The U.K. National Health Service (NHS) should terminate and replace contractors if they do not meet deadlines for its massive upgrading of England's health-care IT systems, a government audit report released Friday said.
The recommendation, from the National Audit Office (NAO), reinforces moves by the NHS to put pressure on contractors for prompt delivery of products and services for the 10-year program, the largest civilian IT project under way in the world.
It means additional scrutiny for the four main contractors with a slice of the project, which is divided into five geographic areas in England. BT Group, Japan's Fujitsu Services and Computer Sciences of El Segundo, California, have one region each, while Accenture has two.
Those companies have subcontracted with other suppliers, which have struggled to meet deadlines and fallen under financial pressure. Richard Granger, director general of Connecting for Health, which oversees the IT project, has warned suppliers and canceled a £90 million (US$166 million) e-mail contract with Electronic Data Systems two years ago for underperformance.
The four main contractors haven't been afraid to make their own strategic moves. In April 2005, Fujitsu dumped IDX Systems as its main subcontractor, switching to Cerner, based in Kansas City, Missouri.
BT, responsible for the London region, has retained GE Healthcare, which acquired IDX in January. But the Financial Times reported earlier this week that BT may be considering replacing GE Healthcare with Cerner.
A change by BT would mean the program would be dependent on two main software application providers while a third, iSoft Group, is having financial difficulties, wrote Tola Sargeant, analyst at Ovum in London, in a commentary.
The NHS said it is holding prime contractors responsible for delays and won't pay suppliers until services are delivered and working.
"The suppliers have borne the cost of overcoming difficulties in delivering the software and not the taxpayer," the NAO said in its report.
The NAO estimates the total cost of the National Program for IT at £12.4 billion. The figure is nearly double earlier government estimates.
The modernization plan is built around the Care Records Service, which will make electronic patient records accessible through a nationwide network called the National Data Spine, both of which BT is contracted to build.
The National Data Spine went live in June 2004, but is about 10 months behind in development, the NAO said. The Care Records Service will be deployed in a pilot program at the end of this year, about two years later than planned.
BT is also building the New National Network (N3), an enterprise-class WAN (wide area network) with broadband DSL (Digital Subscriber Line) and fiber-based Ethernet.
Despite a few delays, the NAO cited increased use of other new systems, such as "Choose and Book," which allows patients to electronically book appointments. About 12 percent of bookings are now made using the system. An electronic drug prescription system is running in about 15 percent of doctor offices in total, the NAO said.
But the speed of the IT revamp is at risk due to a shortage of IT skills, and training is recommended, the NAO said.
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