The Department of Health has announced that it will centrally fund the capital and revenue costs of five Cluster Data Stores which are key components of the ambitious plan to roll-out digital Picture Archiving and Communication Systems (PACS) in England’s NHS.
The move is designed to alleviate ongoing concerns about the affordability of the (PACS) contracts signed by the National Programme for IT (NPfIT).
PACS is – in the jargon of the national programme – a ‘core service’ and the DH has signed contracts with local service providers (LSPs) that commit all trusts to use the PACS deals, but only capital costs are partially funded centrally.
Trust concerns about the affordability of the PACS deals they have been centrally committed to, and lack of clarity about pricing and what will be delivered under the deals, mean that as yet almost no trust has completed and signed off a full local business case for PACS.
The problem of getting trust business cases completed is highlighted in an 18 February letter to all Strategic Health Authorities from Margaret Edwards, the DH’s director of access. “In nearly all cases, Trust Business Cases for PACS have not been signed off to enable trusts to proceed with implementation,” she says.
EHI understands that even at the 12 ‘vanguard’ sites that are to be early implementers of PACS – due to go live from this spring and summer – some of the individual trusts have only been able to sign off a provisional and qualified business case.
The high revenue cost of the long-term Cluster Data Stores for medical diagnostic images has been a particular problem for many trusts. Extremely well placed sources familiar with the details of the PACS programme this week told EHI that the annual revenue cost for a typical trust for the Cluster Data Store was in the region of £180,000 – £200,000 per year.
Edwards’ letter announces that the DH has taken steps "to remove the funding of Cluster Data Stores as an obstacle to sign-off to Trusts Business Cases". The five Cluster Data Stores will be held as central assets and placed on the DH’s balance sheet rather than that of trusts.
The letters adds "The capital costs for Data Stores and the revenue costs for depreciation, capital charges and service charges will all be funded centrally and thus will not show in the Trust Business Case".
Edwards’ letter notes that the move will be at a considerable cost to the DH: “This represents a significant improvement in the revenue funded centrally.” No figure is given on what the additional cost centrally will be, beyond the £132m of capital funding already committed to trusts for the first three years of the PACS programme.
In the absence of any figures from the DH a very rough indication of the cost can be gained from multiplying the 173 acute and foundation trusts in England by the annual charge of approximately £180,000 per year for the Cluster Data Store. This would suggest that unless the DH has negotiated further discounts with LSPs it could now be paying around £31m per year for Cluster Data Stores.
Whatever the actual figure, Edwards’ letter makes clear that there is now a real urgency from the centre to see local trust business cases for PACS signed as soon as possible: "I would be grateful if you would help ensure that Trust Business Cases are now signed off."
She goes on to describe the timelines in the LSP contracts as "aggressive" and warns trusts of the potential penalties they may face if they fail to hit the centrally agreed contractual targets. "The contract places significant obligations on Trusts to avoid delays and penalties from the PACS supplier."
Together with delivering the benefits to PACS to patients and staff Edwards says "Implementing these plans is also essential in delivering the NPfIT commitments (established with PACS suppliers through their subcontract with LSPs) to achieve 80% roll out of PACs by March 2006 and 100% by March 2007."
Senior sources close to the PACS programme who spoke to EHI this week were all extremely sceptical whether these ambitious targets can be hit, and while welcoming the move on funding of Cluster Data Stores said serious issues remained with the overall affordability of the PACS contracts signed.
A further problem remains in the North East and Eastern regions, where no deal for PACS has been signed yet between the two regions’ LSP, Accenture, and the national programme. Even if a deal can be agreed, Accenture will then have to sign up a sub-contractor to actually deliver PACS. Only at this point will it be possible for trusts in these regions to develop meaningful business cases on PACS.