CSC says new NHS deal weeks away

Government IT services firm CSC has said it expects to sign a new deal with the NHS “in the next few weeks” that will see it deliver a cut down version of Lorenzo to much smaller number of NHS trusts.

The announcement came in financial update in which CSC said it “anticipates concluding a non-binding memorandum of understanding (MOU) with the National Health Service”.

The original local service provider deals signed by the National Programme for IT in the NHS committed over 200 NHS trusts – all of the NHS trusts in North, Midlands and East of England – to take the iSoft developed Lorenzo electronic patient records software. But the new deal is expected to end this volume commitment.

Reductions in the scope of Lorenzo are likely to include dropping the requirement to cover mental health trusts, together with providing a more basic clinical system to hospitals. Other areas for cuts could include primary care.

The CSC statement said: “The anticipated amended contract contemplated by the MOU will be realigned to respond to the NHS’ change agenda and will incorporate a reduced scope and volume for Lorenzo Regional Care.

"The MOU terms are substantially completed and CSC expects signing of the MOU in the next few weeks pending final NHS and other government reviews and approvals”.

CSC has been in formal breach of its NME LSP deal since February, with the Department of Health saying it was considering options including termination of the CSC contract.

The company has repeatedly missed delivery deadlines for implementing Lorenzo at four NHS pilot sites: Morecambe Bay, NHS Bury, Birmingham Women’s and Pennine Care. Delivery of the planned next generation software is running six years late.

Matters appeared to come to a head last month when Pennine Care withdrew from being a pilot site after two years of massive investment in trying to get the trust live. None of the three pilot sites that are live are believed to have fully signed off their implementations.

If the DH does sign a new MOU with CSC it will have to either scrap or severely bend its previous requirement for four trusts to be live with Lorenzo for key milestone payments to be released and the NHS to grant ‘authority to deploy’ the software in the wider NHS.

UK government negotiations with CSC are further complicated by the fact that CSC is engaged in a £117m take-over of iSoft. The company’s older software products are the most widely used in NHS hospitals.

In its market statement CSC indicated that forecast revenues from the NHS deal would be delayed by CSC failing to hit milestones rather than lost.

Michael Laphen CSC chairman, president and CEO, said in the statement: “After several months of detailed discussions we’re now in the final stages of concluding this agreement and moving into a new era of certainty and partnership with the UK government.”

Read: EHI editor Jon Hoeksma’s opinion piece on where the exit of Pennine Care leaves the North, Midlands and East; and why an independent review is now needed.