Editor’s blog Tuesday 10 August 2009: the Tory IT review hullabaloo, and more

Good evening. This is another dispatch from abroad. We are away to celebrate my birthday, so there will be intermittent bits and pieces, but less for the next ten days or so. I know you’ll cope.

Localising NHS IT: the Tory solution to the CFH dilemma
The Conservative Party’s independent review of the NHS IT programme is out, and what in interesting document it is.

Thew accompanying press release states that the Conservative policy will:

“Seek to dismantle Labour's central NHS IT infrastructure, delivering its benefits through local systems instead.

“Halt and renegotiate the contracts Labour have signed for IT service providers to prevent further inefficiencies.

“Stop imposing central IT systems on the NHS, instead allowing healthcare providers to use and develop the IT they have already purchased and developed, within a rigorous framework of interoperability.

“Encourage the use of open source across the public sector. As healthcare IT is freed from the constraints of Labour's central programme, both private sector and open source software will develop.”

Jolly good! Except there is a small problem, as pointed out in a well-argued piece by the ever-reliable Michael Cross in The Guardian, the review does not suggest that the NHS IT programme should be dismantled.

Quite the opposite.

Read codes all about it
To give the Conservatives due credit, they published the whole review. You can read it. Unfortunately, it appears the majority of hacks, unlike Michael Cross, failed to do so.

More worrying is their would-be reliance on a product that doesn’t exist, in the online individual health records. Yes, there is extant, advertising-funded Google and Microsoft presence in the ‘market’, but these are not compatible with what is currently in progress in the NHS.

More to the point, the review admits that Google have so little interest in the healthcare IT review for the party likely to form the next UK government that they declined to provide requested information.

The renegotiation of local service provider (LSP) contracts by region could have fascinating legal fall-out. It will enrich lawyers greatly. The number of signed and legally-enforceable contracts mean that proposals for localism could sit ill with protestations that interoperability will be the key. In the most technologically advanced bit of the NHS IT-wise, yes, 60% of GP practices use EMIS. This means that the not-insignificant minority of 40% do not.

Yet localism has been a missing element of NHS IT, as wiser heads than mine pointed out years ago. The paradox of assumed efficiency through a national-level procurement has brought us to where we are.

Conundrums abound with NHS IT. It is surely tempting to look at the mess caused by introducing hospital patient administration systems in parts of the English NHS, and conclude that the whole thing should be junked. The siren song of despair, though journalistically easy, is probably not the best way to learn much.

If you want to know the time, ask a management consultant
Who could show the way through the mess? The DH seems to believe that Mark Britnell’s new employers KPMG may have solutions, according to E-Health Insider.

The KPMG review will look specifically at NHS Direct and NHS Choices, and is being run separately to NHS Connecting For Heath. An intriguing comment on the E-Health Insider report, which appears to come from Hertfordshire GP Dr Gerald Bulger, is that KPMG were involved with the original GP fundholding financial software in the early 1990s. It’s just like déjà vu all over again …

Elsewhere, HSJ reports the end of the ex-PCT provider services opting out deadline; notes that Sir Ian ‘What Do You Mean, We As The Regulators Should Have Noticed Mid-Staffs Were Killing People?’ Kennedy will be joining the healthcare practice at lawyers Beechcroft; and intriguingly, finds the first proposal for vertical integration between a PCT and an acute trust in pursuit of foundation status.

Pulse also spot the first FT taking over a GP practice, in Sunderland.

Monitoring the changes in FTs in recessionary times
These latter two are intriguing and timely, because the 2009-10 annual risk assessment report from FT regulator Monitor has warned that FTs may have made over-bullish assumptions about their future earnings, particularly in 2010-11. The full report is here.

Monitor's figures suggest that:
The 115 foundation trusts authorised as at 31 March 2009 are forecasting a combined income of £26.2 billion in 2009-10, representing growth of 4.2% on incomes in 2008-09. Their combined plans deliver a net surplus of £353 million (1.3% of income).
They are forecasting continued growth in revenues after 2009-10 (2.1% in 2010-11 and 1.6% in 2011-12), with similar growth in costs (1.6% and 1.1%).
Over the three year period, EBITDA margins are forecast to grow from 7.6% to 8.5%.
Planned growth in income is a continuation of historic trends, but may not adequately reflect the potential for lower future NHS funding in the later years of their plans. This has led to Monitor’s concerns that these forecasts may appear overly optimistic, particularly in 2011-12.
There is a significant increase in forecast capital expenditure of £1.9 billion compared to £1.3 billion in 2008-09. Capital expenditure is forecast to reduce in later years. Cash balances are forecast to decline from £2.8 billion at 31 March 2009, to £2.2 billion at 31 March 2010.
104 foundation trusts (90%) are declaring a green governance risk rating for 2009-10. This means that they expect to meet all or most of the national standards and targets throughout the year. Ten have declared a rating of amber and just one trust has declared a rating of red.
Total membership of foundation trusts grew 11% to 1.5 million at 31 March 2009. Foundation trusts held 353 elections during 2008-09, 283 of these with more than one candidate - meaning 80% of elections were contested.

In one of the wiser moves of recent times, Monitor have, as a result of their concerns, “required all FTs to submit a ‘downside’ forecast for 2011/12 by the end of September. These will outline what their financial plans could look like given a more pessimistic view on funding”.

Primary colours
Meanwhile, primary care is not exactly the home of good news, even if Swine Flu has peaked despite the comedy hekpline for the worried well Tamiflu-stockpiling pillocks. A recent report on GP practice-based commissioning from Manchester’s National Primary Care Research and Development Centre found the ‘refresh' of PBC lacks clarity, and the means of making it happen remain unclear.

And the DH’s own PBC survey figures, as GPrecently noted, show reducing levels of engagement in PBC. Not quite rejuvenation, then.

PBC defenders of the faith NHS Alliance recently came out in favour of the national tariff for payment by results (PBR) being a maximum price from which negotiation should begin, rather than a minimum. Perhaps they see this as having some potential to create traction on unbundling the tariff, such that delivering more services in primary care starts to look financially attractive to commissioners as well as to providers.