U.K.

Dept of Health: Prescription for Disaster

By Laton McCartney, Baseline Magazine, November 13, 2006

In late September, Accenture, the global management and technology consultancy,

announced it was walking away from a $3.73 billion contract as an information-technology
services provider on the world's biggest non-military I.T. project, a hugely ambitious and
complex attempt to transform England's entire National Health Service through technology.
Accenture, which failed to respond to numerous requests for interviews, did not say why it
was exiting the National Health Service (NHS) project, but earlier this year it had set aside
$450 million to cover potential losses from its work in England. Its exodus represents the
latest in a series of setbacks and missteps that have plagued the highly controversial program
since its inception.

In scale, the project, called the National Program for Information Technology (NPfIT), is
overwhelming. Initiated in 2002, the NPfIT is a 10-year project to build new computer
systems that would connect more than 100,000 doctors, 380,000 nurses and 50,000 other
health-care professionals; allow for the electronic storage and retrieval of patient medical
records; permit patients to set up appointments via their computers; and let doctors
electronically transmit prescriptions to local pharmacies.

To date, the NHS has delivered some of the program's key elements. For example, in late
October Health Minister Lord Warner announced that 1 million patient referrals to specialist
care have been made through a Choose and Book service that allows patients to book
appointments electronically. As of August, 97% of doctors' offices were connected to a new
national network, N3, which is a major component of the project.

Yet, many pieces of the project—including deployment of key electronic records software—
have been delayed and the program's cost has ballooned.

The NPfIT was initially budgeted at close to $12 billion. That figure is now up to about $24
billion, according to the National Audit Office (NAO), the country's oversight agency. And it is
as high as $28.4 billion, according to other estimates. Even the lower of those two amounts is
more than the price tag for building the English Channel Tunnel or Boston's massive Big Dig
project, considered to be the most expensive civil project ever. Worse, the funding established
to pay for the system has, temporarily at least, dried up.

Among the problems the project has encountered:

• One key health-care software subcontractor, IDX, was dropped from the program in April 2005 after
one of the project's prime contractors, Fujitsu, "lost confidence" in its abilities, according to the
NAO. IDX failed to respond to requests for a comment.
• Another key health-care software maker, iSoft, is some two years behind schedule in delivering a
new electronic health-care system called Lorenzo, according to British newspaper The Guardian.
• A 2005 report issued by the NPfIT stated that the migration of data from computers in health-care
practices into systems that complied with a new national health-care records system would take far
longer than the five years originally projected by the NHS' Connecting for Health (CfH), the unit
overseeing the NPfIT project.
• The N3 network, deployed to connect the country's health-care workers, has been hit by more than
100 system and network failures. Most recently, in July a network outage disrupted for three days
mission-critical computer services such as patient administration systems.
• While a June 2006 NAO report praised aspects of the CfH's project management, notably the
procurement process and its use of project management software, key elements of the project's
management have come into question. The NAO report cited a need for strengthening project
management skills, pointing out that "the shortage of such skills is an immediate risk to the timely
implementation of the program." Speaking at the Towards the Electronic Patient Record (TEPR)

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 conference in Baltimore in May, former NPfIT liaison manager Phil Sissons noted that as a result of
the CfH's top-down, authoritative approach to change management, many hospitals are strongly
resisting the NPfIT. "There's no ownership of this system because it is being imposed," he said.
• The project has little support among health-care workers. For example, only 38% of the country's
doctors feel the project is a priority for the NHS, and just 13% believe that the program represents
a good use of NHS resources, says a recent survey by Medix, an independent market research
consultancy in England.

A report issued recently by two British Members of Parliament, Richard Bacon and John Pugh,
concluded: "The [NPfIT] … is currently sleepwalking toward disaster. It is far behind schedule.
Projected costs have spiraled. Key software systems have little chance of ever working
properly. Clinical staff is losing confidence in it. Many local trusts are considering opting out of
the program altogether." Local trusts are the regional agencies that administer the country's
national health-care programs.

"There have been enormous problems," says Martin Brampton, founder of Black Sheep
Research, an independent U.K. technology and research consultancy. "We now have a
situation where several years of increased levels of expenditure have largely disappeared into
top salaries and I.T. projects, with little evidence of much change in the experience of
patients. And the future looks bleak, since the spending on NHS I.T. is by no means over."

In an e-mail to Baseline, the CfH responded: "It is unfair to speculate about failure. The NAO
stated that the Program was well managed and has made good progress. Central budgets
[core budgets for Local Service Providers, or LSPs] have not risen."

A Bold Vision of Lifelong Electronic Patient Records

Specifically, the systems and information-technology services the NHS is attempting to deliver
include the NHS Care Records Service (NHS CRS)—individual electronic NHS lifelong care
records for every patient in England (Scotland, Northern Ireland and Wales are not part of the
system), securely accessible by the patients and those caring for them. This is also known as
the National Spine. Electronic transmission of prescriptions is also in the offing.

Other pieces of the project, already partially functional, are Choose and Book, which provides
patients of hospitals or clinics with convenience in selecting the date and time of their
appointments; and N3, which provides information-technology infrastructure and broadband
connectivity for the NHS so patient information can be shared among organizations.

To supervise the NPfIT, the NHS created a unit, Connecting for Health, to deliver "new,
integrated I.T. systems and services to help modernize the NHS and ensure care is centered
around the patient," according to the agency's Web site.

If the CfH succeeds, the benefits could be enormous. "This is very much a pioneering effort,"
notes Gartner European health-care analyst Jonathan Edwards. "No country has ever
implemented anything on this scale. If successful, it could be of great value to health-care
providers around the world. It's important to understand the program and learn from its
successes and challenges."

"It is the boldest vision that any government has ever taken with respect to I.T.—and it
comes against a background of high-profile failures in big government computer projects,"
adds Sean Brennan, author of The NHS IT Project: The Biggest Computer Program in the
World … Ever!

David Craig (a management consultant writing under a pseudonym) and Richard Brooks, co-
authors of Plundering the Public Sector, have reported on some of those failures, among them

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part of an e-government initiative in 2000. At the time, Customs and Excise launched a
program to provide e-services. By June 2004, the department had spent close to $200 million
on its e-VAT (value added tax) service. According to the U.K. Parliament's Public Accounts
Committee, the project proved a failure because the new system was more complicated than
the previous paper-based version.

And what if the NPfIT project fails? "If it goes wrong, with the all too depressingly familiar
sight of budgets and time scales spiraling hopelessly out of control, our government will have
caused the largest hemorrhage of taxpayers' money from essential [medical] services into the
pockets of management and I.T. consultants in British history," Craig and Brooks wrote in
Plundering the Public Sector.

In the Beginning, Bill Gates Pitches Tony Blair

Established in 1948, the National Health Service is now the largest health-care organization in
Europe and has been recognized as one of the best health services in the world by the World
Health Organization. Controlled by the British government, it is also a vast bureaucracy,
employing more than 1 million workers and providing a full range of health-care services to
the country's 50 million-plus citizens.

Organizationally, the NHS is managed at the top by the Department of Health, under Health
Secretary Patricia Hewitt. The Department of Health oversees 10 so-called Strategic Health
Authorities (SHAs), which provide supervision to:

• Primary Care Trusts (PCTs), which number slightly more than 300. PCTs oversee 29,000 general
practitioners and 18,000 dentists.
• NHS Hospital Trust. These 290 entities administer about 1,600 hospitals as well as treatment
centers and specialist care.
• NHS Ambulance Trusts, Acute Care Trusts and Mental Health Services Trusts.

The inspiration to digitize this far-flung bureaucracy first surfaced in late 2001, when
Microsoft's Bill Gates paid a visit to British Prime Minister Tony Blair at No. 10 Downing St.
The subject of the meeting, as reported by The Guardian, was what could be done to improve
the National Health Service. At the time, much of the service was paper-based and severely
lagging in its use of technology. A long-term review of NHS funding that was issued just
before the Blair-Gates meeting had concluded: "The U.K. health service has a poor record on
the use of information and communications technology—the result of many years of serious
under-investment."

Coming off a landslide victory in the 2001 general election, Blair was eager to move Britain's
health services out of technology's dark ages. Gates, who had come to England to tell the
CEOs of the NHS trusts how to develop integrated systems that could enhance health care,
was happy to point the way. "Blair was dazzled by what he saw as the success of Microsoft,"
says Black Sheep Research's Brampton. Their meeting gave rise to what would become the
NPfIT.

At the time the NPfIT was conceived, no one could possibly have imagined that it would
balloon into such an ambitious and complex effort. "It was initially a procurement exercise,"
notes a health-care I.T. strategist who was involved with the NHS for years and who agreed to
talk to Baseline on the condition that his name not be used.

"Procurement, and specifically cutting down on the cost and the bureaucracy of buying
computer systems, was always a major objective of the program," adds author Brennan.

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Brennan, who has held senior-level I.T. positions with the NHS and in 2002 launched Clinical
Matrix Ltd., a technology and strategic consulting company, says that when the NPfIT was
conceived in 2001, hospitals throughout the U.K. were dealing with multiple vendors, many of
them small to midsize U.K. systems and software houses. Several major U.S. firms had gone
after the U.K. market, only to withdraw because of the red tape and expense involved.

"Vendors would spend as much as $100,000 in marketing a system to a single trust," Brennan
says. "Every hospital typically bought a collection of systems and paid up front rather than
waiting till implementation was complete."

The predictable results: a hodgepodge of systems throughout the NHS, many of them
incompatible; and excess costs. The June NAO report summarized the situation thusly: "In the
past, procurement and development of Information Technology (I.T.) within the NHS has been
haphazard, with individual NHS organizations procuring and maintaining their own I.T.
systems, leading to thousands of different I.T. systems and configurations being in use in the
NHS. These are provided by hundreds of different suppliers, with differing levels of
functionality in use across the country. The large number of different and incompatible
systems has meant that the NHS's I.T. system infrastructures have been built up to create
silos of information, which … are not shared or even shareable."

After a February 2002 meeting at 10 Downing St. chaired by Blair and attended by U.K.
health-care and Treasury officials as well as Microsoft executives, the NPfIT program was
launched.

In quick order, a unit was established to purchase and deliver I.T. systems centrally. To run
the entire show, NHS tapped Richard Granger, a former Deloitte and Andersen management
consultant. Granger signed on in October 2002 at close to $500,000 a year, making him the
highest-paid civil servant in the U.K., according to The Guardian.

In one of his first acts, Granger commissioned the management consulting company McKinsey
to do a study of the massive health-care system in England. Though the study was never
published, it concluded, according to The Guardian, that no single existing vendor was big
enough to act as prime contractor on the countrywide, multibillion-dollar initiative the NHS
was proposing. Still, Granger wanted to attract global players to the project, which meant he
needed to offer up sizable pieces of the overall effort as incentives. The result: He divided
England into five regions—London; Eastern; Northeast; Northwest with West Midlands; and
Southern—each with a population of about 10 million.

Each of the five areas would be serviced by a prime information-technology vendor, known as
a Local Service Provider (LSP).

The process for selecting vendors began in the late fall of 2002. It was centralized and
standardized, and was conducted, Brennan and others say, in great secrecy. To avoid
negative publicity, NHS insisted that contractors not reveal any details about contracts, a May
2005 story in ComputerWeekly noted. As a byproduct of these hush-hush negotiations, front-
line clinicians, except at the most senior levels, were largely excluded from the selection and
early planning process, according to Brennan.

"We would challenge the assertion that there has been secrecy," the CfH told Baseline in an e-
mail. "There has been a great deal of engagement with key stakeholders."

NHS offered 10-year service contracts to the LSPs for the five regions, worth slightly less than
$2 billion each. According to the CfH Web site, the LSPs "are responsible for delivering
services at a local level and supporting local organizations in delivering the benefits from

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these. They ensure the integration of existing local systems … while maintaining common
standards."

In conjunction with the software suppliers they select, they are also responsible for
implementing clinical and administrative applications, which support the delivery of patient
care and enable acute-care trusts and PCTs to exchange data with the National Spine. In
addition, the LSPs provide the data centers to run the applications.

Selecting Suitable Vendors

Concurrent with the LSPs' work, NHS needed vendors to take on three other mega-projects.
The first was construction and management of the National Spine, which would evolve,
Brennan claims, into "the biggest computer database in world history. … It is the core service
in the program; it will bring a number of benefits to the NHS including access to integrated
patient data, prescription ordering, proactive decision support and best-practice reference
data."

Second was Choose and Book, which the CfH describes on its Web site as "a national service
that for the first time combines electronic booking and a choice of place, date and time for
outpatient appointments."

Finally, there was the N3 national network, which Granger in public statements described as
"one of the largest virtual private networks on the planet." N3 is a secure wide-area network
that integrates enterprise-class broadband DSL, fiber-based Ethernet and other data network
services as needed. It is designed to provide a seamless, efficient and cost-effective service
linking NHS sites.

As described by the CfH on its Web site, N3 will enable electronic communication among
different elements of the NHS and support Choose and Book, electronic prescriptions, transfer
of patient information and many other initiatives that are part of the NPfIT. It will replace
NHSnet, the NHS's current private communications network.

With so much money at stake over the 10-year life of the contracts, more than 30 major
players vied for the business, but, Brennan says, "I think some of the vendors didn't realize
how complex the program was going to be."

However, at least one group, a consortium that included Deloitte and Lockheed, opted at the
last moment not to bid, fearing the project was "simply too risky," according to a member of
the vendor team who asked that his name not be used.

Accenture proved the big winner. In December 2003, the Bermuda-based firm was named LSP
for two regions, Eastern and Northeast; Computer Sciences Corp. (CSC) was awarded
Northwest with West Midlands; BT beat out IBM to get London; and a Fujitsu-led alliance won
the Southern region. BT was also given the contract to build both the N3 network and the
National Spine, while yet another vendor, Paris-based I.T. services provider Atos Origin
(formerly SchlumbergerSema), was commissioned to provide Choose and Book.

The LSPs, according to the June NAO report, were to act as prime contractors for their
respective regions, "who have to decide how best to deliver the service specified by the NHS
CfH, assembling and integrating software and other products from a range of services." Each
LSP was informed that it was to pick its own software vendors and subcontractors.

"The CfH wanted only to deal with the LSPs," Brennan says.

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Two of the four—BT and the Fujitsu group—selected Burlington, Vt.-based IDX (now part of
GE Healthcare), an established health-care services and software provider, to develop health
records software. Accenture and CSC went with iSoft, a U.K.-based supplier of health-care
software and the largest company in Europe devoted to health care.

Significantly, the NHS's contracts with the LSPs had one thing in common: Vendors wouldn't
get paid until they delivered the goods—working systems. This meant that the subcontractors
would also lose out if the project faltered.

Meanwhile, the NHS signed an Enterprise Subscription Agreement with Microsoft for 350,000
desktops for Office Professional, Windows desktop operating systems and various client access
licenses. That agreement has since escalated to allow NHS to use up to 900,000 desktop
licenses. In a separate agreement, Microsoft also is developing a common user interface for
the CfH. "This would provide common formats despite differences in the underlying software
being used," says Gartner's Edwards.

What Ails the NPFIT?

The last of the contracts—the deal for BT to build the N3 network—was signed in February
2004. "The focus of the national program has now moved to the challenge of ensuring the
timely implementation of high-quality I.T. services to help deliver a patient-centered NHS,"
Granger wrote in a 2004 article put out by the NHS. "Once in place, patients will benefit from
a modern, I.T.-enabled NHS, every time they come into contact with it. The electronic
revolution will help deliver coordinated convenient and integrated care, placing the patient at
the heart of the NHS."

As Granger defined it, the NHS was building "a single electronic health-care record for every
individual in England; a comprehensive, lifelong history of patients' health and care
information, regardless of where and when and by whom they were treated."

Additionally, the NHS would provide health-care professionals with immediate access to
summaries of care encounters and clinical events held in a national data repository, and
support the NHS in collecting and analyzing information and monitoring health trends to make
the best use of clinical and other resources, Granger said.

Before this utopian, cradle-to-grave vision of a centralized, monolithic national health-care

system could become anywhere near a reality, however, a succession of daunting obstacles
had to be overcome.

For one thing, there's the sheer size of the country's health-care system. Between 2002 and
2003, NHS served 52 million people; dealt with 325 million consultations in primary care, 13
million outpatient consultations and 4 million emergency admissions; and issued 617 million
prescriptions.

Granger and the CfH had also inherited what Brennan terms "a mixed bag of incompatible
computer systems, islands of technology that may work well in isolation but which cannot
communicate with other systems. This wasn't a greenfield opportunity."

All of the systems had to be replaced with systems that could interact directly with the
National Spine records system, but not before the data from the old computers was
transferred from the old systems to the new, Spine-compliant systems.

Considering that the NHS alone, Brennan estimates, had 20,000 computers, that was a

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sizable task.

Then there was the little matter of managing the contracts and the LSPs effectively. Some
critics of the program such as Brampton have charged that the CfH has dealt with perceived
vendor deficiencies largely through Granger's threats to punish poor performance, and that it
hasn't been flexible enough in dealing with unexpected problems confronted by the
contractors.

A heavy hand on the whip, in other words, and little in the way of a carrot. At one point,
Granger likened the NHS project to a sled and the LSPs to huskies. "When one of the dogs
goes lame and begins to slow the others down, they are shot," he said, according to The
London Times. "They are then chopped up and fed to the other dogs. The survivors work
harder, not only because they've had a meal, but also because they have seen what will
happen should they themselves go lame."

"He's not a diplomat," says John White, iSoft's director of corporate communications, of
Granger, "but you need to be tough to manage something like this."

Spelling out the challenges confronting the NHS, Edwards wrote in an April 2005 Gartner
report: "The larger the project, the greater the risk of managing vendors inadequately. Putting
the prime contractors at risk for not delivering value is a sound idea. The challenge is one of
balance. The stringent nature of the CfH contracts, which allow for payment only upon
completion, reduces the scope for flexibility. It also increases the danger that when problems
arise, the CfH and the prime contractors will become absorbed in arguments over contractual
details, rather than concentrating on overall goals."

"The attitude was that the LSPs were responsible for solving all problems," Brampton says.
"But you need to manage the contracts and the vendors, especially on something of this
magnitude."

The CfH responds that this wasn't the case. "There is a mix of central, supplier and trust
project management resources deployed in support of implementations," the agency stated to
Baseline in an e-mail.

Another challenge spelled out by Edwards in April 2005 is the need for the CfH to remain
focused on clinical adoption and change management. "Ensure that clinicians are adequately
consulted and involved from the earliest stages of the I.T. program," Edwards wrote. "Allocate
sufficient funds for change management and training. Identify and develop clinician
champions in different geographic and functional areas of your organization. Work with them
to determine what effects the program will have on the way clinicians practice medicine."

Edwards noted at the time that in a then-recent survey of clinicians in England, only 5%
stated that the CfH had adequately consulted with them. "Evidence indicates that CfH has
made insufficient progress in getting the wider community of clinicians involved and in
motivating them to adopt the new applications," he noted.

This didn't happen at the program's outset. "Clinicians couldn't be brought in early on,"
Brennan explains, because of the secrecy surrounding vendor negotiations.

One consequence of excluding front-line health-care professionals from the early phases of
the program, says the consultant, is that it fell largely to the I.T. vendors and the bureaucrats
to create the system: "To a large extent, the result is a black box NHS is trying to sell to
physicians who were not engaged from the outset." That black box is flawed on a number of
counts, says the consultant. Among them, he claims, is that the program is too focused on

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administrative needs and not enough on clinicians' concerns.

Another challenge with the vendors was that in the early stages of the project, the LSPs,
according to Brennan, focused on the easier applications and establishing links from the
existing general practitioner systems to the National Spine. That should have been a relative
cakewalk. A confidential report commissioned by NPfIT that was leaked to the U.K. newsletter
E-Health Insider in April 2005, however, showed that the job of transferring 10 years or more
of data from existing practice-based systems into the Spine-compliant systems that were
being provided by the LSPs was far more complicated than had originally been anticipated,
requiring clinical and computer expertise that often wasn't readily on tap. Typically, it took up
to six months and cost around $9,000 per practice to enact the transfer, the report stated.

The overriding problem, however, was the software that was being developed. Both iSoft and
IDX had to write some of the software for the CfH from scratch and to specifications
established by the CfH. As an example, White, iSoft's corporate communications director,
notes that one of the requirements for the clinical applications was that they had to have a
communications interface that would enable them to transmit data to the National Spine.

iSoft was writing a new core application set called Lorenzo at its development center in India.
Similarly, the IDX system, Carecast, was being written from the ground up in Seattle in
conjunction with a team from Microsoft.

The difficulty was that the programmers, systems developers and architects involved didn't
comprehend some of the terminology used by the British health system and, more important,
how the system actually operated, the CfH conceded. The solution: In August 2005, the CfH
announced it was looking for at least 100 clinicians to spend several weeks in India and
Seattle working hand-in-hand with developers to anglicize the new software and "make sure
their product is fit for purpose."

Waiting for Lorenzo: Software Needs Major Surgery

In selecting iSoft as their clinical and administrative software vendor, both Accenture and CSC
were banking on iSoft's Lorenzo application suite, which at the time was in development. It
was being touted as a next-generation health-care system based on Microsoft's .NET software
development platform.

"This is a significant step toward fulfilling our commitment to deliver an integrated care
records service for individuals in the East and Northeast," said Ken Lacey, global managing
partner of Accenture's Health & Life Sciences practice, in a news release when his company
signed the iSoft deal in June 2004. "Ultimately, this service will enable the NHS to provide the
right information to patients and clinicians at the right time."

"This release of Lorenzo demonstrates our ability to produce comprehensive, leading-edge

health-care applications for delivery by third-party organizations," said Tim Whiston, CEO of
iSoft, in the same news release. "We are delighted to work with Accenture to deliver an
application service that supports the information management requirements of an entire
health community."

Whiston was speaking of the first release of Lorenzo, which provides basic security and
communications. But at the time there wasn't much to Lorenzo beyond this first layer. The
second layer, services, according to iSoft's annual report for the year ended April 30, 2006,
consists of development building blocks. Elements of Lorenzo's services architecture and tools,
the report noted, were being tested in Germany. The third level, solutions, provides end-user
modules. Early Lorenzo user modules are being tested to replace third-party applications in

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early adopter sites.

Those like Brennan who saw early versions of the software were impressed with features such
as its clear navigation. "It was a very good demonstration model," says Brennan, who was
given a preview. Problem was that the delivery date kept getting put back.

A July 2006 Gartner report on iSoft touched upon several of the key reasons for the delays.
"Large-scale products such as iSoft's Lorenzo typically require substantial investment following
early implementation to rework certain aspects," the report noted. "iSoft appears to have
seriously underestimated the time and effort necessary to develop the Lorenzo applications
suite."

In January 2006, almost two years after Lorenzo had been scheduled for deployment, iSoft
announced in a news release "that delivery of iSoft application solutions to NHS trusts will
occur, in general, later than previously expected by the company."

This meant that under the collect-on-implementation contract NHS had signed with its LSPs,
neither Accenture nor iSoft would be generating revenue. In a Catch-22, this also left iSoft
short of the cash it needed to finish developmental work on Lorenzo. For the year ended April
30, 2006, it reported a loss of more than $600 million. Acting chief executive John Weston,
who would resign in June, said that the previous year had been a "turbulent" one and that a
stream of negative publicity had damaged the firm's reputation and customers' willingness to
sign contracts with it.

At the time these slippages began occurring, iSoft was offering a number of existing health-
care applications, most of them obtained through earlier acquisitions of other software
vendors including Torex and Northgate Information Systems. In 2001, it had also signed an
agreement with Eclipsys, a Boca Raton, Fla.-based health-care solutions provider, for the code
to the company's Sunrise Clinical Manager, an enterprise medical records solution that
Eclipsys claims provides secure, immediate access to patients' complete records. As part of
the same deal, iSoft is partnering with Eclipsys to develop health-care software applications
for the international market.

With the ongoing delay of Lorenzo, specifically layers two and three, both Accenture and CSC
found themselves in a major quandary. Should they continue to wait for Lorenzo or lock into
the older, existing applications?

"Either way, it's a tough call," Brennan says. "You're rolling out a system that's going to
change clinical behavior." Since no one really knew when, or even if, Lorenzo was going to be
delivered, there was a big risk in waiting 18 months to two years in hopes that the solution
would be ready. On the other hand, Brennan says, if CSC or Accenture committed fully to the
interim systems, they would have to roll out a second system, Lorenzo, when it eventually
came out. "Clinicians are adverse to change," Brennan says. "Getting them to switch to
another new system after 18 months or so would be a huge challenge."

A CSC spokeswoman in the U.K. declined to comment on this on the grounds that CSC would
only deal with British publications regarding its work on NPfIT. Accenture, as noted earlier,
failed to respond to numerous calls and e-mails. Accenture opted to wait and roll out Lorenzo.
In contrast, "CSC took a different approach," says Joe Vafi, an analyst who covers
government I.T. for Jefferies & Co., an investment banking firm.

CSC chose to implement iSoft's existing line of products. "We use iSoft iPM for our Patient
Administration System, iCM from iSoft for clinical functionality and management, the Ormis
theater system, and Evolution for maternity systems," a CSC spokeswoman explained. The

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last two are also iSoft products.

Adds iSoft's White, "CSC went ahead and used existing iSoft solutions, then used a Lorenzo
communications interface [level one] to transmit the data from those solutions to the National
Spine."

While waiting for Lorenzo, Accenture, according to White, focused on working with general
practitioners—in contrast to CSC, which was focusing almost entirely on hospitals. The
problem here from Accenture's point of view, White says, was that general practitioner (GP)
implementation was extremely difficult because there are so many general practitioners and
the NHS had given them an option called GP Systems of Choice. This meant the doctors didn't
have to follow Accenture's lead in selecting a system but could choose on their own. This, in
turn, made the transfer of data from old systems to the Spine-compliant systems being
provided by Accenture more complicated.

Accenture's decision to wait for Lorenzo rather than use existing iSoft software had far-
reaching financial implications. In March, Accenture announced that it was setting aside nearly
a half-billion dollars to cover expected losses because it couldn't collect its consulting fees
from the NHS until its work was complete. The company's CEO, Bill Green, said at the time
that he hoped to renegotiate the NHS contracts. Instead of showing any of the flexibility that
Gartner's Edwards suggests is critical in dealing with vendors, however, Granger, who is
described by Brennan and others as "robust" and "resolute," dug his heels in.

At the March 2006 World Health Conference in Paris, he claimed that Accenture shouldn't
blame anyone else for its troubles and joked oddly that Accenture's announced losses would
be enough for the company to hire "every Bulgarian hit man to take me out." If Accenture
thought it was going to get a new deal, it was sadly mistaken. "We came up with a new model
where the people doing the work took the completion risk," Granger said. And if Accenture
tried to bail out, it would have to pay at least 50% of the value of the contract for disrupting
the project, Granger threatened.

As for Accenture's problems implementing Lorenzo, the CfH issued a statement calling for
certain Accenture managers to be kicked off the program. "We believe that the issues are
within Accenture's control and have requested key personnel changes within the Accenture
organization," it said in a statement issued in April. The message was clear: CSC had
managed iSoft effectively as a core supplier without Lorenzo. Accenture should have done the
same.

Indeed, in retrospect Accenture's gamble on Lorenzo seems increasingly ill-advised. In

August, a report produced jointly by CSC and Accenture stated that "there was no believable
plan for delivery … no well-defined scope and therefore no believable plan for lease." White
says it will finally be ready in 2008.

On Sept. 28, Accenture announced it was walking away from the NHS. It agreed to repay
more than $100 million to settle its legal obligations under the contract—roughly $800 million
less than the figure Granger had originally cited as a disruption fee. "It would have been in no
one's interests to enter a dispute," the CfH said in an e-mail to Baseline. The same day, CSC
announced it was taking over Accenture's effort. A sled dog had fallen; another had gotten to
eat its dinner.

Meanwhile, there were concerns with GE Healthcare's IDX as well. According to the NAO
report, both Fujitsu and BT had agreed to develop a Common Solution Program that provided
unified governance arrangements. This would ensure that the application was developed just
once for the NHS in both the Southern cluster, Fujitsu's region, and in London, which had BT

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for an LSP. By mid-2004, the CfH became concerned about the effectiveness of IDX, according
to the NAO report. By April 2005, with little progress seen, Fujitsu, according to the NAO, lost
confidence in IDX's ability to deliver the Common Solution project. Fujitsu subsequently
replaced IDX with Cerner, the Kansas City, Mo.-based health-care I.T. company. The
replacement of IDX, NAO says, put Fujitsu 18 months behind schedule.

IDX (GE Healthcare) failed to return phone calls requesting comment. A Fujitsu spokesman
said the company was unable to respond to inquiries because the CfH wishes to handle all
media calls themselves. In August, BT also dropped IDX for Cerner, though a Cerner
spokeswoman says a contract between BT and Cerner has not been signed yet. Both parties
have signed a letter of intent, she explained. BT has not responded to e-mailed inquiries.

According to an August Gartner report, in the 2 1/2 years BT struggled to deploy acute-care
systems in London, it has only achieved one implementation of the GE Healthcare/IDX
Carecast application.

Health-Care Executives Under Fire

Despite such setbacks, Granger vigorously asserts that the CfH is creating numerous benefits
to the NHS on a timely basis. He points to the many positives detailed in the NAO report as
proof of this. In addition, at a recent GC Expo, a U.K. technology conference for the public
sector, he enumerated what the CfH delivers in a typical month. On his list:

• 600 new N3 connections.

• 3 Patient Administration Systems implemented.
• 500,000 patient records converted and cleansed; 14,000 smart cards issued, allowing secure
access to new systems.
• 8.5 million X-rays and other images stored.
• 1.8 million pathology results sent electronically to general practitioners.

Of course, Granger is far from alone in extolling the benefits of the NPfIT. "Just from
standardizing and centralizing the procurement process, the savings have been enormous,"
Brennan points out. The NAO report claims that deals negotiated by the CfH with Microsoft
and other suppliers are expected to save about $1.5 billion. Still, the departure of Accenture,
by far the CfH's most important contractor, has sparked questions about the CfH's overall
approach and its long-term viability.

Noted Members of Parliament Pugh and Bacon: "The program badly needs to be simplified,
and likely future costs need to be brought down. The fundamental error made when setting up
the program was to assume that centralized procurement of single systems across the NHS
would be more efficient than local decision-making guided by national standards."

In late August, the British Computer Society expressed a number of worries about the project,
stating in a letter run by ComputerWeekly: "Our main concern [is] that a centralized system
will not work in the complex organizational structure of the NHS. A distributed architecture
would have been more flexible. We also have major problems with the lack of architectural
planning about the detailed structure of the Electronic Health Record … this is an entity which
does not fit well with other I.T. methodologies and needs considerable thought." A distributed
architecture would have been far more flexible, the BCS noted.

"The availability of key information about patients—both clinical and demographic—at any
place where it is needed and at any time is the core value of the approach," the CfH

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responded to concerns about its centralized approach.

While some criticism is political and comes from the Tory camp, there is considerable
justification for at least some of the concerns about the NPfIT that go beyond cost overruns
and schedule slippages. Most serious perhaps is a lack of support shown for the front-line
clinicians, an indication that the CfH has fallen well short in its change management efforts.

Comparing the result of the recent Medix survey of doctors and nurses with a poll the
organization conducted three years ago shows a big change in health-care worker attitudes
about the project. In the earlier survey, 67% of British general practitioners said they believed
the project was an important priority for the NHS. Only 38% feel the same way today, while
just 13% believe that the program represents a good use of NHS resources. Only 5% of
British MDs say they've been given adequate consultation regarding NPfIT, up 3% from the
old Medix survey but still a poor showing.

Nurses responded in much the same way. Just 5% said they had received fully adequate
information about the NPfIT; 35% said they'd been give reasonably adequate information, and
25% said they'd been given no information at all. "That's pretty damning," Brampton says.
The CfH differs, noting: "We have undertaken a great deal of high-quality stakeholder
engagement and change-management work," in an e-mail to Baseline. There have also been a
number of seismic I.T. shocks recently that may indicate fault lines in the core I.T. services
the CfH hopes to provide.

As an example, in July, mission-critical computer services such as patient administration

systems, holding millions of patient records being provided by the CSC alliance across the
Northwest and West Midlands region, were disrupted because of a network equipment failure,
according to the CfH. As a result, some 80 trusts in the region were unable to access patient
records stored at what was supposed to be either a foolproof data center or a disaster
recovery facility with a full backup system. Every NPfIT system in the area was down for three
days or longer. Service was fully restored and no patient data was lost, the CfH says.

That was not the first such failure. In fact, in the past five months more than 110 major
incident failures having to do with NHS systems and the network have been reported to the
CfH, according to ComputerWeekly. The CfH responded in an e-mail to Baseline: "It is easy to
misinterpret the expression 'major incident.' Some of these could have been, for example,
individual users experiencing "slow running." We encourage reporting of incidents, and we are
open and transparent about service availability levels, which we publish on our Web site."

Finally, according to the NAO report, there has been slippage, in some cases substantial, on
many key elements of the program. For instance, the National Spine first went live as
scheduled in June 2004, but the milestones for building up its functionality have been delayed
by up to 10 months.

Delivery of the first phases of the CRS and the advanced integrated I.T. systems that are
central to the long-term vision for the program also are lagging, according to the NAO.
Meanwhile, Choose and Book is running well behind schedule, the NAO report notes, in part
because of the time needed by suppliers of existing systems to make their systems compliant.

Still, for every setback, Granger, CfH and Tony Blair's Labour Government announce a step
forward. Blair, in fact, is CfH's biggest ally. Addressing some 80 senior doctors earlier this
year earlier and, according to The London Times, sweating profusely under the bright lights,
Blair said, "The truth is that we have now reached crunch point where the process of
transition from the old system to a new way of work in the NHS is taking place. Each reform
was in its time opposed. Each is now considered the norm. The lesson, especially at the point

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of difficulty, is if it's right, do it. In fact, do more of it."

More recently in September, Blair toured hospitals as an opportunity to defend the NPfIT:
"This is going to be a place where people come from all over the world and say: 'This is how
health care should be done.'" Ironically, with Blair a year from leaving office, the NHS has run
short of funds, and recently reported a deficit of almost $1 billion—resulting in huge layoffs,
possible closings of hospitals, reductions in services and a mad scramble by Health Secretary
Hewitt to bring costs under control.

"The money is no longer there," says Gartner's Edwards. "There are no funds for
implementation or training." Given that by some estimates it will take yet another $15 billion
to get the NPfIT initiative fully functioning, that indeed might end up as the NPfIT's epitaph.

U.K. Dept. of Health Base Case

Headquarters: Richmond House, 79 Whitehall, London, England SW1A 2NS

Phone: 020 7210 4850

Chief Executive: Patricia Hewitt, Health Secretary

Chief Technology Officer: Richard Granger, Director General of I.T., National Health Service
(NHS)

Financials in 2005: The Department of Health has a budget in excess of 27 billion pounds
($50 billion U.S.).

Challenge: The National Program for Information Technology is a 10-year initiative to deploy
new computer systems, reform the way the NHS uses technology and, in the process, improve
services and the quality of patient care.

Baseline Goals
• Connect electronically more than 100,000 doctors, 380,000 nurses and 50,000 other health-care
workers.
• Store health information on 50 million people in England.
• Reduce the time it takes to send medical images, such as X-rays, from about four minutes to less
than one minute.
Player Roster
Patricia Hewitt, Health Secretary, Great Britain
Hewitt has consistently backed the NPfIT and other National Health Service (NHS) reforms, stating
recently that they were the only way to safeguard the future of the British health-care system. In
recent months, however, with the NHS's deficit approaching $1 billion, she has started implementing
what unions are describing as massive cutbacks and service reductions within the cash-strapped NHS
system as well as the privatization of many NHS jobs and services. Some observers fear NHS's fiscal
problems may jeopardize the NPfIT's future.

Tony Blair, Prime Minister, Great Britain

Blair was reportedly sold on the idea of revamping the entire British health services through technology
at a 2001 meeting with Microsoft's Bill Gates. Ever since, Blair has staunchly defended the program
despite cost overruns and setbacks. He touts the National Program for Information Technology (NPfIT)
as one of his government's greatest achievements. "This is going to be a place where people come from
all over the world and say, 'This is how health care should be done,'" the prime minister stated recently.

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Richard Granger, Director General of I.T., NHS
Granger was hired by NHS in October 2002 to modernize information technology for the entire British
health-care system. Granger divided England into five regions, giving out billion-pound, 10-year
contracts to so-called Local Service Providers, which would be responsible for implementing I.T.
initiatives in their respective regions. These agreements stipulated that the LSPs wouldn't get paid until
the systems they were implementing were functioning satisfactorily.

William D. Green, Chairman and CEO, Accenture

Under Green, Accenture won the biggest share of the NPfIT contract, but soon began encountering
delays with its chief subcontractor, U.K. health-care software provider iSoft. As a result, Accenture's
implementation schedule slipped badly, causing the consultancy to lose money on the project. After
Accenture set aside $450 million to cover its losses, Green said he was hoping to renegotiate with
Connecting for Health (CfH), the group supervising the program. When CfH head Richard Granger
refused to renegotiate, Accenture announced it was walking away from the deal—a contract worth nearly
$4 billion.

Bill Gates, Chairman, Microsoft

Gates is viewed as the godfather of the NPfIT because he reportedly sold Tony Blair on the benefits of
bringing the digital revolution into every doctor's office and hospital in Great Britain. In the process, the
British government signed an Enterprise Subscription Agreement (ESA) with Microsoft for 900,000
desktops for Office Professional Enterprise Edition 2003 and various client access licenses. Microsoft also
is developing a common user interface for CfH. Gates received an honorary knighthood in 2005.

Sean Brennan, Consultant and author

A longtime NHS official, and currently a consultant and frequent speaker on health informatics issues,
Brennan last year wrote a book on the NHS I.T. initiative, The NHS IT Project: The Biggest Computer
Program in the World … Ever! He writes a monthly column for the British Journal of Healthcare
Computing.

John Pugh and Richard Bacon, Members of Parliament (MPs)

Last summer Pugh, a Liberal Democrat from Southport, and Bacon, a conservative from Norfolk, issued
a scathing report on the NPfIT, saying the program is "sleepwalking toward disaster."

Technologies That Promise a Cure

In structuring the world's largest civilian I.T. program, the U.K.'s National Health Service is relying
mostly on vendor-supplied software packages. Here's a sample of some of the more important
technology that's being utilized.

APPLICATION PRODUCT SUPPLIER

Standardized database infrastructures Oracle 9i technology platform Oracle
Office package Customized version of Microsoft Microsoft
Office that incorporates the
needs of clinicians
Acute care Millennium health-care I.T. Cerner
platform
Clinical and patient management, patient iPM, PAS, iCM iSoft, Torex (iSoft
administration, pharmacy, lab, emergency, markets Torex
operating room systems application suite)
Standardized nomenclature HLI Language Lorenzo iSoft
engine Health Language Communications
interface
Enterprise infrastructure software Sun Java Integration Suite Sun Microsystems
Content management EMC Documentum content EMC
management platform
Project Time Line

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December 2001
Bill Gates visits Tony Blair at 10 Downing St. in meeting that will prove the genesis of the National
Program for Information Technology.

February 2002
At another meeting at No. 10, chaired by Blair and attended by U.K. health-care and Treasury officials as
well as Microsoft executives, the NPfIT program is unofficially launched.

June 2002
Program announced by National Health Service (NHS); Department of Health creates a unit, later to be
called Connecting for Health (CfH), to procure and deliver I.T. systems for NPfIT.

October 2002
Richard Granger hired as director general of NHS I.T.

February 2003 – February 2004

All major vendor contracts completed during this period.

June 2004
National Data Spine goes live, but NHS announces that efforts to build up its functionality have been
delayed.
Accenture signs deal with U.K. health-care company iSoft to provide as-yet-undeveloped clinical and
patient care software suite called Lorenzo for its two regions. Computer Sciences Corp. (CSC) also signs
up iSoft.

December 2004
Local Service Providers say first phases of implementation plan, which were scheduled for delivery in
December 2004, are now planned for a pilot form delivery in late 2006.

June 2005
Fujitsu, a Local Service Provider, announces that it is replacing software vendor IDX with Cerner.

November 2005
Granger slams suppliers for mounting project delays. Projected costs are now at 10 billion pounds and
ballooning.

March 2006
Accenture takes a $450 million loss on its NHS contract.

July 2006
CSC I.T. failure leaves 80 trusts without computer service.

August 2006
ISoft announces loss of 382 million pounds; Accenture and CSC conclude there is no believable plan for
Lorenzo delivery.

September 2006
Accenture pulls out of national program; CSC takes over its contract.

Project Planner: Calculating Costs of a Runaway-Project Recovery

By Sean Nolan

On today's project dashboard at your large health-care conglomerate: the status of the
ambitious $7 million development project to build a document management platform that
aims to integrate all of your acquired health systems and will pay itself down in its first year of
operation. The bad news? The project is eight months behind, and forecasting at 50% over
budget and 60% below functional requirements. The good news? Well, the project dashboard
works, anyway.

You've got a runaway project, and it will take some very hard decisions, and more money still,
to get it back on track. To make sure you throw some good money after the bad, you'll put

15
together a project recovery team of outside experts who specialize in cutting off the kind of
front-page disaster your project is hurtling toward. This project-within-a-project will spend six
months evaluating original requirements, scuttling pieces that are hopelessly off track,
refereeing the staff and vendor disputes that are paralyzing progress, and, ultimately,
completely reworking the original goals, budget and time line into a streamlined, executable
project plan.

"The very first thing to understand is, what is a project's definition of 'done'? Or even a small
part of 'done'?" says Rodney Macon, a project recovery specialist with 30 years' experience in
software development and project management, including lead roles for Fidelity Investments
and Electronic Data Systems. Expect to take two to three months to sort things out, Macon
says, and then another few months to reset the project plan, which you will review and recast
on a weekly basis.

But that doesn't mean the project grinds to a halt for six months. The key to a successful
turnaround is to keep at least some parts of the project moving—identify and achieve a couple
of small wins on the user interface, for example—while you reset the overall plan, trash the
chokepoints and build momentum, Macon says.

"Most projects get in trouble because of the basics," he explains. "Recovery is about getting
back to the basics: What will it take to get this project out the door?"

To see the details behind this Project Planner and fill in your own estimates, click on the "Get
the Tool" icon above and download the interactive worksheet.

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