<br>Event
<br>On 8 December 2003, the U.K. NHS announced the winners of three contracts worth £2.7 billion over 10 years: the national application service provider (NASP), and the London and Northeast local service providers (LSPs). The NASP will deliver a national data spine containing summary patient records for all 50 million people in England. Each of the five LSPs will install and maintain computer-based patient record systems at all hospitals in a region. Consortia led by BT Group won the NASP and London LSP contracts. A consortium led by Accenture won the Northeast LSP contract. BT's patient record vendor for London is U.S.-based IDX; Accenture's vendor for the Northeast is U.K.-based iSOFT.
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<br>Analysis
<br>It makes sense for the NHS to choose the same vendor for the NASP and the London LSP. One of the biggest challenges of the whole NHS IT program will be to ensure the seamless, integrated flow of high-quality patient data between the national data spine and the five LSPs. The test bed and showcase of the integration effort will be the London LSP because of its political significance. With BT responsible for both contracts, the integration effort will have less chance to dissolve into finger-pointing between uncooperative vendors.
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<br>Many analysts were surprised that BT won the contracts over competing consortia led by IBM. We believe that in the final days of negotiations BT substantially lowered its prices and improved its terms. In addition, the political sensitivity of these contracts made it more likely NHS would award them to a British company.
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<br>The London and Northeast LSP contracts appear to hurt U.S. clinical IT vendor Cerner. Cerner was the patient-record vendor for the IBM-led bid in London and led a consortium bidding for the Northeast. However, Cerner remains in the running to become the patient record vendor for the three other regional LSPs.
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<br>Attention now turns to the three remaining LSP contracts, the winners of which will likely be announced by year-end 2003. To minimize overall risk, the NHS has made it clear it wants a variety of suppliers. The winning companies will face the challenge of building systems of unprecedented scale and scope, to tight time scales and with stringent penalties for failure. Whether the contract amounts agreed with BT and Accenture will adequately fund the projects to achieve their operational goals remains to be seen.
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<br>Analytical Source: Jonathan Edwards, Gartner Research
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