NPfIT claims discounts of up to 80% on PACS

Some £60m of central investment has been committed for this year but one experienced hospital IT director has told E-Health Insider the total costs of procuring and implementing PACS may top £1.7 billion. Trusts will, however, reap significant savings in the storage, film, chemicals and other costs associated with conventional film systems. There are 178 acute trusts in England left to convert to the new digital imaging systems; 25 trusts already have PACS.

According to a national programme spokesperson discounts of up to 80% have been achieved in PACS servers, up to 71% in disk storage; 65% in clinical radiology (image acquisition); and 58% in diagnostic work stations.  The figures relate to peak discounts achieved in the various discounts negotiated with different PACS suppliers.

“Through the power of NHS purchasing, pricing reductions across the whole of PACS have been achieved,” said the national programme spokesperson.  EHI understands that the main focus of the PACS system to be bought nationally will be a basic ‘vanilla’ PACS, focused on X-rays and CR, with storage and infrastructure to allow additional disciplines and modalities.  

Industry sources have also confirmed that the national programme traded "exclusivity" to deliver PACS to all hospital trusts within a particular LSP in order to secure major pricing discounts.  “Exclusivity is the commitment Richard Granger traded for the prices he got,” said one source.

This exclusive “right to supply” means that leading PACS suppliers such as Agfa, Siemens and Ferrania may find themselves frozen out of the English NHS market, or reliant on trusts buying directly from them. 

Though trusts retain the financial independence to buy from whomever they choose it seems certain that only nationally negotiated contracts will be funded centrally. "You have to buy LSP PACS to get national money," said one hospital IT director. 

“For PACS to be affordable a balance has to be struck between choice and cost,” said the national programme spokesperson.

No details of the total anticipated value of installing PACS in all English NHS hospital trusts, or of the balance between national and local investment, have yet been released by either the national programme or the selected suppliers – GE, Kodak and ComMedica, and Philips.

Some £60m of central funding will be invested in PACS this year.  One leading supplier said that the balance between national and local funding was not clear, but added that the money committed so far was "not enough" and added that even with discounts PACS represented a “significantly hefty bill”.

One trust IT director told EHI that, based on the experience of his trust, procuring PACS for 178 trusts in England would be at least £1m per year each over ten years, together with additional costs for the network upgrades needed to support PACS and hefty implementation costs.  He estimated that the true total cost of PACS across England could be upwards of £1.75 billion, even after national programme discounts. 

What appears clear is that the national programme has negotiated pricing for a “vanilla” PACS infrastructure, which trusts will then have to add to meet local requirements. "The vanilla PACS will be in place and funded centrally," he predicted.  “What is not clear is the area of services and maintenance.”

The national programme spokesperson said: "We are confident that independent trust boards will see the value of ordering PACS through LSPs."  The spokesperson went on to add that the additional costs to be met by trusts would be offset by the savings PACS should deliver.  “The cash-releasing benefits from PACS will fully meet this requirement.”

However, the trust IT director said that because PACS was categorised as an additional service, outside the core bundle of LSP services, it was not mandatory for trusts to purchase PACS from LSPs.  "The contract specifically says that PACS is an additional service and trusts only have to buy core bundles from their LSP."

One option he suggested would be for trusts to take only modular components of PACS, or only implement it in certain departments, but all the evidence indicates that the benefits of PACS were only realised when it was implemented enterprise wide.  "To be effective financially and operationally it has to be all-pervasive."

He added that even if the national programme had done a great job on negotiating discounted prices on PACS, systems still had to be implemented.  "You’ve still got to implement and fund that implementation locally."

The credibility of the three year deadline for implementation to be completed also raised eyebrows. “It’s palpably rubbish”, said one source who called on the national programme to focus on delivery.  "Let’s stop doing deals and focus on implementation."

The industry source consulted by EHI described what he believed had been bought. “They have bought a template for PACS implementation."  He added that this appeared to be "local and cluster-wide PACS, covering CR, storage, and the ability to add in other disciplines.”  Trusts could take that and add in what they wanted locally, he said.