Bad news piling up for IT overhaul of health system

Companies that won the lion's share of the work on the 6 billion ($16 billion) project to overhaul Britain's decrepit National Health Service computer systems were required to sign up to an unusual clause in their contracts.

Before they could get their hands on these potentially lucrative deals, project boss Richard Granger insisted that BT, Accenture, Fujitsu and Computer Sciences Corporation agree not to talk to the press about their work.

It was an attempt by Granger to stop the drip-drip of bad news that had bedevilled previous Government IT projects. The companies duly obliged.

Until this month, when Accenture was forced to break the vow of silence on the project, known as the NHS National Programme for IT (NPfIT). The management consultancy revealed that losses on its two NHS contracts had reached between US$110 million ($154 million) and US$150 million and it would not make a profit on them until 2007.

Was this the first sign of cracks appearing in the 6 billion project?

Opposition parties believe there is political capital to be made out of attacking NPfIT. But the truth is rather more complex.

The Government has billed NPfIT as "the biggest change to healthcare since the creation of the NHS in 1948", and this is not an overstatement.

NPfIT will connect 30,000 GPs to 300 hospitals via broadband internet, allowing electronic access to healthcare records, prescription information and research into illnesses.

Against a background of problems with other large Government IT projects, the Government decided to do things differently.

Granger, the former head of the Government team at accountants Deloitte and now one of Britain's highest-paid civil servants on a salary package of 250,000, carved the country into six regions and handed out contracts worth around 1 billion apiece to the winning bidders.

He also issued separate contracts to run a central database and the broadband network.

The idea was that if a company failed to deliver on its promises then he could penalise it without affecting the rest of the project.

BT, which has the greatest exposure to the NPfIT project with contracts worth 2.1 billion, has been fined more than 4 million.

Sources say Accenture's problems with NPfIT stem from subcontractors missing deadlines.

"This has serious implications for the suppliers because they won't get paid if they don't deliver," said Tola Sargent of IT consultancy Ovum Holway.

The higher risks and relatively small contract sizes meant many of the "traditional" IT outsourcing companies weren't keen to bid.

Research published last week shows that companies such as EDS, Hewlett-Packard and IBM are losing market share to firms such as BT and Atos Origin, which have a strong presence in the healthcare sector.

Granger's approach is also causing problems for the doctors and consultants who will use the new IT systems.

The National Audit Office in January criticised the Department for Health (DfH) for failing to engage properly with practitioners on the project. A survey by Medix the next month found that just 21 per cent of GPs interviewed were enthusiastic about NPfIT compared with 56 per cent a year before.

Support among hospital doctors had also fallen, from 75 per cent last year to 51 per cent.

One of the main causes of concern among medical staff is that the new system of computerised medical records will compromise client confidentiality.

And last month Granger warned that a nationwide shortage of IT professionals was causing "big, big problems". This is hitting the public sector hardest because it cannot compete with the wages of the private IT firms.

Computer Weekly has found that of the 20 NHS trusts in London due to launch the new IT systems next year, 19 are at "red status" - which means a major deadline could be missed.

- INDEPENDENT