CSC deal rattles NME procurements

CSC’s interim agreement with the Department of Health is creating huge uncertainty in the North Midlands and East NHS IT market, with major procurements put “on hold” while hospital trusts evaluate the deal.

EHealth Insider reported last week that the interim agreement between the DH and CSC will give the first ten trusts that commit to taking the Lorenzo electronic patient record system a signing-on bonus of £1m for implementation expenses.

This is on top of £4m in funding that up to 20 trusts can get for deployment costs.

Derby Hospitals NHS Foundation Trust and Walsall Healthcare NHS Trust have put their patient administration system procurements “on hold” while they assess the Lorenzo offer.

Sheffield Children’s NHS Foundation Trust has also told suppliers that it is considering the CSC deal.

A statement from Derby said: “The trust was made aware of the option to take Lorenzo and the new deployment model part way through its patient administration system procurement.

“There are a number of potential financial and strategic advantages in taking this option that the trust needs to seriously consider and hence has paused the PAS procurement pending a full evaluation.

“We are working closely with NHS Connecting for Health and CSC on the details of the product, deployment model and approval process and a final decision will be made early next year.”

Head of healthcare at IT trade association Intellect, Jon Lindberg, said suppliers were concerned with the lack of clarity surrounding the deal and the impact it has had on the market.

“Suppliers are witnessing procurements being cancelled mid-way through and some being reviewed to take into account the new offer, but still continuing the process without any guarantee that it will be fulfilled,” he said.

“Overall this new deal is hurting small, medium and large companies who are now having to review their strategies and market research, and the added woes of having lost money and time bidding for opportunities that have or will be cancelled.”

He added that the DH should be responsible for giving clarity and support to the market with relevant information.

Cerner’s head of corporate affairs, Simon Hill, said selecting the right IT system is one of the biggest decisions any NHS trust will make over the next decade.

“When the government announced it had scrapped the National Programme for IT in the NHS, we believed that this would create a market that would allow the world’s best companies to compete for NHS IT business,” he said.

“We are concerned to hear reports that NHS managers might be encouraged to sacrifice long-term strategic IT decisions and opt for a system that is unfinished and unproven in order to access short-term cash incentives.

"But until we understand the nature of any agreement, it would be inappropriate to speculate.”

Stalis chairman Roger Wallhouse told EHI that trusts often do not recognise all the time and all the effort that goes into a procurement.

“It has a cost and in the end if the procurements are not managed efficiently and effectively the NHS will ultimately pay for that,” he explained. Suppliers are prepared to accept market risk “up to a point," he added.

“But when it’s against a supplier that’s able to put supposedly a million pounds on the table, in a cash-strapped financially challenged NHS, it’s unlikely that trusts can turn their back on such an offer.

“If either the money is necessary because the cost of implementing the product is so high that it’s needed to create a level playing field with others, or it’s there because CSC and the DH are determined that they need to offer an inducement to trusts, that’s fine.

"But don’t expect other suppliers to bid competitively against that because it’s not fair.”

Sheffield Children’s NHS Foundation Trust is in the middle of a PAS procurement, but sent a letter to suppliers this week, saying it is “assessing the interim agreement’s suitability in relation to its requirements for a PAS/EPR in addition to continuing with the procurement process.”

“Whilst the trust needs to evaluate all available options to it for a PAS/EPR, please note that, at this stage, the procurement process will continue,” it adds.

Walsall Healthcare NHS Trust went out to tender for a PAS in April this year, but has put its procurement “on hold” according to director of informatics Steve Darkes.

“We are currently reviewing the Lorenzo system and will be looking at the qualities and benefits that the system can offer the trust over the coming months,” he said.

“A decision will be made in March 2013 as to which system we will be purchasing.”

A board assurance framework dated October 2012 said Walsall had agreed to proceed with Lorenzo and strategic health authority approval was being sought.

Tameside Hospital NHS Foundation Trust is the first adopter of Lorenzo under the terms set up in the August IA. A trust spokesperson confirmed “some central funding” is available for trusts to help cover implementation costs.

“This is subject to approval of a robust, value for money business case. We are currently developing our business case and will put this forward to the DH for approval in due course," he added.

Other trusts that have expressed an interest in taking Lorenzo are; the Ipswich Hospital NHS Trust; South Warwickshire NHS Foundation Trust; and University Hospitals Coventry and Warwickshire.

EHI asked the trusts to comment on whether they are considering the new CSC deal, but got no response.