drop emergency extension system”.

In both emergencies the contingencies worked.  The planes landed safely and nobody was hurt.

Five years earlier, during tests, part of the landing gear on a pre-operational A380 failed initially to drop down using gravity.

The Teflon solution

The problem was solved, thanks in part to the use of Teflon paint (see below). Eventually the A380 was certified to carry 853 passengers.

Those who fly sometimes owe their lives to the proven and certified backup arrangements on civil aircraft. Compare this safety culture to the improvised and sometimes improvident way some health IT systems are tested and deployed.

Routinely hospital boards order the installation of information systems without proven backup arrangements and certification. Absent in health IT are the mandatory standards that underpin air safety.

When an airliner crashes investigators launch a formal inquiry and publish their findings. Improvements usually follow, if they haven’t already, which is one reason flying is so safe today.

Shutters come down when health IT fails 

When health IT implementations go wrong the effect on patients is unknown. Barts and The London NHS Trust, the Royal Free Hampstead, the Nuffield Orthopaedic Centre, Barnet and Chase Farm Hospitals NHS Trust and other trusts had failed go-lives of NPfIT patient administration systems. They have not published reports on the consequences of the incidents, and have no statutory duty to do so.

Instead of improvements triggered by a public report there may, in health IT, be an instinctive and systemic cover-up, which is within the law. Why would hospitals own up to the seriousness of any incidents brought about by IT-related confusion or chaos? And under the advice of their lawyers suppliers are unlikely to own up to weaknesses in their systems after pervasive problems.

Supplier “hold harmless” clauses

Indeed a “hold harmless” clause is said to be common in contracts between electronic health record companies and healthcare provider organisations. This clause helps to shift liability to the users of EHRs in that users are liable for adverse patient consequences that result from the use of clinical software, even if the software contains errors.

That said the supplier’s software will have been configured locally; and it’s those modifications that might have caused or contributed to incidents.

Done well, health IT implementations can improve the care and safety of patients. But after the go-live of a patient administration system Barts and The London NHS Trust lost track of thousands of patient appointments and had no idea how many were in breach of the 18-week limit for treatment after being referred by a GP. There were also delays in appointments for cancer checks.

At the Royal Free Hampstead staff found they had to cope with system crashes, delays in booking patient appointments, data missing in records and extra costs.

And an independent study of the Summary Care Records scheme by Trisha Greehalgh and her team found that electronic records can omit allergies and potentially dangerous reactions to certain combinations of drugs. Her report also found that the SCR database:

–  Omitted some medications

–  Listed ‘current’ medication the patient was not taking

–  Included indicated allergies or adverse reactions which the patient probably did not have

Electronic health records can also record wrong dosages of drugs, or the wrong drugs, or fail to provide an alert when clinical staff have come to wrongly rely on such an alert.

A study in 2005 found that Computerized Physician Order Entry systems, which were widely viewed as a way of reducing prescribing errors, could lead to double the correct doses being prescribed.

One problem of health IT in hospitals is that computer systems are introduced alongside paper where neither one nor the other is a single source of truth. This could cause mistakes analogous to the ones made in early air crashes which were caused not by technology alone but pilots not fully understanding how the systems worked and not recognising the signs and effects of systems failing to work as intended.

In air crashes the lessons are learned the hard way. In health IT the lessons from failed implementations will be learned by committed professionals. But what when a hospital boss is overly ambitious, is bowled over by unproven technology and is cajoled into a premature go-live?

In 2011, indeed in the past few months, headlines in the trade press have continued to flow when a hospital’s patient information system goes live, or when a trust reaches a critical mass of Summary Care Record uploads of patient records (although some of the SCR records may or not be accurate, and may or may not be correctly updated).

What we won’t see are headlines on any serious or even tragic consequences of the implementations. A BBC File on 4 documentary this month explained how hospital mistakes are unlikely to be exposed by coroners or inquests.

So hospital board chief executives can order new and large-scale IT systems without the fear of any tragic failure of those implementations being exposed, investigated and publicly reported on. The risk lies with the patient. Certification and regulation of health IT systems would reduce that risk.

Should health IT systems be tested as well as the A380’s landing gear? – those tests in detail

Qantas Flight 32 was carrying 466 passengers when an engine exploded. The Airbus A380 made an emergency landing at Singapore Changi Airport on 4 November 2010. The failure was the first of its kind for the four-engined A380.

Shrapnel from the exploding engine punctured part of the wing and damaged some of the systems, equipment and controls. Pilots deployed the landing gear manually, using gravity  – and it worked well. Despite many technical problems the plane landed safely.

Five years earlier, tests of a manual deployment of the A380’s landing gear failed initially. It happened in a test hangar, more than a year before the A380 received regulatory approval to carry 853 passengers.

The story of the landing gear tests is told by Channel 4 as part of a well-made documentary, “Giant of the Skies” on the construction and assembly of the A380.  Against a backdrop of delays and a budget overspend, Airbus engineers must show that if power is lost the wheels will come down on their own, using gravity.

The film shows an Airbus A380 suspended in a hangar while the undercarriage test gets underway. The undercarriage doors open under their own weight and a few seconds later the locks that hold up the outer wheels release. Two massive outer sets of four wheels each fall down through a 90-degree arc. Something goes wrong.  At about 45 degrees, one of the Michelin tyres catches on an undercarriage door which looks as if it has not opened as fully as it would have if powered electrically. Only after 16 seconds does the jammed wheel set slip free. Engineers watching the test look mortified.

Simon Sanders, head of landing gear design at Airbus, tells Channel 4: “We need to understand and find a solution.”

An engineer smeared some grease (Aeroshell 70022 from Shell, Houston) on a guide ramp where the A380’s wheels are supposed to push the door open in an emergency loss of power. This worked and the test was successful: the left-side outer landing gear doors opened under their own weight; a few seconds later the wheels fell down, also under their own weight, and this time the tyre that had jammed earlier hit the grease on the door and slid down without any delay. But a permanent solution was needed.

A month later Airbus repeated the undercarriage “gravity” test. Sanders told Channel 4: “We have applied a layer of Teflon paint which is similar to the Teflon coasting you have on non-stick flying pans. This will reduce the friction when we do the free-fall [of the undercarriage]. We are now going to perform the test to demonstrate that with this low-friction Teflon coating we have solved the problem.”

This time the A380’s chief test pilot Gérard Desbois was watching. If the wheels got struck again Desbois could refuse to accept the aircraft for its first test flight, which would mean a further delay.

The loss-of-power test began. The outer landing gear doors opened … the wheels fell down under their own weight … and jammed again. This time they freed themselves quicker than before. After some hesitation Desbois accepted the aircraft on the basis that if power were lost and the left outer landing wheels took a little longer to come down than the right outer set this would not be a problem.  The gravity free-fall backup system was further refined before the A380 went into service.

The importance of the tests was shown in 2010 when an exploding Rolls-Royce Trent 900 engine on an Airbus A380,  Qantas Flight 32 from Singapore to Sydney, caused damage to various aircraft systems including the landing gear computer which stopped working.  The pilots had to deploy the landing gear manually. The official incident report shows that all of the A380’s 22 wheels deployed fully under the gravity extension backup arrangements.

If a hospital board had been overseeing the A380’s tests back in 2005, would directors have taken the view that the test was very nearly successful, so the undercarriage could be left to prove itself in service?

For the test engineers at Airbus, safety was not a matter of choice but of regulation and certification. It is a pity that the deployment of health IT, which can affect the safety of patients, is not a matter of regulation or certification.

Links:

Oxford University Hospitals NHS Trust postpones major IT go-live.

Giant of the Skies – Channel 4 documentary on manufacture and testing of the Airbus A380

Why those driving the creation of public sector mutuals are Investors, not Conservers

By David Bicknell

All those considering setting up public sector mutuals like Hammersmith & Fulham  – and those in the middle of running successful mutual pathfinders such as Central Surrey Health – know the importance of investing in their vision and backing it.

That’s why I liked this piece by Craig Dearden-Philips, who while discussing third sector organisations, makes a distinction between Investors and Conservers.

“My guess though is that the people who make the biggest difference in the world , certainly socially, are almost all on Investors. These people are not ‘born’. They make a choice about how to live. They know that the Investment Principle works – and they live by it.

“Of course, Investment isn’t just a one way street. Investments frequently don’t pay off. In people, in relationships, in business. You get burned as much as you get it right. And investments that are not made judiciously, in people or ventures that are wrong to begin with, are not defensible either. Being investment-minded isn’t about being a soft-heart. But it is about understanding the powerful link between investment and reward and making this, somehow, a feature in the way you operate.”

Wise words.

The case for partnership between mutuals and the private sector

By David Bicknell

I mentioned yesterday ongoing discussions over the role of the private sector in partnering with mutuals.

There is more grist to the mill here in this blog by Craig Dearden-Philips who argues that “the next year or two is crucial. Partnerships appear to be a sensible way to press on beyond the first wave of early adapters.”

CSC’s chairman and CEO to retire

By Tony Collins

CSC’s chairman and CEO, Mike Laphen, is to retire within a year,  reports ComputerworldUK.com.

His announcement comes at a time when the company faces some of the toughest challenges in its history with a US SEC regulatory investigation, an accounting controversy and a legal challenge over its statements in relation to its work on the NPfIT.

Anthony Miller, chairman of analysts TechMarket View, said CSC has undergone several “meaning of life reviews” as contract margins have been squeezed.

CSC has yet to sign a new agreement with the Department of Health over the future of Lorenzo and its NPfIT work. CSC’s share price today is a little above its five-year low.

ComputerworldUK.com

Summary Care Record – an NPfIT success?

By Tony Collins

Last month the Department of Health briefed the Daily Mail on plans to dismantle the National Programme for IT.  The result was a front page  lead article in the Mail, under the headline:

£12bn NHS computer system is scrapped… and it’s all YOUR money that Labour poured down the drain.

The article said:

The Coalition will today announce it is putting a halt to years of scandalous waste of taxpayers’ money on a system that never worked.  It will cut its losses and ‘urgently’ dismantle the National Programme for IT…”

Now the DH has briefed the Telegraph on the success of  Summary Care Records, the national database run by BT under its NPfIT Spine contract.

So the Telegraph has given good coverage to the summary care records scheme.

By its selective briefings the DH has achieved prominent coverage in the national press for dismantling a failing £12bn NHS IT programme, and for modernising the NHS by successfully creating summary care records (under an IT programme that is being dismantled).

The DH’s officials know that the national press will usually give priority to off-the-record briefings by representatives of departments, especially if the briefing is in advance of the issuing of a press release. The Telegraph’s article was in advance of the DH’s publication of this press release.

Prominent in the Telegraph’s coverage was Simon Burns, the NPfIT minister, who in May 2011 spoke on BBC R4’s Today programme of the “fantastic” NPfIT systems [which are based on Cerner Millennium] at the Royal Free Hampstead NHS Trust.

Last week in his praise of summary care records in the Telegraph Burns quoted various medical organisations as supporting the scheme. Taken together the Telegraph articles depict the Summary Care Records scheme as a success – an important part of patient care and treatment.  Said Burns :

“Patient charities have seized on the Summary Care Record; a new type of national, electronic record containing key medical information, as a way of making sure the NHS knows what it needs to about their condition.

“Some of these groups have told us how this can sometimes be a real struggle. Asthma patients being asked to repeat their medical history when they are struggling to breathe. The patient with lung disease carrying around a wash bag with ‘Please make sure I take this medication’ written on it when they are admitted to hospital. Or even the terminally ill patient who ends up dying in hospital because their wish to die at home wasn’t shared with an out–of–hours doctor.

“Patient groups are recognising that one of the easiest and most effective ways of giving these patients a stronger voice is to use the record to tell the NHS the most crucial information about their condition.

“The record contains information about medications, allergies and bad reactions to drugs and is mainly being used by outof–hours GPs to provide safer care where no other information is available…

“Patients can speak to their GP about adding extra information that they want the NHS to know about them in an emergency to their record. The Muscular Dystrophy Campaign has urged their patients to do just this as the first group to recognise the potential of the Summary Care Record. Mencap, AsthmaUK, DiabetesUKand the British Lung Foundation are also raising awareness among patients about how the Summary Care Record can be used to improve and personalise the care they receive.

“Some seriously ill patients have added information about their end of life wishes to their record, helping to ensure that their wishes, typically to die at home, are respected.

“This is because information about their wishes can be shared with everyone, including, most critically, outof–hours doctors and paramedics, involved in their care.

“Some patients have voluntarily added ‘do not resuscitate’ requests to their records, which would be cross–checked against other sources of information at the point of care. Families and carers report that this has saved them and their loved ones much needless distress…”

The Telegraph noted that about 8.8 million people – a fifth of the total number of patients in England – have summary care electronic records. All 33.5 million NHS patients in England are being offered the opportunity of having the service, said the newspaper which added that only a “few” people have opted out. [About 1.2% have opted out, which is about double the rate of opt-outs in the early stages of the SCR programme.]

Comment:

When he meets his Parliamentary colleagues Simon Burns does not like to hear criticism of the NPfIT. He is earning a reputation as the NPfIT’s most senior press officer, which may seem odd given that the programme is supposedly being dismantled.

But Burns’ enthusiasm for the NPfIT is not odd.  He is reflecting the views of his officials, as have all Labour NPfIT ministers:  Caroline Flint, Ben Bradshaw and Mike O’Brien were in the line of Labour NPfIT ministers who gave similar speeches in praise of the national programme.

That Burns is following suit raises the question of why he is drawing a minister’s salary when he is being simply the public face of officialdom, not an independent voice, not a sceptical challenge for the department.

Burns and his Labour predecessors make the mistake of praising an NPfIT project because it is a good idea in principle. Their statements ignore how the scheme is working in practice.

The NPfIT’s projects are based on good ideas: it is a good idea having an accurate, regularly-updated electronic health record that any clinician treating you can view. But the evidence so far is that the SCR has inaccuracies and important omissions. Researchers from UCL found that the SCR  could not be relied on by clinicians as a single source of truth; and it was unclear who was responsible or accountable for errors and omissions, or keeping the records up to date .

Should an impractical scheme be justified on the basis that it would be a good thing if it worked?

The organisations Burns cites as supporting the summary care record scheme are actually supporting the underlying reasons for the scheme. They are neutral or silent, and perhaps unaware, of how the scheme is working, and not working, in practice.

That has always been the way. The NPfIT has been repeatedly justified on the basis of what it could do. Since they launched it in 2002, ministers and officials at the DH and NHS Connecting for Health have spoken about the programme’s benefits in the future tense. The SCR “will” be able to …

Hence, six years into the SCR,  the headline of the DH’s latest press release on the scheme is still in the future tense:

Summary Care Record to benefit millions of patients with long term conditions, say patient groups

Burns says in the press release that the SCR has the “potential” to transform the experience of healthcare for millions of patients with long term conditions and for their families and carers.

Caroline Stevens, Interim Chief Operating Officer at the British Lung Foundation says in the same press release that the SCR “will” bring many benefits for patients.

And Nic Bungay, Director of Campaigns, Care and Support at the Muscular Dystrophy Campaign says in the press release that his organisation sees the great “potential” for Summary Care Records…”

Summary Care Records – the underlying problems 

Shouldn’t the SCR, hundreds of millions of pounds having been spent, be transforming healthcare now? The evidence so far is that the SCR scheme is of limited use and might have problems that run too deep to overcome.

Trisha Greenhalgh and a team of researchers at UCL carried out an in-depth study of the SCR with funding from NHS Connecting for Health though CfH did not always  extend the hand of friendship to the team.

Greenhalgh showed a conference of Graphnet healthcare users at Bletchley Park code-breaking centre last year how the SCR scheme was entangled in a web of political, clinical, technical, commercial and personal considerations.

Quite how political the scheme had become and how defensive officials at the DH had been over Greenhalgh’s study can be seen in her presentation to Graphnet users which included her comment that:

“All stakeholders [in the UCL report] except Connecting for Health wrote and congratulated us on the final report.”

CfH had sent Greenhalgh 94 pages of queries on her team’s draft report, to which they replied with 100 pages of point-by-point answers. The final report, “The Devil’s in the Detail“, was accepted by peer review – though it later transpired, as a result of UCL investigations, that one of the anonymous peer reviewers was in fact working for Connecting for Health.

These were some of the Greenhalgh team’s findings:

– There was low take-up of the SCR by hospital clinicians for various reasons: the database was not always available for technical reasons, such as a loss of N3 broadband connection; and clinicians did not always have a smartcard, were worried about triggering an alert on the system, were not motivated to use it, or might have been unable to find a patient on the “spine”.  The  SCR was used more widely by out-of-hours doctors and walk-in centres.

– GP practices had systems that were never likely to be compliant with the Summary Care Record central system.

– The SCR helped when a record existed and the patient had trouble communicating.

– The SCR helped when a record existed and the patient was unable to say what multiple medications they were using.

–  There were tensions between setting a high standard for GPs to upload records or lowering standards of data quality to encourage more GP practices to join the scheme.

–  Front-line staff didn’t like asking patients for consent to view the SCR at the point of care. This consent model was unworkable, inappropriate or stressful.

–  There was no direct evidence of safer care but the SCR may reduce some rare medication errors.

– There was no clear evidence that consultations were quicker.

– Costly changes to supplier contracts were needed to take in requirements that were not fully appreciated at the outset of the programme.

– The scheme was far more complex than had been debated in public. Its success depended on radical changes to systems, protocols, budget allocations, organisational culture and ways of working. And these could not be simply standardised because nearly every health site was different.

So what’s the answer?

The SCR is an excellent idea in principle. Every out-of-hours doctor should know each patient’s most recent medical history, current medications and any adverse drug reactions.

But this could be provided locally – by local schemes that have local buy-in and for which there is accountability and responsibility locally. It can be argued that the Summary Care Record, as a national database, was never going to work. Who is responsible for the mistakes in records? Who cares if it is never widely used? Who cares if records are regularly updated or not? Why should GPs care about a national database? They care about their own systems.

It appears therefore that the SCR has benefited, in the main, the central bureaucracy and its largest IT supplier BT.  The SCR national database has kept power, influence and spending control at the centre, emasculating to some extent the control of GPs over their patient records.

The central bureaucracy continues to justify the scheme with statistics on how many records have been created without mentioning how little the records are looked at, how little the information is trusted, and how pervasive are the errors and omissions.

BT and DH officials will be delighted to read Simon Burns’ commentary in the Telegraph on the SCR. But isn’t it time IT-based schemes were unshackled from politics? DH press releases on the success of local IT schemes would be few and far between. But why should £235m – the last estimated cost of the SCR – be spent so that ministers can make speeches and be quoted in press releases?

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Head of NPfIT remains in post says DH

Sir David Nicholson, the Chief Executive of the NHS and Senior Responsible Owner [SRO] of the NPfIT, will remain as the programme’s SRO until the scheme is dismantled, the Department of Health said this week.

The DH’s statement contradicts a suggestion in the media that, as the NPfIT programme board has been disbanded, Nicholson is no longer the scheme’s senior responsible owner.

Had Nicholson stood down as the NPfIT SRO there would have been no direct accountable owner for the £4bn worth of contracts with local service providers BT and CSC, or the scheme’s remaining systems such as Choose and Book, the Summary Care Record and the data “Spine”.

A project’s SRO is held by Parliament to be the “business owner” of a central government project, the person responsible for the scheme’s results. Nicholson took on the job of NPfIT overall SRO when he accepted the appointment of NHS CE in 2006.  He has become the programme’s staunchest supporter.

A spokesperson for the Department of Health said: “We have already announced that we are dismantling the National Programme for IT and establishing new governance arrangements to support more local decision making.

“Sir David Nicholson will remain Senior Responsible Owner to ensure a clear line of accountability whilst this work is undertaken.”

It’s unclear when Nicholson will stand down as head of the NPfIT or whether he can be held accountable for the problems on the project under his leadership. In 2008 he declined to order an independent investigation into the NPfIT.

Nicholson tries to keep NPfIT alive.

NPfIT – criminal incompetence says The Times

By Tony Collins

In an editorial not everyone would have seen, The Times said the history of the NPfIT was “one of criminal incompetence and irresponsibility”.

The main leader in The Times on 23 September had the headline “Connecting to Nowhere”.

It said:

“The comically misnamed Connecting for Health will continue to honour its contracts with big companies and to swallow taxpayers’ money for some time to come: up to £11bn on current estimates. The figure demonstrates the truly egregious scale of the previous Government’s incompetence on this issue: this vast sum seems to have been committed irrevocably, even though the project has never achieved its objectives.

“The story is a dismal catalogue of naivity, ambition and spinelessness. NHS managers and officials …were [not] brave enough to question the direction of travel at crucial moments when IBM and Lockheed pulled out of the project early on. Whitehall was sold a grand vision by consultants, software and technology companies charging grandiose fees. It signed contracts that appear to have been impossible to break when the promised land did not appear. Yet no one seems responsible. No one has been sacked. Most of the officials involved have long moved on…

“There have been spectacular failures in the private sector too. But businesses, with tighter controls on spending, tend to halt things earlier if they are going wrong. Many prefer off-the-shelf systems such as SAP or Oracle, which are tried and tested. They know that it is cheaper to adapt their processes, not the software.

“This newspaper is in favour of serious investment in technology, which could play an important part in economic growth. The NHS debacle has done enormous damage to this country’s reputation for expertise in IT systems. The lessons for the future are clear. Governments must hire people who can make informed and responsible procurement decisions. Patients, in every way, are going to end up paying the price.”

A separate article in The Times 0f 23 September included comments by Campaign4Change whose spokesman said that if the Department of Health continues to spend money on NPfIT suppliers it will probably get poor value for money.

Comment:

Compare the remarks in The Times with those of David Nicholson, Chief Executive of the NHS and Senior Responsible Owner of the NPfIT who refused to agree to a request by 23 academics to have an independent review of the scheme. Nicholson could not contain his enthusiasm for the NPfIT when he told the Public Accounts Committee on 23 May 2011:

 “We spent about 20% of that resource [the £11.4bn projected total spend on the NPfIT] on the acute sector. The other 80% is providing services that literally mean life and death to patients today, and have done for the last period.

“So the Spine, and all those things, provides really, really important services for our patients. If you are going to talk about the totality of the [NPfIT] system … you have to accept that 80% of that programme has been delivered.”

It’s difficult to accept Nicholson’s figures. But even if we do, we’d have to say that the 20% that hasn’t been delivered was the main reason for the NPfIT: a national electronic health record which hasn’t materialised and isn’t likely to in the near future.

The contrasting comments of The Times and Nicholson’s are a reminder that the civil service hierarchy at the Department of Health operates in a world of its own, unanswerable to anyone, not even the Cabinet Office or Downing Street.

Can the Department of Health be trusted to oversee health informatics when it has such close relationships with major IT companies and consultants? While Katie Davis is in charge of health informatics there is at least an independent voice at the DH. But as an interim head of IT how long will she last? The DH has a history of not being keen on independent voices.

Nicholson: still positive after all these years.

NPfIT goes PfffT.

Beyond NPfIT.

Surge in tenders for non-NPfIT systems.

Investors’ writ against CSC on NHS contracts – more detail

By Tony Collins

The Guardian has published the 123-page writ against CSC by lawyers acting behalf of some of the supplier’s investors. The writ contains many allegations against CSC and named directors. The company’s response is that it is corporate policy not to discuss litigation.

The legal action appears to have been based, in part, on CSC’s poor share price, which is today near a five-year low, and the supplier’s repeated positive statements and assurances on the performance of its NHS IT contracts and its iSoft Lorenzo software

These are some of the claims made in the document:

– Lorenzo was originally designed by iSoft as a one-size-fits-all software for use in local medical practices. “However, the UK healthcare system is highly diverse, ranging from large university hospitals to small private medical practices to prison medical facilities. Thus, according to the Deputy Head of Testing for Lorenzo, Lorenzo was never the correct software for the job. Lorenzo therefore required significant development before it could be deployed throughout the UK’s healthcare system.”

– In September 2008, after years of delays in Lorenzo’s development [CSC] sent a Delivery Assurance Review Team to England to assess the development and testing of Lorenzo. In mid-September, the Testing Review Team met with the Deputy Head of Testing for Lorenzo, a CSC employee from December 2007 until April 2011. The Deputy Head of Testing told the Testing Review Team that the level of testing and test results for Lorenzo was “abysmal,” and that the various releases on which the project was based could not be delivered on time. Subsequently [a CSC employee] told the Deputy Head of Testing to “shut up,” which he took to mean that he should not further criticise the quality of the testing nor the testing results.

– The Deputy Head of Testing claimed that the Lorenzo software was rife with severe defects that were unacceptable under the NHS Contract. The Deputy Head of Testing said that the software defects were subject to the following ratings: Severity Level I: the defect cause important part of the Lorenzo system to fail. Severity Level II: similar to Severity I, but the defect has a workaround. Severity Level III: the defect is an important defect, but one that would not stop the system from functioning. Severity Level IV: defect is a minor defect and would not impact the Lorenzo system’s function, but would be a nuisance to a software user.

– According to the Deputy Head of Testing, throughout 2008 and 2009, the level of Severity I and II defects in every release of Lorenzo was “high and grossly beyond” what the NHS would accept. According to the Deputy Head of Testing, while CSC publicly reported that it had met certain delivery milestones and therefore could recognize revenue, CSC’s statements in this respect were misleading in view of the software defects detailed above.

– CSC said in November 12, 2008, when analysts asked about missed deadlines, that “Our confidence continues to build on the program. We are pleased with our progress.”

–  In financial statements CSC continued to assert that the NHS contract was profitable and the Company expected to recover its investment.

– Shortly before the Deputy Head of Testing retired from CSC in early April 2011, he sent an email directly to a CSC director, copying several other CSC executives, in which he said ‘You hope that you will succeed by August 2011. I do too but you won’t. The project is on a death-march where almost as many defects are being introduced as are being fixed.”

–  by 2006 CSC had determined that it had no believable plan for delivering on the NHS Contract and should not have booked revenue under the contract from that point forward.

– The significance of the NHS Contract to CSC “placed the project squarely in the spotlight of Wall Street analysts”.

–  CSC “continuously denied media reports critical of CSC’s performance of the contract”

CSC is expected to file its response to the allegations in due course.

CSC sued on losses over disastrous NHS contracts – Observer

CSC class action – document in full on Guardian’s website

CSC repays £170m to DH after non-signing of MoU

By Tony Collins

CSC reports today that it has repaid to the Department of Health £170m of a £200m advance it received earlier this year for NHS IT work that was due to be carried out under a memorandum of understanding.

The MoU was not signed as had been expected by 30 September 2011, so CSC has repaid the money.

But the Department of Health has entered into an “extended advance payment agreement” with CSC for £24m.

In a statement dated 3 October 2011 CSC has also disclosed that uncertainty continues over the future of its NPfIT contracts that are worth about £3bn.

It says that it is having a series of meetings with the NHS and Cabinet Office officials over the “next several weeks” and adds that: “there can be no assurance that the MOU [memorandum of understanding] will be approved nor, if it is approved, what final terms will be negotiated and included in the MOU”.

The statement relates to CSC’s negotiations with the Department of Health and the Cabinet Office’s Major Projects Authority over a draft memorandum of understanding that proposes cutting the cost to taxpayers of CSC’s contracts by about £800m but would cut back planned deployments of Lorenzo by nearly two thirds and could nearly double the cost of each remaining deployment. One Cabinet Office official has described the terms of the memorandum of understanding as unacceptable.

CSC says today that “progress is continuing in development and deployment projects under the contract in cooperation with the NHS, although progress has been constrained due to the uncertainty created by the government approval process”.

It adds:

“Humber NHS Foundation Trust has been confirmed as the early adopter for mental health functionality to replace Pennine Care Mental Health Trust, which withdrew as an early adopter in April 2011, and CSC and the NHS are preparing to formally document this replacement under the contract.

“On April 1, 2011, pursuant to the company’s Local Service Provider contract, the NHS made an advance payment to the company of £200m related to the forecasted charges expected by the company during fiscal year 2012.

“The amount of this advance payment contemplated the scope and deployment schedule expected under the MOU and the parties had anticipated that the MOU would be completed and contract amendment negotiations would be underway by September 30, 2011.

“… the advance payment agreement provided the NHS the option to require repayment of the advance payment if the parties were not progressing satisfactorily toward completion of the expected contract amendment by September 30, 2011.

“Because completion of the MOU has been subject to delays in government approvals and, as a result, contract amendment negotiations have not progressed, the NHS required the company to repay approximately £170m of the April 1, 2011 advance payment on September 30, 2011, and the company agreed and made the repayment as requested.

“Also on September 30, 2011, the NHS and the company entered into an extended advance payment agreement providing for an advance payment of approximately £24m to the company in respect of certain forecasted charges for the company’s fiscal year 2012.

“The extended advance payment agreement acknowledges that the company’s Local Service Provider contract, as varied by the parties in 2010, is subject to ongoing discussions between the parties with the intention of entering into a memorandum of understanding setting out the commercial principles for a further set of updated agreements.

“The company intends to discuss the extended advance payment structure and certain fiscal year 2012 deployment charges with the NHS in connection with the MOU negotiations.

“However, there can be no assurance that the parties will enter into the MOU or that the company’s forecasted charges under the contract for the remainder of fiscal year 2012 will not be materially adversely affected as a result of the delay in completing the MOU and the related contract amendment.”

Meanwhile some investors of CSC have taken legal action against the company.

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Investors sue CSC

By Tony Collins

The Observer reported yesterday that some CSC investors are suing the company, saying it was giving assurances about the “Lorenzo” software when it had been warned that the software project was on a “death march”.

According to the class action complaint, which was brought on behalf of a number of investors led by a major Canadian fund, the Ontario Teachers’ Pension Plan, CSC knew in May 2008, through reports and testing, that Lorenzo was “dysfunctional and undeliverable”.

The complaint cites one member of an internal CSC “delivery assurance review team” which visited the UK and India, where Lorenzo was developed, in early 2008.

He said the team were consistent in the message that CSC could not meet its deadline. “We could not deliver the solution set that we had contracted with the NHS.”

The review team member added that, at the time, “costs were building up on the balance sheet and the project was behind schedule”. The review team knew that the contract was a loser and CSC should have recognised a loss in 2008, according to The Observer, quoting the team member.

Lorenzo’s deputy head of testing told a second delivery review team that test results were “abysmal”. According to court filings, the test official was later told by his boss to “shut up”, which he took to mean he should no longer criticise testing.

Shortly before retiring in April this year, the deputy head of testing emailed CSC chief executive Michael Laphen saying: “The project is on a death march where almost as many defects are being introduced as are being fixed. Look at the defects reports.” Despite these internal concerns, CSC told investors that Lorenzo and CSC’s work for the NHS was on track.

Investors said they dismissed negative media reports on the basis of reassurances from CSC that the NHS work was on track, making significant progres in testing, and receiving positive feedback from the NHS. In response to press coverage, CSC is said to have told investors: “The press speculated wildly and inaccurately on the status of the NHS programme.”

CSC has made no statement.

Lorenzo is the main NPfIT product to be delivered and deployed to NHS trusts by CSC under contracts worth about £3bn. The Cabinet Office and the Department of Health are negotiating with CSC to continue or drop Whitehall’s commitments to CSC Lorenzo deployments.

CSC’s share price today stood at $26.85,  close to a five-year low.

Class action document – Guardian website

Simon Bowers’ article in The Observer