Reducing IT Operational Costs in the NHS: A Proposal

Introduction

The National Health Service (NHS) is a UK publicly funded health organisation. It was launched in 1948 to deliver primary and secondary healthcare services. The primary healthcare delivered by NHS consists of GP practices, optician health services, pharmacies, walk-in centres, and NHS Direct. The secondary healthcare consists of care trusts, mental health trusts, emergency and care trusts, and NHS trusts. Since its formation in 1948, the NHS has grown to become the largest publicly funded health organisation in the world. It presently employs approximately 1.7 million people, of whom roughly half are clinically qualified. NHS England is the biggest healthcare provider in the UK, catering for approximately 52 million people, with around 3 million people treated every week.

One of the major strategic focuses of the organisation is to put information at the heart of decision-making in order to improve the quality and standards of care and to increase efficiency across the English NHS and adult social care sector (National Health Service, 2009, p. 4). More importantly, NHS aims to reduce the burden of data collection and ensure that adequate resources are devoted to the storage, collection, analysis, and dissemination of data, and to make positive changes regarding clinical services. To achieve this objective, the UK government approved an information technology (IT) project for NHS to deliver efficient clinical services to the UK population. Despite this ambition, the IT department within NHS faces several challenges in the effective operation of IT policies.

Internal and External Context of the Problem

The objective of this report is to investigate the issues related to IT operations management within the NHS IT department, identify the challenges facing the department in implementing IT policies effectively, and provide recommendations on how to reduce the costs associated with IT service delivery.

The NHS information technology programme is one of the largest IT programmes in the world, with project expenditure reaching approximately £12 billion. The major drivers for its implementation are to enhance effective data storage and to minimise medical errors. More importantly, the implementation of information systems within the NHS is intended to support patient care. Despite the major benefits anticipated from the project, it faces significant challenges. Evaluation of the NHS IT programme reveals that operational inefficiencies have been the major setback, leading to rising operational costs (Hendy, Fulop, Reeves, et al., 2007).

While the success of NHS IT operations relies on the proper functioning of information systems within clinical practices, persistently high costs within the IT profile have been a major concern, sometimes leaving the organisation short of funds. Hackney and McBride (2003) point out that the major problems underlying the challenges in NHS IT operation have been attributed to a lack of effective management within the organisation. Prior to the IT project's implementation, the use of IT was limited, and where systems did exist, the technology was archaic, incompatible, and diverse. This lack of effective IT infrastructure led to the full-scale implementation of a new IT programme. While the new IT system represented a promising development, a lack of qualified and experienced IT staff hampered the benefits the organisation might otherwise have derived. Within some hospitals managed by NHS, people without IT backgrounds were drawn in to serve as IT managers. In one hospital, a nursing manager was asked to manage a large nursing management information system. Additionally, information systems were procured according to government direction without an adequate understanding of their intended purpose. There are also issues related to the operational strategy of the programme. The NHS IT department suffers from an acute shortage of staff, leading the organisation to outsource IT services to third-party providers to manage and operate its existing systems.

IT services were mostly provided through an outsourcing arrangement with Computer Sciences Corporation (CSC). This made use of contractual terms and conditions negotiated between the Department of Health and CSC, and was delivered via a leveraged arrangement under which the NHS Information Centre could buy services on a per-account basis, making use of pre-negotiated resources, both technical and human (National Health Service, 2009, p. 5).

Managing IT service capacity within the NHS has been a persistent challenge. Analysis of the issues has revealed unacceptable delays in response times for service requests and a high volume of queued requests. The NHS's long-term objective is to integrate effective IT systems for the smooth operation of the organisation. However, if the value of technology declines or its implementation falters, there is a danger that data collection exercises will not be translated into effective management information systems or, ultimately, into effective patient care. Part of the challenge also lies in the way management approaches IT issues and operational strategy (Willcocks & Mark, 2009).

Since 1998, the NHS executive set a target to have an electronic health record system in place by 2005. However, due to the complexity and politics surrounding the project, only 3% of the project had reached completion by 2002. The major factors contributing to this delay were inadequate planning and financial pressures elsewhere within the organisation. While the NHS IT project is the largest public IT project ever undertaken in the UK, problems achieving effective information flow and resolving confidentiality issues were cornerstones of the approximately 30% programme failure rate. The IT implementation failure experienced at NHS Wessex Regional Health Authority caused the government to lose approximately £43 million of taxpayer money. In the wake of the Wessex regional project failure, the National Audit Office evaluated whether the project was likely to provide good value for money. Jeffcott and Johnson (2006) argue that management lacks effective risk management practices within the IT department. Effective IT operations require the organisation to evaluate its current approach to risk management for new technology. NHS also lacks an effective risk management strategy for implementing modern technology, and despite the introduction of new systems, the organisation continues to face clinical litigation for clinical negligence.

Statement and Analysis of the Problem

Boddy et al. (2009) point to the external context of the IT problem within NHS. The authors reveal that power politics at the central government level are a contributing factor to the challenges facing the organisation. Power — understood as the ability to influence others to act in a particular way — has been used to limit investment in NHS IT capacity. The central government has constrained funding for the recruitment of qualified IT staff and for the training of existing personnel. Hendy et al. (2007) support this argument by noting that ministers and top civil servants have acknowledged that the NHS is experiencing budget deficits, forcing NHS trusts to deprioritise the IT department relative to other organisational objectives. This financial difficulty, emanating from the centre, has been transmitted directly to the problems affecting the IT department.

The implementation of IT within the NHS was intended to enable a major rationalisation of the organisation — gathering patient information to be accessible to health practitioners and enabling the development of large, centralised IT systems. However, several years after the IT programme's initiation, untidy legacy arrangements remain within the IT department. There has been additional complexity and uncertainty with regard to the NHS information system environment. While NHS has claimed to have achieved a record of accomplishment in IT, many medical practitioners and nurses still make limited use of IT infrastructure.

NHS was founded in 1948 to provide healthcare for rich and poor alike, eliminating the prioritisation of care based on social class. Despite this founding vision, several quality failures have been associated with healthcare delivery. NHS has provided poor performance compared to international benchmarks. There has been a growing incidence of bacterial infection. Waiting lists within NHS hospitals continue to grow. The patient waiting lists remain high compared to the European average, and while NHS has claimed reductions, there is a general view that some hospitals have manipulated the figures. More importantly, NHS has struggled to pass quality control tests.

To address these problems, NHS implemented an IT policy, treating IT as a strategic asset capable of enhancing organisational efficiency. Despite this, a lack of funding to develop in-house IT staff has contributed to the inefficient use of IT systems. Priority was not consistently given to IT across all departments, and operational problems persist alongside a lack of initiative to modernise existing systems.

Willcocks and Mark (2009) argue that part of the problem lies in the method NHS uses to implement management and information policies. A key factor is the pressure placed on managers to achieve targets through short-term programmes and annual performance reviews. The need to deliver results quickly has prevented managers from adopting appropriate timescales for implementation. The long-term objective of NHS is to provide IT services at both the district and regional level; however, IT policy remains controlled by the regional body. Many district managers still have little experience implementing IT for organisational efficiency, and there is scepticism about the ability of some new computer systems to deliver the required results — scepticism sometimes rooted in previous negative experiences. At the regional level, there is limited direct engagement with computer systems, and training for IT staff is largely confined to hands-on experience and basic instruction. Regional management frequently confuses strategy with implementation, and as a result NHS has continued to outsource IT services to external providers, generating high operational costs.