By Tony Collins
CSC has told investors that its discussions with the UK government on an interim agreement for deploying Lorenzo to the NHS are “continuing positively”.
CSC says that an agreement could commit a certain number of NHS trusts to take Lorenzo. Some of those trusts would be named in the interim agreement and the remainder within six months. CSC refers to them as “committed named trusts”.
[Such a legal commitment for named NHS trusts to take Lorenzo may run counter to the post-NPfIT coalition philosophy of giving trusts the freedom to buy what they want, when they want, and from whom they want. The named trusts might have indicated on a DH questionnaire a wish to take Lorenzo but an agreement between the government and CSC would commit the trusts irrevocably, or the DH could have to pay CSC compensation for non-deployment.]
CSC says the deployed product would be categorized as “base product” or “additional product” for pricing purposes. The DH would commit money to the base product. Other funds would be available centrally available for “additional products, supplemental trust activity and local configuration”.
The DH would give CSC a structured set of payments following certain product deliveries, as well as additional payments to cover various deployments for the named trusts and payments for work already performed.
If the government does not sign a new deal, and allows CSC’s existing contracts to run down until they expire formally in 2015, this could keep further NPfIT-related costs to the taxpayer to a minimum. But it risks legal action from CSC, which says the NHS contract is enforceable and that the NHS has no existing right to terminate the contract, unless for convenience (which is unlikely).
If the government had terminated CSC’s contracts for its convenience (as opposed to alleged breach of contract) it would have had to pay CSC a termination fee capped at £329m as of 29 June 2012. CSC would also have been entitled to compensation for the profit it would have earned for the 12 months after the contract was terminated.
If the contract is not terminated, a new deal not signed, and no legal action is taken by either side, the amounts the UK government would have to pay CSC are likely to be minimised. It is in CSC’s interests to maintain and enhance Lorenzo for those NHS sites that have deployed it.
So will the government sign a new deal with CSC at least to reduce the risks of CSC legal action? Or could the government hold out not signing any agreement until expiry of the contracts in 2015 on the basis that CSC has not delivered all it promised?
If a new deal is signed – and CSC indicates that an agreement is likely – the government may face accusations that it has broken its undertaking to dismantle the NPfIT.
David Camerson intervened personally to have the Cabinet Office’s Major Projects Authority look closely at NPfIT commitments. His “efficiency” minister Francis Maude is likely to resist the signing of any new agreement
But will CSC accept the government’s refusal to sign a new deal, when such a deal could enable CSC to recover at least some of the $1.485bn (£0.95bn) it recorded as an NPfIT contract charge in the third quarter of 2012?
Posted in CSC, e-health, Government IT, health, health records, NHS, npfit, supplier relationships
Tagged Cabinet Office, CSC, Efficiency and Reform Group, Francis Maude, government IT, NHS, npfit
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.”
By Tony Collins
An NHS Trust has paid £1.8m for the “Rio” patient record system and a host of extras – which raises fresh questions about why the Department of Health paid BT £9m for each Rio deployment under the NPfIT.
BT’s deal with the Department of Health under the NPfIT costs taxpayers £224.3m for 25 deployments of Rio – about £9m for each one. The deal included support for five years, until October 2015.
But a deal struck directly between Cambridgeshire and Peterborough NHS Foundation Trust and Rio’s supplier CSE-Healthcare Systems includes support for a year longer – six years in total. At £1.806m the cost of Cambridgeshire and Peterborough’s deal is about 20% BT’s price.
Cambridgeshire and Peterborough has secured more extras. CSE-Healthcare Systems will supply Cambridgeshire and Peterborough with:
– Medical software development services
– Software consultancy services
– Computer support services
– System implementation planning services
– Software implementation services
– Project management consultancy services
– Business and management consultancy services
– Medical software package
– Database and operating software package
– Information systems and servers
– Computer and related services
– Software support services
It’s not clear though whether the deal includes disaster recovery – which the Department of Health argues is one reason for the price paid to BT for Rio.
Comment:
Disaster recovery does not explain how or why the Department of Health agreed to pay BT five times more for Rio than paid by Cambridgeshire and Peterborough.
What is not in doubt is that if BT, like Accenture and Fujitsu before it, had left the NPfIT, the programme would have been indelibly stamped a disaster – at a time when the Department of Health and ministers were proclaiming it an unacknowledged success (in the run up to a general election).
Was BT paid a hugely costly premium to stay in the NPfIT? If so, should tax money have been used to secure the affections of a supplier whose profits were otherwise being squeezed on the contract?
Last year the Department of Health gave the Public Accounts Committee an explanation of its Rio payments to BT, some of which is below. The explanation is long, vague and defensive enough to sound like the excuses of a young boy who, when questioned by his teacher, gives various accounts of why he took a classmate’s sweets.
What the DH told MPs
This is what the DH told the Public Accounts Committee last year, after one of its MPs Richard Bacon queried the payments to BT for Rio (and Cerner).
“Assessing the value for money of the RiO prices was part of the CCN3 [change control note 3] negotiation process … The CCN3 negotiation process was lengthy and involved many iterations challenging the component parts of the BT cost model. This included ensuring that rates offered were competitive and that the effort ascribed to various activities was justifiable.
Taken together, competitive rates and reasonable effort comprise value for money. BT was required to provide numerous iterations of financial models. These models were reviewed in detail by the Authority, resulting in multi-million pound savings.
The Authority negotiated reduced day rates on all of the BT labour within the contract. In addition, BT’s profit margin on the contract was also significantly reduced. Other commitments were also obtained by the Authority, in particular around sub-contractor pricing; for example, Cerner has confirmed that the pricing provided to the Authority (via BT) is the best it provides to any of its customers.
The Authority then requested further financial assurances and agreed with BT that a requirement of signing CCN3 would be that a verification exercise would be conducted by third party, independent financial experts (KPMG)…
In October 2010 KPMG were requested by the Authority to verify the costs presented by BT, including those for RiO, in the CCN3 Financial Model.
The approach adopted by KPMG was as follows:
— Their work focussed on the Cost Data sheet within the CCN3 Financial Model and was conducted on a sample basis, designed to provide a high coverage of costs with a reasonable sample size.
— The cost elements for potential duplicate entries were reviewed.
— The cost rates associated with BT labour were validated to cost rate cards and payroll records.
— The hours presented in the Model associated with BT labour were reviewed for reasonableness.
— Sub-contractor and other supplier costs were validated to the agreements entered into by BT with their suppliers.
— Cost elements and supporting documentation requested from BT were sampled to substantiate the costs provided…
On 3 November 2010 KPMG concluded that “BT has provided underpinning evidence to support the agreed delivery costs” and that “no proposed adjustments are required for Agreed Delivery Costs”.
None of the trusts consulted had purchased the same RiO product offering and all trusts varied significantly from the offering provided to NPFIT trusts, making a direct price comparison difficult. However, trusts within the programme typically had significant advantages to those outside the programme, namely:
— The ability to influence the functionality of the product.
— Centrally provided and hosted hardware.
— Centrally-provided disaster recovery with 100% capacity and availability.
— No additional development costs for subsequent releases.
— Spine connectivity.
BT estimate that the monthly charge for hardware, disaster recovery, service management and Spine connectivity to be in the region of £42,500 per month or just over £2 million of value over a 48 month contract term.
Furthermore the NPFIT investment in the development of the RiO has significantly enhanced the functionality of the product to the benefit of all trusts. Examples of functionality in the latest deployed version (v5) and soon to be deployed (R1, 2011) of RiO include:
— Standard assessment forms.
— Care-plans and reports.
— Spine connectivity, enabling integration with central demographics services, and functionality to support smart cards and role based access controls.
— Waiting lists.
— Results reporting.
— Prevention, screening and surveillance.
— SNOMED.
— Inpatient prescribing.
— Functionality to support multi-disciplinary care planning.
DH statement to MPs on Rio (and Cerner) prices paid to BT
Posted in BT Health, Government IT, health records, NHS, npfit, public sector, public services, supplier relationships
Tagged npfit
By Tony Collins
When a passenger jet crashes, if the airline’s next board meeting barely mentions it, and instead discusses a catering award and a staff survey, those booked on flights with the airline may have cause for concern.
So should patients at Imperial College Healthcare Trust be concerned that the trust has not mentioned in its latest published board papers a blunder that led to the Trust’s losing track, for nearly a year, of hundreds of patients with possible cancer?
The Department of Health requires that patients who go to their GP with symptoms that may indicate cancer are seen by a specialist within a maximum of two weeks.
Records incomplete
But Imperial has lost track of an unknown number of patients who went to their GPs with signs of possible cancer. It has been checking 900 hospital records which it found were incomplete.
For some of the patients the blunder won’t matter: they will have been called by staff at GP practices, some of whom have systems that track patients under the two-week rule.
But some patients might have slipped through the net and not been alerted by Imperial to their urgent appointments. Imperial has no clear idea how many.
It has asked GP organisations for help in contacting patients, their carers or representatives, to‘ascertain whether the patient has received treatment or still requires treatment’”.
What detail has emerged on the problem has come not from Imperial but from NHS North West London which is a single management team that represents eight PCTs. NWL covers St Mary’s Hospital, Paddington, Hammersmith Hospital and Charing Cross Hospital, which are all managed by Imperial.
“Substantial concern”
NWL has what it calls “substantial concern” about the problems at Imperial. In addition to the problem reporting its two-week cancer waits, the Trust is trying to clear a backlog of patients who have waited more than 18 weeks from referral to consultant-led treatment.
“Systematic failings”
NWL executives report that Deloitte has carried out an external audit and “concerns remain about record keeping at Imperial”. The executives say that “systematic failings” have been identified which will take time to resolve. This issue will be given close attention in the coming year, says NWL.
Patient safety an issue?
NWL also says that a “Clinical Review” is being carried out and a panel is being set up to look at the clinical issues that have arisen at Imperial. “The Director of Nursing confirmed that the clinical review would look at all patients affected by the problems at Imperial …”
In contrast to the concerns about Imperial’s performance among London PCTs, Imperial seems a little surprised that we are even investigating the problems.
“The problems are administrative and nothing to do with IT,” said a spokesperson.
The Trust is right. The problems are nothing to do with IT. And yet the problems may be everything to do with IT. Appointments for patients with possible cancer have not been entered onto IT systems – and where they have, data has been incorrect, entered into duplicate records, or not followed up to check appointments were kept, or the patient seen for treatment and investigations.
Eye off the ball?
For nearly a year the problem was not spotted, which has left some North West London executives wondering how it could have happened. It is known the Trust has devoted time and attention of senior management to a replacement of existing systems with Cerner, under the National Programme for IT. Has the Trust taken its eye off the ball while making plans for Cerner?
Some working in the NHS may ask whether it was more important for the Trust to have ensured that appointments for possible cancer were entered correctly onto existing systems, and routines written into software to provide alerts when cancer records were not closed off, or were incomplete.
**
Below are some of the comments of NWL PCTs about Imperial’s problems. Their concerns raise questions about whether the Trust’s processes and administration are stable enough for a transition from existing IT to new systems, which could cause further disruption.
These are some NWL statements in its board papers relating to Imperial:
“It was reported that at Imperial, the calculations of the backlog of referrals had been completed and work is underway to clear the backlog. However Deloitte has carried out an external audit and concerns remain about record keeping at Imperial. Systematic failings have been identified which will take time to resolve. This issue will be given close attention in the coming year.
“A Clinical Review is being carried out and a panel is being set up to look at the clinical issues that have arisen. The Director of Nursing confirmed that the clinical review would look at all patients affected by the problems at Imperial …”
Does NWL always trust what Imperial says?
Jeff Zitron [Chair, NHS NW London, Inner & Outer NWL Sub Clusters] said that the Board needs evidenced assurance that the issues that have arisen at Imperial and North West London Hospitals are being adequately addressed.
**
“Trish Longdon [Vice-chairman, NHS North West London Cluster Board] noted that although the Imperial targets were shown as ‘Green’ this does not reflect the true position. This was agreed and it was noted that they were in fact being treated as if they were Amber.”
“Urgent meeting”
“The Chairman asked for an update on the situation at Imperial College Healthcare Trust which had been the subject of substantial concern at the last INWL Inner North West London NHS] Board meeting. The INWL Board had agreed that an urgent meeting should be held with the Chairman and Chief Executive of Imperial, involving the CCG Chairs, the Tri-Borough Cabinet Members for Health, himself and Anne Rainsberry [Chief Executive North West London Cluster]. This was taking place later that day.”
Clinical harm?
“ Following investigation of Serious Incidents in May 2011, ICHT [Imperial College Healthcare NHS Trust] is unable to provide sufficient assurance of robust data quality in regard to reported performance for 18 weeks RTT [Referral To Treatment], cancer waiting times and the elective waiting list.
The Trust board have approved a reporting break until end of June 2012 which has been agreed by the Cluster in conjunction with NHS London. To ensure due diligence, an independent audit of waiting list management across all specialities has been undertaken and a set of recommendations made.
“ICHT continue to provide shadow reports to NHS NWL during this period with weekly reporting. Some evidence of improved performance management is observed. However this is not yet consistently embedded Trust- wide and clearance of the current backlog of patients is not at sufficient pace to meet the agreed trajectory…
“A clinical review will be undertaken to ensure that patients have not experienced harm due to an elongated wait.”
**
“Anne Rainsberry [Chief Executive North West London Cluster] referred to a range of discussions taking place on Imperial’s performance issues, focussing on the backlog of the Referral to Treatment waiting lists which had resulted in a reporting break being granted.
“Work was concluding at the end of April [2012] to reduce the original backlog of patient cases and enable reporting systems to get back on track in June. A clinical review had also started to determine if any risks to patients had arisen due to the delays. The review findings would be brought back to the Board…
“Anne Rainsberry referred to a meeting she had attended with the Department of Health to review Imperial‟s approach to resolving these issues.”
Big organisational challenge
“Simon Weldon [Director of Commissioning and Performance, North West London Cluster Board] … asked the NWL Board to be aware of the enormity of the organisational challenge facing Imperial and that remedial actions would take time to take effect.”
Imperial responds
Campaign4Change put it to Imperial College Healthcare NHS Trust that there is nothing in its latest published board papers to show the trust is concerned about the problems relating to cancer waits and lost appointments. We said that PCT papers referred to “substantial concern” but there was nothing similar in Imperial’s latest published papers. We let Imperial know we would be asking the question: how concerned is Imperial about the confusion over cancer waits?
This was the reply of Imperial’s spokeswoman (in full)
“The safety of patients is our absolute priority. Our Trust is taking the issues involved in the current situation very seriously and at all times the well-being of the patients we serve is foremost in our minds.
“We acknowledge that some patients may have been caused additional pain and anxiety associated with a prolonged wait for diagnosis and treatment and worked to address the problem as robustly and quickly as possible.”
Separately, in May 2012, Imperial told us that it was in the process of validating 900 patient records that indicate that a patient might have been waiting longer than two weeks.
At that stage it had closed more than 400 of the 900 records “as the majority indicated that patients have either received or are receiving treatment, or that the patient did not attend their appointment and their GP had advised there was no need for further follow up”.
The spokeswoman said “To date our investigations have found no suggestion that any delay in treatment has caused a patient to come to serious harm.”
She said “This is not an IT issue, but an administrative issue related to the physical input and extraction of data from patient records. It is entirely unrelated to IT systems.”
Comment
It is extraordinary that Imperial is seeking to replace existing systems when it is organisationally in a questionable state. Simon Weldon, Director of Commissioning and Performance, North West London Cluster Board, referred to the “enormity of the organisational challenge facing Imperial”.
Under the NPfIT, a number of implementations of Cerner at several NHS sites have gone badly wrong – and they did not have Imperial’s problems before going live. It would be common sense for Imperial to get its data accurate and its management processes and checks reliably in place before attempting a major switch of IT systems.
Two other things are particularly worrying: Imperial appears not to concede in public it has any major problems, and it appears to separate IT from administration.
Having the best IT in the NHS is of limited value if important parts of the Trust are in a state of administrative disorder. If data is unreliable, incomplete and inaccurate, and solid processes are not in place to ensure that the correct data is entered into systems when it needs to be entered, and routines are not in place to provide alerts and follow-ups, costly hardware and software may not compensate. Is this an IT issue or not? Does that matter?
We would not like to see a Cerner NPfIT debacle similar to the ones at Barts in London, Royal Free Hampstead, and at hospitals in Oxford, Milton Keynes, Weston-super-Mare, Morecambe Bay, Worthing and Bristol.
But is Imperial particularly concerned? Is it in denial over the seriousness of its problems? Why is it reporting its position at Green when North West London NHS regards its position as Amber? Why do its latest published board papers not mention its problems tracking patients under the two-week rule? Is the Trust so preoccupied with replacing its existing systems with Cerner that it is not doing the basics well?
One specialist in the NHS said: “If the Trust wasn’t spending so much time and effort doing the Cerner deployment then maybe they would have concentrated its scarce resources on performing the job of managing patients.”
Accountability for failure in the NHS is poor to non-existent. So will Imperial be able to do what it wants regardless?
Troubled Cerner NPfIT go-lives, so far:
Milton Keynes Hospital NHS Trust
Barnet and Chase Farm Hospitals NHS Trust
St George’s Healthcare NHS Trust
University Hospitals of Morecambe Bay NHS Foundation Trust
Birmingham Women’s Foundation Trust
*We acknowledge Pulse which broke the story on Imperial’s cancer wait problems.
London LMCs alert over Imperial cancer waits mix-up – Pulse.
GPs kept in the dark over hospital cancer blunder – Pulse
Other links:
by Tony Collins
NHS software supplier Cerner has written to Cambridge University Hospitals Foundation Trust questioning a process to procure an electronic patient record system.
The Trust chose Epic and HP as preferred supplier for a common platform for the Cambridge trust and Papworth Hospital Foundation Trust.
Now Cerner, which bid for the contract, is asking for the process to be be re-run, says the Health Service Journal. The Trust told the Health Service Journal its procurement was open and fair.
The Health Service Journal said it had seen Cerner’s letter. It quoted the letter as saying that the Trust’s favouring of Epic was in clear breach of the ‘equal treatment’ principle.
The letter said that Cerner found it difficult not to conclude that the Trust had made a pre-determined decision to award the tender to Epic some time before it designed the procurement process. This gave other vendors no realistic possibility of winning, said the letter.
The trust said it was continuing to proceed with the procurement process for “eHospital”.
Cerner supplies the NHS with the Millennium software, either directly or through BT under the NPfIT.
By Tony Collins
An NHS organisation in London has bought an electronic patient record system for less than a third of the cost of similar technology that is being supplied by BT to other trusts in the capital and the south of England.
The £7.1m purchase by Whittington Health – a trust that incorporates Whittington Hospital near Archway tube station – raises further questions about why the Department of Health is paying BT between £31m and £36m for each installation of the Cerner Millennium electronic patient record [EPR] system under the NPfIT.
Whittington Health is buying the Medway EPR system from System C which is owned by McKesson. The plan is for the EPR to operate across GP, hospital and social care boundaries.
It will include a patient portal. The idea is that patients will use the portal to log on to their Whittington Health accounts, see and save test results and letters, and manage outpatient appointments on-line.
In a board paper, Whittington Health’s IT Director Glenn Winteringham puts the case for spending £7.1m on a single integrated EPR. Winteringham puts the average cost of System C’s Medway at £8m. This cost, he says, represents “significant value for money” against the average deployment costs for the NHS Connecting for Health solution (Cerner Millennium) for London of £31m. In the south of England the average cost of Cerner Millennium is £36m, says Winteringham in his paper.
He also points out that the new EPR will avoid costs for using “Rio” community systems. The NPfIT contract with BT for Rio runs out mid 2015. “From this date onwards the Trust will incur an annual maintenance and support cost. Implementing the EPR will enable cost avoidance to the [organisation] of £4m per year to use RIO (indicative quotes from BT are £2m instance of RIO and the [organisation] has 2 – Islington and Haringey).
BT’s quote to Whittington for Rio is several times higher than the cost of Rio when supplied directly by its supplier CSE Healthcare Systems. A CSE competitor Maracis has said that, during a debrief, it was told that its prices were similar to those offered by CSE Healthcare for a Rio deployment – then less than £600,000 for installation and five years of support.
In comparison BT’s quote to Whittington for Rio, as supplied under the NPfIT, puts the cost of the system at more than fifteen times the cost of buying Rio directly.
In short Whittington and Winteringham will save taxpayers many millions by buying Medway rather than acquiring Cerner and Rio from BT.
Why such a price difference?
The difference between the £31m and £36m paid to BT for Cerner Millennium and the £8m on average paid to System C could be partly explained by the fact that Whittington (and University Hospitals Bristol) bought directly from the supplier, not through an NPfIT local service provider contract between the Department of Health and BT. Under the NPfIT contract BT is, in essence, an intermediary.
But why should an EPR system cost several times more under the NHS IT scheme than bought outside it?
Comment:
Did officials who agreed to payments to BT for Cerner and Rio mistakenly add some digits?
Whittington’s purchase of System C’s Medway again raises the question – which has gone unanswered despite the best efforts of dogged MP Richard Bacon – of why the Department of Health has intervened in the NHS to pay prices for Rio and Cerner that caricature profligacy.
Perhaps the DH should give BT £8m for each installation of Cerner Millennium and donate the remaining £21m to a charity of BT’s choice. The voluntary sector would gain hundreds of millions of pounds and the DH could at last be praised for spending its IT money wisely.
Whittington buys Medway and scraps Rio – E-Health Insider
NHS IT supplier “corrects” Health CIO’s statements
Campaign4Change 