Insider view: the curious case of the incentives

Tim Kelsey, the national director of patients and information, recently told eHealth Insider he is committed to creating “market place to beat all market places” in health IT; one in which small and medium sized companies will flourish.

Such an ambition is to be warmly welcomed, particularly after a decade of the National Programme for IT in the NHS.

In its early phases, it had a pretty disastrous impact on SMEs, and it’s a sad reflection of the past decade – and the billions of pounds spent – that the UK companies in healthcare IT are almost all at the small to very small end of the SME spectrum.

But to hope that a vibrant market will spontaneously arise by pushing existing vendors to open up systems and promoting an open data strategy seems like wishful thinking. Particularly if the market and terms of competition continue to be skewed in favour of incumbent vendors.

Building a vibrant market while dealing with the NPfIT legacy

NHS IT procurements still too often disqualify or discourage smaller suppliers from competing or taking part. Aside anything else, they are often extremely expensive to participate in, when there is no guarantee a contract will eventually be awarded.

At the same time, the aspiration to build an open market in which SMEs can thrive and the terms of the new Interim Agreement between CSC and the Department of Health sit uneasily together.

When the IA was announced in September, it was presented as offering NHS trusts that wanted to take Lorenzo, the electronic patient record that CSC had been contracted to deliver across the North, Midlands and East of England as part of NPfIT, the opportunity to do so.

The opportunity came with the chance to have software and support centrally funded for five years. This was clearly going to be an offer that many financially hard-pressed trusts would want to look at.

It was also presented as a way for the NHS as a whole to benefit from the much delayed but improving Lorenzo system that so much money had been invested in.

There is no question that a small but growing number of NHS trusts like what they have seen in Lorenzo.

In Humber and Morecambe Bay the system has two enthusiastic champions; and the first Lorenzo user group meeting was held recently – a milestone that some thought would never happen.

However, since the initial announcement in August very few details have been made available on the terms of the deal. How much would the NHS pay and what would it get in return? Just how interim was interim?

Incentives on offer

Earlier this month, eHealth Insider exclusively revealed that trusts were being offered incentive payments of £1m to take Lorenzo; on top of up to £4m implementation costs.

The introduction of these bonus payments is proving hugely contentious and disruptive. One immediate consequence is that NME trusts are pulling back from or axing live procurements and looking again at what they can get through the IA.

It’s a logical move, but one that inevitably creates delay. The risk is of further start-stop in a market that had begun to flourish with trusts making much needed investments.

Some suppliers are crying foul, saying the incentives are anti-competitive and that they are appearing to skew the market.

Where are the defenders of the deal?

Governments, and even individual government departments, can often find it difficult to carry through policy in a coherent, joined-up fashion. NHS IT is a prime example of how difficult it can prove.

What is more curious is how difficult it is to get anyone from the DH to explain the IA and the latest developments.

Since the publication of EHI’s article, the DH has been extremely coy about the incentives and declined to provide details about alleged inaccuracies in the report.

CSC has also clammed up. The DH doesn’t deny the existence of the incentives and bonuses, it just seems that it really, really doesn’t want to see them publicised.

Given that the whole logic of the bonuses and incentives must be to rapidly build-up a pipeline of trusts committed to take Lorenzo, this reticence is odd. Particularly if there is a case to be made that getting the system into use will benefit trusts, clinicians and patients.

So just how committed is the DH is to the IA announced back in the summer? The deal took almost three years to reach and involved CSC writing off a billion pounds. So you’d have thought that both sides would be very committed.

Significantly, however, almost all the senior personnel involved in reaching the deal, including Katie Davis, the former managing director of NHS Informatics, have gone. There is also a new secretary of state and ministerial team at Richmond House.

Tim Donohoe remains at the helm at NHS Connecting for Health, but in a few months it will be absorbed by the ‘new’ Health and Social Care Information Centre.

The NHS Commissioning Board, meanwhile, clearly wants to focus on more exciting things than the NPfIT legacy, as its first planning guidance, with its focus on patient record access and new data initiatives, makes clear.

This does raise the question of who is left to champion the IA between CSC and DH if it comes under sustained fire; as some inflammatory newspaper coverage last weekend suggested that it might.

Any such doubts though could be quickly dispelled if a minister or senior civil servant would provide clarity on the IA and the case for the incentive payments. There is surely a perfectly good case to be made. It just needs someone willing to make it…