A promise to deliver at least 50% cuts in the pricing of Picture Archiving and Storage Systems (PACS) and make it a “deployable technology” came from NHS IT Director General Richard Granger in his address to Healthcare Computing 2004.

Local Service Providers (LSPs) are due to submit their latest proposals on how they would deliver Picture Archiving and Storage (PACS) to the national programme next week, but it remains unclear what level of funding is available nationally to support a PACS procurement.

With the national programme committed to delivering PACS to early adopter sites by the end of 2004 E-Health Insider understands that one approach under consideration is for the programme to select and pay for two suppliers to deliver systems to early adopter sites.  Suppliers behind the best priced, most rapid and most successful of these early implementations would then potentially be awarded much larger contracts. 

PACS suppliers at HC2004 were showing signs of anxiety. Granger told delegates on the final day of the conference that he had so far been able to negotiate price reductions of up to 50%.

"On PACS the owners of the IP (intellectual property) are responding to treatment," said Granger. “This will mean that PACS becomes an actually deployable technology.”

All the indications are that Granger and his team have been driving similarly hard negotiations with PACS suppliers as were previously carried out on the procurement of electronic care record systems, seeking to break down systems into discrete components and commoditise the pricing of PACS systems.

Unsurprisngly, suppliers took a different view on the value of their IP.  One leading PACS supplier spoke of his frustration of the national programme regarding modern, highly sophisticated PACS and Radiology Information Systems as simply image viewing systems, saying that this failed to take account of the huge ongoing R&D investment made in systems.

The PACS vendors contacted by EHI were extremely concerned about saying anything that might breach the stringent confidentiality clauses and non-disclosure agreements demanded by the national programme, but off the record some spoke of the picture on the PACS procurement being far from clear, and changing almost hour by hour.

One vendor told EHI that it was not at all clear whether the national programme actually had the funds from the Treasury to pay for PACs, which meant it could not offer suppliers volume and committed spend in return for cuts in prices. 

Another supplier told EHI that the national programme had said that it would go out to OJEC tender if it could not obtain the discounts in pricing it was looking for. 

Only six weeks ago the approach being pursued by the national programme was a national procurement, but about five weeks ago LSPs were asked to put together new proposals on PACS.  These proposals from LSPs are now due to be submitted to the national programme next week.