I am keen to open a forum for discussion about alternative routes and financing models.
If it can be established that there is too much of a gap between what is needed by the Trust, and what is provided by NPfIT, (and value-for-money can be satisfied) other options may be plausible. There has been discussion with other non-LSP-preferred vendors who are offering different financing solutions in an effort to get some market presence and a slice of the NHS pie.
I understand that Airedale NHS Trust in West Yorkshire has signed a managed service agreement with Siemens.
In a private finance initiative, the trust pays a usage fee and the vendor installs, manages, maintains and replaces incumbent PACS if applicable. VAT exemption can be provided if Trust accountants can establish a tight case and convince auditors that the managed service is not just a glorified lease agreement.
posted on Wednesday, July 07, 2004 - 03:21 pm
I understand that the North Bristol Trust is actively considering a non-LSP PACS procurement. I don't know the funding details. Martin Bell (IM&T Director) is reported as championing this at the management level; I don't have a Radiology contact name.
North Bristol has been seeking an alternate non-LSP route to PACS (for 3 long and hard years!), though as yet this has not been signed off so we cannot claim to have succeeded as yet. This scheme was ongoing before NPfIT PACS came along (even as an option!). The National Programme do, whilst leaving it down to local level to decide on whether to go LSP PACS or not, still place some pressure on people to take the LSP supplier offering. This is of course difficult if LSP/PACS contracts haven't yet been signed and therefore business cases can't be worked up - the result being stagnation. The National (optional) route to PACS has got to be an expensive one relatively speaking. An alternate managed service (and we have a statement from the VAT office in readiness) can be VAT free so there's a 17.5% saving straight off by negotiating contract type locally. Then there is the capital outlay, with LSP PACS that means the Trust pays twice for equipment, once to purchase and then again over the lifetime of the equipment in capital charges. As the specification for PACS was so generic there had to be an element of risk protection that would push prices upwards. Finally the LSP under the terms of their contract can add a fee in addition to the actual PACS costs. These four elements are likely to give a PACS that might be anything up to twice the cost of a locally procured system (who knows what these costs are when we don't have the LSP prices?). Of course any system has to comply with Section 115 and I do understand the desire to have same systems in place regionally. This helps with staff training costs, ease of exchanging data, simplification in reducing the number of required system interfaces etc. The National PACS data repository is a good idea in theory if N3 is delivered cost effectively and in a timely fashion and when NCRS is running to use as a front end for non-Radiology users to view any image from anywhere at anytime. Given the existing legacy PACS users out there, the numbers of systems from LSP's in England (Kodak, Philips & GE) and not forgetting the other parts of the UK not in the Nat. Prog. (even the Private Sector eventually?) there must be scope to have other / non-LSP systems integrated into this national image library long term?
For anyone using the NHSIA "Toolkit" to ascertain affordability just take care and make sure you fully understand how it has been worked up: 1. Examine the capital equipment line. I think it shows the equipment being introduced over 10 years so far as purchase / capitalisation is concerned. This would all be needed in the first year / implementation phase of course. 2. Assumptions are made that funding streams from film and chemistry increase year on year by calculating increases in activity. This would mean cost avoidance but not necessarily an income stream. Once PACS is in place most FD's would not be seeking to continually increase a film budget, especially where there is no purchaser buy-in to cover it. The PACS storage space would still need to accommodate the extra data however. 3. The cost avoidance from 2. over the project lifetime seems to be used as an income stream from day 1. None of these are strictly speaking wrong but if you didn't realise the gap in your income stream by using cost avoidance this could really come back and bite you later. On the face of it PACS would look very affordable in the Toolkit model. Using existing income however the gap over 10 years is considerable.
GE (my currently proposed LSP chosen PACS supplier) are a good company and have a good product, I am sure they can deliver a system tailored to each site by sitting down and working these out and then putting together a suitable site based project plan for each Trust. Having the resources to meet the needs of all sites in a short space of time is another thing entirely. Putting an affordable offer together given the constraints of how the charges have been put together may be inhibitive for purchasers.
I can't comment on why the existing structure has been arrived at as I am assure there are many and complex reasons for this. Trusts that need a PACS now for good clinical reasons, can adhere to 115 AND make a big saving on the contract should in my view be encouraged.
posted on Thursday, July 08, 2004 - 04:54 pm
I work within the NHS and am as frustrated as anyone with the lack of (an y) clarity around financial, commercial and technical details for delivery o f the national PACS programme. However, I think it is worth reflecting on t he aims of the NPfIT which is basically to deliver fully joined up, affordab le IM&T to the whole NHS to support patient care wherever delivered. The £ 2.3bn NPfIT programme is much bigger than just PACS, but if PACS is taken out b y individual Trusts it may seriously degrade the value of the whole program me. This issue has been compounded by PACS being an 'additional service' from the LSP which presumably you only buy if you have the money and you actua lly want it. Were it core and fully funded it would be a clearer issue.
It seems to be the case that non LSP PACS providers are understandably trying to cash in on the current confusion and present their own lower co st option. This way forward has serious implications including: PACS won't b e delivered to the same aggressive 'payment on delivery' based contract as other LSP NCRS services; linking non LSP PACS across organisations via th e national spine won't be within the LSP or PACS providers responsibility; the economies of scale negotiated by NPfIT will be diluted if many Trusts 'op t out'.
Personally I think the strategy from those of us trying to acquire PACS should be to put maximum pressure on NPfIT to finalise and communicate th e pricing and funding arrangements - and allow us to fully understand the product we are being offered. I recently attended a Southern Cluster PACS planning workshop with the slogan 'making PACS procurement easy' as the a im of the day. I don't think anyone leaving the workshop was anything other than confused and frustrated at the lack of answers to key questions and lack of a confident national PACS strategy for taking this whole programm e forward (encouragingly the LSP and PACS supplier were very convincing). Given that, I still think the NPfIT way can deliver the best value for mo ney and best community wide solution - stick with it but keep on the back of NPfIT!
posted on Thursday, July 08, 2004 - 05:16 pm
I wish that I could share David Payne's faith in this process. There is too little sign of activity from either the LSPs or NPfIT: the overall strategy is one of "talking about talks".
If this persists for much longer too much of the "promised" funding will dsappear into the pockets of consulting firms and assorted IT "hangers on" the LSPs will then be able to claim that the programme has insufficient funding to be achieved and the contracts voided with large "fees" as the only thing to show for it. If an LSP does not come up with a firm implementation plan soon (it is now 8 months since the LSP announcements) I personally cannot see anything coming out of this for Electronic records or PACS!
Here, here. I know that the FJA has just had a big bust up with one of its larger suppliers. This equates to more time in negotiations, meetings, money spent, time wasted etc. etc. Also, don't forget that no private company ever went into a PFI-type venture with any intention of coming out with anything less that a fat cheque. As Gordon Brown himself said, "thinking of investing in PFI? Who wouldn't?" Just because NPfIT has negotiated big cost savings on upfront expenditure doesn't mean the relevant companies won't claw it back through cleverly constructed SLAs etc later. I think the notion of independent RIS/PACS purchase is a useful stick with which to beat the LSPs and NPfIT.