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CSC signs new deal with DH

4 September 2012   Chris Thorne

CSC and the Department of Health have agreed a new deal that the DH says will save the NHS more than £1 billion.

It will also remove CSC’s exclusive rights to be the only provider of clinical IT systems in the North, Midlands and East of England. 

Today's announcement ends a long saga of negotiations about the future of CSC's local service provider contract, signed as part of the National Programme for IT in the NHS.

The term of the latest agreement extends through July 2016 and in some cases contracts will extend to 2021. Crucially, the new arrangement appears to quash the threat of legal action from either side.

"The agreement includes full mutual releases of all claims between the parties through the date of the agreement," a CSC statement says.

CSC and the DH have been locked in negotiations about a new deal since last spring, when Pennine Care NHS Foundation Trust pulled out of becoming the fourth early adopter of Lorenzo. The latest 'standstill' agreement between the two ran out on Friday.

According to a filing to the US Securities and Exchange Commission, CSC will receive a payment of £68m, which represents "payment for value delivered to date."

Under the new arrangement the NHS will not be subject to “trust volume commitments” and CSC will deliver the system “based on demand from individual NHS trusts,” a DH statement says.

Trusts wishing to take Lorenzo will be able to access centralised support and funding if they can develop a robust business case and demonstrate value for money.

The CSC statement says: “A flexible arrangement has been established for these trusts to combine additional clinical modules with the core care management functionality of the Lorenzo solution to meet their specific requirements.”

Trusts will receive ongoing managed services from CSC for a period of five years from the date of Lorenzo deployment, provided deployment is complete or substantially complete by July 2016, it adds.

Health minister Simon Burns said the new agreement will save taxpayers more than £1 billion which will be reinvested in patient care and front line services.

“We’ve removed the restrictive, top-down, centralised approach and given the local NHS the power to make their own decisions about which IT systems they use,” he said.

“The modern NHS still needs healthcare IT systems to exchange information securely and meet the needs of their patients.

"By re-shaping this contract, delays will be avoided in delivering much needed IT systems to the NHS, and will ensure the investment made to date is not wasted.”

Francis Maude, minister for the Cabinet Office, said that that the government “will not tolerate poor performance – and today’s announcement will leave suppliers in no doubt that we will act to strip out waste from contracts where they offer poor value for the taxpayer.”

CSC has been developing Lorenzo under the £12.4 billion NPfIT, in which it has invested £1 billion.

However, its failure to implement at Pennine Care meant that it did not meet contractual commitments set out by both the DH and NHS Connecting for Health while Christine Connelly was head of NHS IT.

In March this year, CSC announced a revised deal with the DH that secured savings of £1 billion from its disputed £3.1 billion deal, but the memorandum of understanding was not signed.

An agreement has been looking increasingly likely in recent weeks. Last month, the DH apparently signed off the deployment verification criteria for three of the early adopters of Lorenzo.

And eHealth Insider has been able to identify a number of trusts still interested in taking the system.

CSC president and chief executive Michael Lawrie said today’s announcement “represents a renewed commitment by the NHS and CSC to a long-term partnership as well as CSC’s healthcare solutions."

“Under this agreement, CSC will continue to have the opportunity to support the NHS information and communications technology infrastructure through deployment of our groundbreaking Lorenzo base product solutions, now rigorously tested and approved for wide-scale deployment across the NHS,” he added.

“We are already seeing strong demand from NHS trusts that are confident our solutions will bring the safety and efficiency gains required by a modern NHS."

There have been four, key early adopters of Lorenzo: NHS Bury, University Hospitals of Morecambe Bay NHS Foundation Trust, Birmingham Women’s NHS Foundation Trust and Humber NHS Foundation Trust.

Pennine Care NHS Foundation Trust has since absorbed NHS Bury and has indicated that it will switch off Lorenzo at the community services arm following its decision to procure Paris from Civica.


Related Articles:

43 News: New NME Lorenzo trusts poised to commit | 16 August 2012
10 News: CSC reaches Lorenzo "milestone" | 9 August 2012
5 Insight: Into the end-game | 10 January 2012
6 Insight: Insider view: Jon Hoeksma | 31 July 2012
18 News: CSC and DH talks will drag on to June | 5 April 2012
Last updated: 6 September 2012 10:32

© 2012 EHealth Media.


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"Things are seldom what they seem"

Mary Hawking 97 weeks ago

preview.tinyurl.com/8dnab2m

Did the agreement include a pay-off of 68m to remove monopoly status and if so, which of the three contracts had it in the first place, and for what?

As far as I am aware - and I have queried this over the years - in the original Accenture contracts, volume was only included in the North East and East Midlands contract - hence the decision (minuted by Yorkshire and the Humber SHA) to increase the *volume* in primary care - at a time when there wasn't any workable Lorenzo: apparently non-availability didn't affect the LSP rights to volume.

If the sole provider rights for secondary care have been removed by this financial penalty, has the monopoly over primary care systems - GP and non-GP (GP didn't apply in North West and West Midlands) - as well?

This is a government publically committed to Transparency: will the main provisions of the new contract be publically availabe: or is that a step too far?


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Software must be signed off by senior clinicians...

ehealthsolutions 98 weeks ago

I understand that the contracts still include the specification that senior Acute Trust clinicians must sign off any new clinical software as "safe and appropriate for clinical use" before any payments can be made to CSC.

I am not sure what the situation is with regards to new "non-clinical" software.


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so let me understand - is this the deal?

Nitram 98 weeks ago

It has been reported that the original contracts which were supposed to be volume based (i.e. trusts taking installs and upgrades) included clauses that guaranteed the suppliers a base amount (Cumulative Minimum Commitment%u219 represents up to 70% of the contract charges) if minimum volume targets weren't hit.

The new agreement with CSC takes these minimum volume targets out of the contract, removes CSC's right to be sole provider - which might appear to be a victory for DH. But appears to guarantee them a large chunk of their current contract value - 1.9bn of the 2.9bn value. So that means they get 65% of the original contract value.

Sounds to me that CSC haven't made much of a concession as DH have ended up agreeing to pay CSC the committed minimum under the original contract, as if DH had failed to deliver the numbers of Trusts for Lorenzo under the original contract, and CSC don't have any of the costs of delivering Lorenzo to the all those Trusts or of the various promised upgrades. CSC (and DH) have the threat of legal action removed.

Sweet deal for the NHS?


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Payment for non-delivery

Neelam Dugar 98 weeks ago

Is it not true that LSPs get paid whether they deliver or not as per their contract? As we have already paid for 10years so extra 5 should not be difficult to bear.

Is it definate that these contracts end in 5 years. Can anyone confirm a proper exit strategy has been written?


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Nothing is free--We say it with PACS

Neelam Dugar 98 weeks ago

Trusts were told by CFH/LSP that CDS or central data stores were free. Trusts have had to pay a price to get their data out.

Trusts need to be careful--Demand to see the exit stratgy & how their data will be made available to Trusts when at the end of 2021 Trusts would would start looking at their next supplier. Good exit strategy is key.


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Record Retention

CertaCitrus 98 weeks ago

How does that work with patient data retention rules? No single trust would be able to claim ownership of a patients data - so do you have to pay a price to get 'your' data out?


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Free PAS Free Clinical Modules Free 5 years support

ehealthsolutions 98 weeks ago

Have I got this right?

If an acute Trust in the N M or E region puts out to tender for a new PAS then CSC can tender for the contract - assuming their products satisfy the OBS - with a 0 purchase cost (to the Trust) and 0 5 year "managed service" maintenance cost.

It sounds like they might throw in a few additional clinical modules - ePMA? - as well.

Sounds like good value for money to me...


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Free.....

george385 98 weeks ago

If it's free then there's a reason it's free.


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eh lad, you get aught for naught.

It is I, LeClerc 98 weeks ago

or as we might say:

Il n'y a rien de tel qu'un repas gratuit.


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Quiet News Day?

Nick Tordoff 98 weeks ago

Good to see this coming out on a day when nothing much else is happening. The Secretary of State Andrew Landsley will be.... What do you mean a reshuffle!


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Fujitsu?

John Harry 98 weeks ago

I suspect we will soon see a settlement of the dispute between the Department of Health and Fujitsu with what will be a rather generous payment by the Department of Health. It is difficult to imagine a Fujitsu default comparable to the years of failure to deliver by CSC and I am certain Fujitsu will be pointing out the rather stark double standard apparently employed by the Deparment of Health. But we will probably need to watch the Fujitsu financial statement to find it. I doubt the Government will announance it.


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Surrender?

John Harry 98 weeks ago

If the trusts choose a third party system do they still get centralized support and funding? If not this is a total surrender by the NHS. Who said the NHS is third world when it comes to IT management?


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it makes me weep

CanUseeTheLight 98 weeks ago

does anyone learn anything, ever ?

four more years of this.

I give up, they win.


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