Christine Connelly has warned that the cost of terminating CSC’s local service provider contract for the North, Midlands and East of England could be more than continuing with it.
The NHS chief information appeared at yesterday’s Public Accounts Committee hearing into the third National Audit Office report into the National Programme for IT in the NHS.
She told MPs on the committee that ending the deal could “potentially leave us exposed to a higher cost than if we complete[d] the contract as it stands today.”
The Department of Health and CSC are locked in negotiations about the future of the £3.1 billion contract.
The Treasury wants to see it reduced by £500m, and the negotiations are looking to do this by reducing the scope of what will be delivered and the number of trusts it will be delivered to.
Critics of the national programme would like to see it terminated completely. The PAC heard that around £800m has been paid out to the company so far, for ambulance, primary care, and 'interim' systems.
CSC is contracted to deliver iSoft’s Lorenzo electronic patient record to health communities in the NME.
However, it has missed a series of deadlines to get the software deployed at four early adopter sites, one of which, Pennine Care NHS Foundation Trust, recently withdrew from the project.
Connelly, who appeared at the PAC hearing alongside NHS chief executive Sir David Nicholson, reiterated “all options are being considered”.
But she said there were contractual costs of up to “several hundred million pounds” that would have to be paid if it were terminated out of convenience.
“Then there is the potential that the supplier could come to us to seek damages with a view that we have impacted their ability to get return on that asset that they were holding,” she said. “Again, that may be several hundred million pounds.
“From that point on we would [also] have to look at transitional systems. There would be a cost if we decided to no longer go with Lorenzo or iPM or whatever we were running. There would be a cost to take people on those systems and move them to something else.”
Connelly suggested that situation could be similar to the one the DH faced when Fujitsu departed as local service provider for the South. The DH and Fujitsu are still in dispute about departure in May 2008.
The NAO also found that the cost of running Cerner Millennium at the eight trusts in the South where Fujitsu had deployed it almost doubled the following year, because the company was no longer bound by its contractual commitments.
“Given that we would then be over a barrel because we were running systems that one supplier had provided but we had terminated, if we don’t manage that well we could be in a very difficult position,” Connelly said about the NME situation.
Conservative MP Stephen Barclay said it appeared the department had negotiated itself into a very difficult position.
Sir David indicated that the Department was not planning to immediately cancel the contract. “We are involved in a set of negotiations with CSC about the future of this contract... we hope that we will come to a satisfactory conclusion,” he said.
“The alternative to that is to think about the cancellation. [But] that’s not what we’re planning to do at the moment.”
The NAO report made a series of scathing criticisms of the most important and most contentious aspect of the national programme, its attempt to deliver an integrated care records system to England by building detailed care records at trusts.
It said the programme’s vision would never be realised, that the £2.7 billion spent on care records to date had not been value for money, and that the £4.3 billion still earmarked for records was unlikely to be spent better.
However, Sir David effectively rejected all the criticisms. He described the situation before the programme as “a mess”, defended the renegotiated deals with BT for London and the South, and said he thought the NHS might still get something “really good” out of the CSC contract.
On the other hand, he said: “We’re going be pretty hard nosed about all of this. We need every penny... so we’re not going to make a decision based on what we think we’re tapped in the past, and genuinely if we have to make that decision [to cancel] we will absolutely make that.”
Earlier in the hearing, Sheri Thureen, president of UK healthcare, CSC, defended its record in the NME, saying it had delivered 20m records, albeit through ‘interim’ systems that she insisted had been “enhanced” over the course of the contract.
She also said Lorenzo was “in production today” at three early adopter trusts; one of which, NHS Bury, was revealed to have signed off on the system.
Summing up at the end of the hearing, committee chair Margaret Hodge said it was clear that “we are left with a huge question mark about what can be salvaged from the remaining £4.3 billion to spend elsewhere on services for the NHS.”
EHealth Insider was blogging the PAC hearing. Read a transcript here.
© 2011 EHealth Media.
Are we all allowed to ignore independent Audit now thenIt is I, LeClerc 203 weeks ago
When I challenge the Audit team (over matters such as IGTK scores) I receive little support from the SHA, on the basis that Audit are an independent team of experts. So how can Sir David and CC be in a position to reject the NAO's independent experience then?
Childs playzappa 203 weeks ago
I think even a child would understand that if you don't spend money, that could be seen as a 'saving'
Surely the point is that the current deal won't, and a new deal is unlikely to, deliver the systems clinicians.
We need to move on from this, not sign up for 'National Programme 2- the sequel' another disaster movie!!
What everyone thinks but no one will say.....Futureviewer 203 weeks ago
The Government were scammed by unscrupulous consultants in league with some very BIG suppliers into buying a programme of IT reforms that were neither discussed nor supported by the healthcare community
The contracts were negotiated by incompetent government buyers and very savvy suppliers, shrouded in secrecy so that the Taxpayer wouldn’t know just how inadequate they were.
The programme was forcibly implemented by hired bullies, with threats that if you didn’t comply, delayed, asked too many questions or complained you were finished in the NHS.
Almost everyone in the NHS knew that this was a total scam, (it was actually nicknamed the Emperor’s New Clothes) that the products were grossly overpriced, couldn’t deliver and for the most part didn’t even exist.
Some BIG supplier’s directors sold their shares, trousered the cash and disappeared
Many small, previously successful and thoroughly trusted NHS suppliers were deliberately bankrupted by starving them of business (and still are)
Whistle blowers were greatly discouraged!
The scam is so big (£13 Billion wasted so far) and the implications of incompetence and corruption so great, that the truth can never be told.
So, more money will be wasted in the hope that this will all become so legally convoluted that it can never be unravelled.
In the meantime the Government expects the NHS to save another 20%
Excellent..The mind boggles... 203 weeks ago
I could not agree with you more! Absolutely, 100%! Where is the sense in this? We will continue with CSC - an average, at best, provider (not just my opinion, but the opinion of many) because it is cheaper to do so. I thought we were about getting the best value, the best solution for better patient care. It seems to be quite the opposite now
I'll sayDaniel Defoe 203 weeks ago
Yep; that just about sums it up.
And if only EHI would solve the web-site's contribution formatting problem, it would make it so much easier for us all to read and comment and, perhaps agree. I've almost given up contributing because of it.
Cluess in the HouseCanUseeTheLight 203 weeks ago
As it was clearly pointed out by members of the PAC they have many other responsibilities and areas of public interest to oversee Ms Hodge admitted to her cluelessness at the outset. Its not her job to be clued in that’s what we pay messr;s Nicholson and Connolly for. They turned up what sounded like spin, without prepared responses to the point raised in the NAO report. It is perfectly acceptable to question the report and disagree with it but it can not stop there. In any debate positions must be evidenced to be either accepted or refuted, in this case the report was present but any credible refutation was very lacking or non existent.
Embarrassment should indeed have been felt but by the people who were being questioned not by the committee members. Did you actually see any embarrassment on their part, watch the playback what you will see is arrogance, and a single minded desire to stay on a sinking ship.
On what basis can we have any confidence in Sir David’s ability to deliver the cost saving required without cutting deep into service provision? Take out NPfIT and related costs for running it with contractors and consultants and he might stand a chance with minimal service loss.
performance issuesE. L. Wistey 203 weeks ago
I watched this the other night. I have spent a working lifetime in NHS IT and I have never before been ashamed to say that. I am now.
I thought the performance of the DH was shambolic, ill-prepared and disingenuous. Quibbling over figures instead of dealing with the real issues. The only person to come out of this with any integrity seemed to me to be Richard Bacon, who at least had gone out and done his homework
Now an assessment of political risk?Sic transit 203 weeks ago
Sir David and Christine Connolly appear committed to pushing forward with NPfIT (it's only 20% of NPfIT that has problems - how?!) and insisting they can still deliver value for money. They appear to have ministers who follow a brief (Burns) or are distracted by bigger problems (Lansley).
Whether Sir David is allowed to continue looks like it won't be decided on a considered assessment of the facts (the PAC report) but rather on the political risk of carrying on - with an election just under 4 years away will NPfIT "blow up" during the campaign along with the Coalition's other reforms - compared with the pain and risk of dismantling NPfIT now and managing messy supplier negotiations and unpredicatable liabilities? Although the latter could be blamed on the failed policies of the "last lot" it would put Sir David in a difficult position as SRO and NPfiT supporter. The Government would be in a difficult position as Sir David is their man for delivering the £20bn "savings".
Ast Sir Humphrey famously said "The public doesn't know anything about wasting government money. We're the experts."
.....another Government IT Projectgeorge385 203 weeks ago
This project has gone the same was as every other large government IT project: Down the pan at huge (excessive) expense to the taxpayer.
When will the DH learn how to write a contract - and to listen the stakeholders who have been (successfully) delivering healthcare IT projects for years?
I have no sympathy whatsoever for the DH - as the contracts (including the renegotiated contracts) were/ are not worth the paper they are written on.
My local paper-shop is more business savvy.
It’s not just the waste of public money in not delivering the products to the required specifications, and quality - we also have to remember that many smaller healthcare IT businesses were pushed aside and wiped out by the NPfIT - and these businesses were delivering the goods. The NPfIT has actually damaged the healthcare IT industry in the UK.
And before anyone mentions PACS - some of us were delivering advanced PACS long before the NPfIT - and they were certainly cheaper.
There should be a proper public inquiry and heads should roll - no Knighthoods for this latest debacle.
talking about PACS..Mary Hawking 203 weeks ago
my recollection is that PACS was only included in the NPfIT program when they realised - belatedly after the contracts were signed - that Trusts were installing PACS for very good business reasons anyway.
I think the rationale was to have single systems (one per LSP?) which could communicate with a central dtatbase.
There may be uniformity of PACS systems - but are the records viewable in other systems in the LSP area?
And is this part of the contract being renegociated?
Clinical 5 to the rescuetimbenson 203 weeks ago
Christine Connelly cited the Clinical 5 and the Interoperability Tool Kit (ITK) as two of the corner-stones on which future progress rests. The Clinical 5 are:
(1) Patient Administration System with integration with other systems and sophisticated reporting.
(2)Order communications and diagnostics reporting (including all pathology and radiology tests and tests ordered in primary care).
(3) Letters with coding (discharge summaries, clinic and Accident and Emergency letters).
(4) Scheduling (for beds, tests, theatres etc).
(5) e-Prescribing including ‘To Take Out’ (TTO) medicines.
This is not rocket science!
So whats in it for me?DaveJ 203 weeks ago
I work for one of the smallest (and poorest) trusts in the country and in the North of England. What annoys me more than anything about all this is (to quote timbenson)
1) We already have this. It isn't actually a PAS, it is a combination of systems that provide PAS functionality using interops and web technologies.
2) We already have this in both secondary and primary care. In addition, both sides of the healthcare community can see the requests/results generated on their patients irrespective of where is was requested
3) We can already produce these, the only missing link is the electronic transfer to GP clinical system which we hope to achieve by the end of this year
4) We already have this as part of the suite of applications in 1)
5) Out to tender presently
6) Add to this an EPR that is now eight years old whereby all activity, results, documents, discharge summaries (you name it, it's in there) PLUS scanned case notes. All of which can be viewed by clinicians in both secondary and primary care (providing they have a right to access)
As Tim rightly points out, it isn't rocket science and has all been done with software that is readilly available and a fraction of the cost that NPFIT would have us spend
PAS is an NHS Inventiontimbenson 203 weeks ago
DaveJ is quite right. PAS is an NHS invention around the time of the Korner Reports (1982). PAS as we know it is just a set of linked apps to do:
(1) Patient master index
(2) Bed state
(3) Waiting list management and IP booking
(4) Out patient appointments
(5) Clinical coding and central returns.
They do need to be linked together, but there is no reason at all why all need to be replaced or upgraded at the same time or even be supplied by the same company.
No vision or ambitionstueym 203 weeks ago
Not only is the Clinical 5 not 'rocket' science, it didn't even represent state of the art medical informatics when it was published 3 years ago. It was intended as a minimum that acute trusts should have in place.
HIMSS Europe has published a comprehensive 7 level EMR Adoption model which outlines the EMR functionality required for a secondary care environment. It is fashioned after a similar model that has been used as the benchmark for acute hospitals for several years in the US. Clinical 5 would barely get you to level 3/4 of the HIMSS model. In the US large numbers of hospitals are 'certified' at Level 6 and many now driving to achieve Level 7 as their standard. Several have already achieved Level 7.
HIMSS Europe also certified their first European sites last year at Level 6. Learn more here: https://http://www.himssanalytics.eu/EMRAM.html Maybe
MaybeChristine Connelly should take a read before announcing what the objectives should be and thereby demonstrate a little vision rather than myopia.
Good money after bad....Taxpayer555 203 weeks ago
Critics of NPfIT are not so simply because of cost. The fact is that the systems on offer serve the needs of a minority of Trusts and are astonishingly expensive now, and as we approach expiration, the post program cost must be in sharper focus too.
We live in a time when centralised government is losing it's grip : can the DoH not acknowledge that reality ? Is it not time to acknowledge that this program is no longer fit for purpose (if it ever was): dredging around for ex post justification for the unjustifiable is simply a waste of even more of our taxes - money which could be better used funding care, rather than US corporate balance sheets.