The festive season has seen no let up in activity in the UK’s NHS IT market. Hot on the heels of news that CGI had won a £60m/7-year ICT infrastructure services deal with the Central & North West London NHS Foundation trust (see CGI wins ITO deal with CNWL NHS Foundation trust) came confirmation that Alder Hey Children’s NHS Foundation Trust has chosen BT as its strategic ICT partner in a deal that could be worth £50m over ten years.
BT’s role will include providing Alder Hey with strategic planning, business transformation and consultancy services around the ICT strategy at its new state of the art hospital, which is due to open in September 2015. It is envisaged that BT will also support Alder Hey as it upgrades its existing Meditech electronic patient record system provided by FileTek to a newer version of the software (v6.0).
What’s not entirely clear from the OJEU contract award notice is exactly how the deal with BT is to be structured, or its value. The tender notice estimated the total contract value at £50m: c£500k for a pilot phase lasting one to two years and up to £5m per annum thereafter over a 7-10 year period. But we know that Alder Hey favoured a joint venture-type arrangement and ‘risk reward’ model, including the possibility of exploiting jointly-developed IPR. It’s therefore difficult to predict how lucrative the deal will be for BT, especially given that Alder Hey is far from the only hospital looking to exploit any IPR that it might develop, and hospitals - especially leading specialist ones - do have a tendency to want to do things their own way rather than follow someone else’s example. Nevertheless, Alder Hey is a high profile hospital and the deal is another good strategic win for BT in the NHS IT market (see also Telehealth moves closer with ESPO framework).
We expect 2014 to see continued contract activity in the NHS IT market. Some forthcoming contracts are replacing existing deals – including many National Programme contracts that are coming to an end – but there’s also a good chunk of ‘new money’ being spent on IT in the sector as Trusts play catch up on their IT investment and look to technology to help plug the NHS’ £30bn funding gap (for more see our UK Public Sector SITS Market Trends and Forecasts 2013 report if you’re a PublicSectorViews subscriber).
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