McKesson set for UK hospital return

McKesson, the number two supplier of NHS patient administration systems, is weighing a return to the English hospital market – a sector it had been due to quit by March 2010.

E-Health Insider has learned that the company now looks set not just to extend support for customers beyond 2010 but to offer them a new strategic clinical product, anglicised using their existing NHS experience.

McKesson failed to be selected as a systems vendor for England’s National Programme for IT in the NHS during the 2003 procurement, at which point it was the number two supplier to the hospital sector.

In 2006, NHS Connecting for Health signed a deal with McKesson to extend support for the 23 NHS trusts using TotalCare and Star to 2010, the point by which NPfIT was to have been completed.

The uncertain future of these NHS trusts has long been seen as a risk, with a further extension of the contract expected.

But EHI has learned that in February, the company took soundings from its existing NHS hospital customers at a special meeting in London, at which it sought to gauge what support it would have for a re-entry into the NHS hospital sector.

Charmaine McDonald, UK MD of McKesson told E-Health Insider that the response of February’s user meeting had been encouraging.

“Our customers need to know that they have the assurance we will still be there, and I need to know whether there would be 10-20 customers who would want to continue to be supported on the legacy product.”

She added: “We also told them that given changes in the marketplace we have given some serious thought to whether there is an opportunity to offer the marketplace a new startegic clinical product. But we would only do it if we had sufficient interest from our existing customer base.”

If McKesson is to not gradually fade into the sunset in the the hospital PAS market, as originally envisaged by NPfIT, a new product will be required to replace the ageing TotalCare and Star systems.

“There will come a time you don’t want to extend the product any longer. Our customners, unfortunately, have some difficult decisions that have got to be made.”

The plan under consideration would see McKesson continue to support customers past the March 2010 deadline while working on adapting a new EPR product for the UK market.

McDonald declined to comment but EHI understands that the EPR product being considered is McKesson’s Paragon system, sold in the US as a community hospital solution.

McDonald did, however, make clear that any new product brought to the UK would have to be anglicised and available in a timley fashion “If that’s going to take four to five years, that’s not worth it.”

She said McKesson planned to take a formal decision by June on whether to re-enter the market. As well as requiring support from existing customers it would “depend on a range of other things.”

One of these things, she said, would be to ensure that such a move fitted with the government’s requirements.

An indication of the changing environment came earlier this month when NHS chief executive David Nicholson spoke of the need to find where additional expertise could be found to help deliver NHS IT modernisation.

McDonald made clear that the change in position was in part based on the changing nature of the NHS IT market and McKesson’s assessment of the opportunities that might now be available.

"We still need some pieces to fall into place. We are a very conservative company and very dependant on the NHS.”

The McKesson UK MD added that the company would not need to win a government contract to re-enter the market. “All I would need is a fairly small group of existing customers. I’d be happy with that.”

McDonald says that in the six years since McKesson has worked hard on customer satisfaction and shown its ability – albeit after a slow start – to deliver into every NHS trust through the national HR and payroll programme.

Related article

Trusts can keep McKesson PAS systems to 2010

Link

McKesson US Paragon EPR overview