Cerner “lowered prices, rather a lot,” to get into GDE “game”
- 28 September 2017
One of the most experienced and highly regarded NHS CIOs has said Cerner significantly dropped its prices to win new business through the flagship Global Digital Exemplar programme.
Speaking at the North West Informatics Skills Development conference in Blackpool last Friday, Paul Charnley, CIO for Wirral University Teaching Hospital NHS Foundation Trust, one of the leading Global Digital Exemplars and a Cerner reference site, said the US company significantly reduced prices to win GDE business.
“Ultimately, Cerner lowered their prices, rather a lot, to get into the game,” said Charnley. “We’re getting prices that nobody else is.”
The trade-off for Cerner appears to be move on prices now to gain a much greater market share and market entry for new products. Eight of the 16 hospital GDEs chosen by NHS England currently run Cerner, a number which may significantly grow depending on how the ‘follower’ programme develops.
Each of the acute GDEs are paired with so-called ‘fast follower’ sites, who are expected to take the same system as their GDE partner. Jeremy Hunt announced at NHS Expo on 12 September that Wirral will be paired with neighbouring Countess of Chester.
However, Cerner told Digital Health News that it had not negotiated with NHS England on providing discounts in return for greater market share. “Cerner can confirm that no such negotiations took place with NHS England,” the company said in a statement.
Asked whether the company had reduced prices reduced prices to GDEs and Fast Followers, the company replied: “Cerner’s pricing to clients reflects market dynamics, extent of product being purchased and services to support that.”
The statement continued: “All the GDE sites that we have partnerships with were long-time Cerner clients before becoming GDEs.”
Charnley told the 22 September Blackpool conference that subject to procurement Countess of Chester will be taking Cerner Millennium. The trust currently runs a Meditech EPR. “We have our fast follower, Countess of Chester – they are adopting our system, all of the logic within it, and all of the flows that our systems represent.”
He also strongly suggested that further Wirral follower trusts may come after Chester, and they too will take the same Cerner Millennium system. “We are talking to the rest of Cheshire and Shropshire on whether they would also want to be followers, and not slow followers.”
Charnley said that the intention was to ensure that work done first by Wirral can be templated and applied repeatedly, avoiding trusts having to rip out current systems and replace them with standardised systems without seeing any benefits. “We will be able to do this without everyone going back to the beginning and starting again.”
Much of this planned ‘blueprinting’ work will focus on trying to develop Lego-like reusable building blocks for standardised workflows and business logic and processes. The hope is that some of these will become system agnostic and applicable to any hospital.
The Wirral CIO said that he believed a similar pattern would happen across the North West, with another cluster of trusts standardizing on systems and processes, centred on fellow GDE Salford.
In an indication of how closely the GDE programme is being directed by NHS England, Charnley said he’d just received the final blueprint for what a future fully digitised acute trusts should look like and what capabilities it should have. “We’ve been sent slides on what the endpoint for GDE should be. It’s not HIMSS level 7, but it’s like it. I hope that will be shared widely very soon.”
As part of this future digital vision Wirral is pioneering population health management, with a practice in Wirral CCG becoming the first in the UK to start using Cerner’s Healthy Intent Population Health Management tool. The concept is based on joining up different patient data and ensuring that patients with chronic conditions are getting all the care they should and not falling through the gaps.
“I wanted to focus on cross-sector work, explained Charnley, who said Healthy Intent “semantically aligns data from Cerner Millennium and EMIS and so tells us for patients with diabetes, what should have happened, and what has happened.”
Wirral is beginning with diabetes, but plans to then move on to also cover asthma, COPD, coronary heart disease, stroke prevention, depression and a wellness register.
“Having these key measures available to clinicians and, ultimately, to patients, well help ensure they are getting the best care.”
He added: “In the US these tools used to lower health insurance premiums. Here in the UK we need to find ways to convince people that it will improve their health, keep them out of hospital and be there for their grandkids.”
15 Comments
IT’s the nature of the game between the NHS and the IT Suppliers. The IT Suppliers lose fortunes sometimes when doing business with the NHS, this must be clawed back, the IT Suppliers are not, unlike the NHS, able to run at a loss, if they do they will sink. Examples of loss: 1. Having to develop and maintain 2 code streams because some users will not move on to the the most recent tech; 2. Having to make minor cosmetic changes to the UI, which behind the scenes are very tricky, because certain groups of Users must be kept happy. Tech is v powerful NOW and if you have the right skilled people you can make changes (e.g. to a well designed DATA model) which would significantly improve things, if the IT Suppliers need to charge more for these changes to level the plhaying field then so be IT, the suppliers must stay financially afloat otherwise …. we all … lose out, don’t we …
I think its great that Cerner is pushing the boundaries with the NHS and Paul has exceptional talent to take this forward. My two main concerns would be : There appears to be very large costs to the NHS on Cerner projects e.g. Bradford has paid very large amounts of money to Cerner for a small ROI, and Trusts need to get smarter about contracts.
Secondly NHS Trusts should embrace smaller companies to continue to create competition and deliver the ground breaking solutions that many small companies struggle to implement, due to red tape.
Mo Rahman Patient Safety Director
If this was a commercial decision by Cerner, then fair enough. I don’t see the issue. I’m sure this happens all the time.
I’m sure the procurement would have followed the local Standard Financial Instructions…
Almost sounds like a non-story…
Exactly 🙂
My personal and HoNeSt opinion is that this just goes to show that market forces are not working properly when it comes to ourNHS doing business, and you can not lay the blame on the IT suppliers ! You can not buck the market. Globally, what’s happening NOW is more and more competitiveness, that is good because it means things will “get better”. You can not buck the market, not unless you are fortunate enough to have access to an infinite amount of money, if it’s your own fair enough, if it’s future generations then that is just not app_ropriate.
IMHO, Clive, you have there noted a symptom of the underlying malaise that afflicts our NHS. The legacy of its foundation, upon disparate and often competing institutions, means there has never been a unified authority that could dictate which aspects of service provision should best be managed locally and which nationally, to optimise overall efficacy and efficiency. Governments tinker at the edges, applying successive strategies inspired by their own particular political ideology, but these do little more than dress one wound while inflicting others. It seems obvious to me that were the welfare of the ‘person’ truely at the centre, the architecture of the health service would look very different than it does.
Out of interest what procurement routes are being used for fast followers to “take” the same system as their GDE partner? Surely a fair and open approach has to be taken and all EPR suppliers in the market need to be taken into consideration for such high value contracts not just suppliers that have been lucky enough to be live within a GDE site at the start point of this exercise.
We all know that selection of a supplier without procurement is clearly not legal. So what if a legal procurement process is followed and the Trust choose something other than their GDE partner – will the fast follower lose their funding?
We are advised that the GDE programme is there for guidance however it is starting to feel as though an unofficial procurement framework has been created which seems to bypass standard procurement rules and see trusts financially incentivised for choosing systems from a small group of suppliers with “GDE Systems”.
Any thoughts?
Our take on GDE is that the fast followers adopt the same / a similar approach, but not necessarily the same actual systems. Some GDEs are going for big all-singing-all-dancing systems like Cerner and EPIC, others have a more piecemeal approach with several smaller systems from different providers linked together through an integration engine. It’s the philosophy and strategy, not necessarily the systems themselves, that fast followers are adopting.
Regardless of the GDE initiative, here are existing framework agreements which all Trusts can legitimately use to procure new systems and services without having to go down an individual OJEU procurement route. Most, if not all, EPR systems are available under one or more such frameworks and orders can be placed without further competition being necessary.
The argument is that competition took place when suppliers made bids against the framework requirement. This approach saves both the NHS and suppliers money as it avoids needlessly replicating time and effort on both sides. Specific local requirements can be added to the local contract, so long as these don’t materially breach the framework requirements.
Typically Trusts specify integration with departmental systems and those of the local healthcare community as part of the local requirements. Other local variations to a framework contract might include system availability, mobile working in disconnected mode and compliance with legislation and data collection requirements specific to the type of Trust.
Of course individual Trusts have their own Standing Financial Instructions and a Trust Board might well choose to go down the more costly OJEU procurement path if they were of a view that they could obtain better value for money that way. NHS Improvement always seem to be keeping a watchful eye on things too, to help keep everyone on the straight and narrow 🙂
Health integration is NOT about integration “within” a Trust patch, it’s about the integration of care activity (and care activity DATA) across physical health care, social care and mental health care settings (i.e. the community) for the benefit of the PERSON @ a national level, not the Trust ! This should be happening nationally, not within a Trust. People working for the National H Service, especially those in Trust leadership roles, need to ask themselves not just which provider organisations they are working for but “who” the are serving, this is awkWARD. NEXT time they look at their NHS contact they need to be honest with themselves and others, not just those within the Trust they are working for. My personal and honest opinion is that far more DATA should be being controlled and managed at a national level because this will lead to improved efficiency within our NHS.
Clive – that might well be a logical approach, but the Health and Social Care Act 2012 has led to further fragmentation of NHS services, along with extending the “localism” agenda which formed part of the Conservative manifesto in 2010.
Around 17% of NHS services are now delivered by private or third sector organisations, neighbouring Trusts are competing with each other to deliver local services and different parts of a patient’s care pathways are often delivered by several organisations. The very least we need is for our EPR systems to be able to exchange data with local (Trust and healthcare community) systems to support the multitude of patient journeys.
Incidentally, ALL the National frameworks already include compliance with National data and interoperability standards, my example was simply an illustration of the local requirements which can and often are added to them to ensure a good fit.
As a patient advocate, as well as an IT professional, I agree that the patient/citizen SHOULD be at the centre of all our planning and that control SHOULD be centrally controlled and managed – sadly the localism agenda and the 2012 Act seem to be at odds with this.
Dave,
I agree with what you say, but I would add – what’s wrong with local “accountability” for operational and financial performance ? IT can and should be a “leveler”, a national approach to IT is the best way forward and my personal and honest opinion is that if the national bodies are not prepared to accept this and rise to the challenge then IT should be handed over to other organisations that are. Our national health leaders need to think very hard about just who they are accountable to, they need to speak up about what their personal and honest opinions are, or they may choose to stay quiet, in which case in my mind they are not leaders. IT could and should be being used to keep things as free and as fair as possible4all. NHS choices does give all people choice no matter where they ‘appen to live, north, south, east or west, but with regard to citizens access to THEIR health data, we have an unacceptably uneven playing field and you can not blame that on the technology !
As I have been quoted above I should make it clear that the prices I was talking about were not about “getting into the game” but indications about what happens when Trusts share resources and plan to use a combination of Cerner and NHS resources for implementation.
As co chair of the group looking at blueprints I have to say that the slides I was talking about indicate an end point not the charting of the journey to that point. It is not a central edict about ruthless standardisation but a way in which Trusts can work together to achieve new levels of digital benefits.
I agree with the previous comments. Reduced prices for Trusts to make progress on their plans for EPRs and communities to support population health management would be no bad thing.
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Mind yourself, Dave. No great fan am I but your supposition is dangerously defamatory there. My understanding is that Cerner is not only an active advocate of interoperability but their new pricing strategy applies to everyone, not just those on the GDE programme. Apparently, their approach is long-term and based on deploying a modular model of pre-priced, pre-configured components/content with very minimal customisation allowed before go-live. I could be being naive but, to my ears, it sounds like Cerner’s behaviour should be encouraged not arbitrarily or cynically dismissed solely on the basis of this articles tone.
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