PACS/RIS procurement wave opens market for new suppliers

First contract renewals show trusts are taking advantage of competition following death of NHS National Programme for IT

Trusts across England have completed the first major wave of procurement of picture archiving and communication systems (PACS) and radiology information system (RIS) following the death of the NHS National Programme for IT (NPfiT).

Research from EHI Intelligence, the research arm of eHealth Insider, shows that the digital imaging market for NHS trusts is coming to the end of the first of three waves of change that are creating opportunities for new suppliers to the marketplace.

There is going to be considerable activity in the market through to 2016, and trusts seem genuinely excited by the possibilities that are opening up for them

Under the NPfIT, regional suppliers were chosen, a move that meant the majority of companies were frozen out for the best part of a decade. But the decision to axe the programme after the admission that millions of pounds had been wasted means that as the original 10-year contracts come to an end, the market is opening up for the first time.

The initial wave of activity has been triggered by trusts in those areas where CSC was the local service provider (LSP) for PACS/RIS, and whose national contracts expire this June. They have either gone out to OJEU tender or made use of a framework contract drawn up by NHS Supply Chain to secure new deals or to secure their existing services.

The next two waves of activity will occur as trusts in those areas where Accenture and BT were the LSPs decide what to do as their national contracts come to an end in June next year, and as trusts making ‘tactical’ decisions in the first two waves move onto more ‘strategic’ solutions.

The original research by EHI Intelligence indicates that two thirds of all new PACS contracts and one third of all new RIS contracts so far have been tactical procurements, whereby trusts have procured for the support and maintenance of their current system for one to three years.

“When the end of the national contracts first came into view, there was considerable concern that the market would not be able to cope,” said EHI Intelligence market researcher, Lindsay Bell. “However, it appears that the refresh is happening in a fairly orderly fashion.

“Some forward-thinking trusts have got ahead of the game when it comes to securing new systems, while others are waiting to see what decisions they will make. There is going to be considerable activity in the market through to 2016, and trusts seem genuinely excited by the possibilities that are opening up for them.”

the tactical approach that so many trusts are taking could work in favour of incumbent suppliers in the future, because they now have an opportunity to show trusts that they can provide good value for money, good service and new products, free of the shackles imposed by the national contracts

The report, entitled Waving not drowning: a new analysis of England’s PACS/RIS market refresh , builds on EHI Intelligence’s analysis of the market last year, which predicted the waves of change and that GE Healthcare, the incumbent PACS supplier in the CSC clusters, was likely to struggle to retain its dominant position.

GE Healthcare has since lost half of its market share and trusts are awarding contracts to suppliers previously locked out of the national programme, such as Carestream, Insignia Medical Systems and Philips. Philips was in fact the first company to win a locally-procured PACS/RIS tender for the replacement of systems delivered through the NPfiT when it signed a deal with East Sussex Healthcare NHS Trust for a Sussex and Surrey PACS/RIS/VNA collaborative procurement contract.

“Despite this, the tactical approach that so many trusts are taking could work in favour of incumbent suppliers in the future, because they now have an opportunity to show trusts that they can provide good value for money, good service and new products, free of the shackles imposed by the national contracts,” Bell added.

A second report from KLAS, entitled UK PACS 2013: The View Is Changing reveals that 39% of healthcare providers in the UK are looking to replace their current PACS.

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