Waiting for LorenzoBy Baselinemag | Posted 2006-11-13 Print
The British government budgeted close to $12 billion to transform its health-care system with information technology. The result: possibly the biggest and most complex technology project in the world and one that critics, including two Members of Parliame
Waiting for Lorenzo
In selecting iSoft as their clinical and administrative software vendor, both Accenture and CSC were banking on iSoft's Lorenzo application suite, which at the time was in development. It was being touted as a next-generation health-care system based on Microsoft's .NET software development platform.
"This is a significant step toward fulfilling our commitment to deliver an integrated care records service for individuals in the East and Northeast," said Ken Lacey, global managing partner of Accenture's Health & Life Sciences practice, in a news release when his company signed the iSoft deal in June 2004. "Ultimately, this service will enable the NHS to provide the right information to patients and clinicians at the right time."
"This release of Lorenzo demonstrates our ability to produce comprehensive, leading-edge health-care applications for delivery by third-party organizations," said Tim Whiston, CEO of iSoft, in the same news release. "We are delighted to work with Accenture to deliver an application service that supports the information management requirements of an entire health community."
Whiston was speaking of the first release of Lorenzo, which provides basic security and communications. But at the time there wasn't much to Lorenzo beyond this first layer. The second layer, services, according to iSoft's annual report for the year ended April 30, 2006, consists of development building blocks. Elements of Lorenzo's services architecture and tools, the report noted, were being tested in Germany. The third level, solutions, provides end-user modules. Early Lorenzo user modules are being tested to replace third-party applications in early adopter sites.
Those like Brennan who saw early versions of the software were impressed with features such as its clear navigation. "It was a very good demonstration model," says Brennan, who was given a preview. Problem was that the delivery date kept getting put back.
A July 2006 Gartner report on iSoft touched upon several of the key reasons for the delays. "Large-scale products such as iSoft's Lorenzo typically require substantial investment following early implementation to rework certain aspects," the report noted. "iSoft appears to have seriously underestimated the time and effort necessary to develop the Lorenzo applications suite."
In January 2006, almost two years after Lorenzo had been scheduled for deployment, iSoft announced in a news release "that delivery of iSoft application solutions to NHS trusts will occur, in general, later than previously expected by the company."
This meant that under the collect-on-implementation contract NHS had signed with its LSPs, neither Accenture nor iSoft would be generating revenue. In a Catch-22, this also left iSoft short of the cash it needed to finish developmental work on Lorenzo. For the year ended April 30, 2006, it reported a loss of more than $600 million. Acting chief executive John Weston, who would resign in June, said that the previous year had been a "turbulent" one and that a stream of negative publicity had damaged the firm's reputation and customers' willingness to sign contracts with it.
At the time these slippages began occurring, iSoft was offering a number of existing health-care applications, most of them obtained through earlier acquisitions of other software vendors including Torex and Northgate Information Systems. In 2001, it had also signed an agreement with Eclipsys, a Boca Raton, Fla.-based health-care solutions provider, for the code to the company's Sunrise Clinical Manager, an enterprise medical records solution that Eclipsys claims provides secure, immediate access to patients' complete records. As part of the same deal, iSoft is partnering with Eclipsys to develop health-care software applications for the international market.
With the ongoing delay of Lorenzo, specifically layers two and three, both Accenture and CSC found themselves in a major quandary. Should they continue to wait for Lorenzo or lock into the older, existing applications?
"Either way, it's a tough call," Brennan says. "You're rolling out a system that's going to change clinical behavior." Since no one really knew when, or even if, Lorenzo was going to be delivered, there was a big risk in waiting 18 months to two years in hopes that the solution would be ready. On the other hand, Brennan says, if CSC or Accenture committed fully to the interim systems, they would have to roll out a second system, Lorenzo, when it eventually came out. "Clinicians are adverse to change," Brennan says. "Getting them to switch to another new system after 18 months or so would be a huge challenge."
A CSC spokeswoman in the U.K. declined to comment on this on the grounds that CSC would only deal with British publications regarding its work on NPfIT. Accenture, as noted earlier, failed to respond to numerous calls and e-mails.
Accenture opted to wait and roll out Lorenzo. In contrast, "CSC took a different approach," says Joe Vafi, an analyst who covers government I.T. for Jefferies & Co., an investment banking firm.
CSC chose to implement iSoft's existing line of products. "We use iSoft iPM for our Patient Administration System, iCM from iSoft for clinical functionality and management, the Ormis theater system, and Evolution for maternity systems," a CSC spokeswoman explained. The last two are also iSoft products.
Adds iSoft's White, "CSC went ahead and used existing iSoft solutions, then used a Lorenzo communications interface [level one] to transmit the data from those solutions to the National Spine."
While waiting for Lorenzo, Accenture, according to White, focused on working with general practitionersin contrast to CSC, which was focusing almost entirely on hospitals. The problem here from Accenture's point of view, White says, was that general practitioner (GP) implementation was extremely difficult because there are so many general practitioners and the NHS had given them an option called GP Systems of Choice. This meant the doctors didn't have to follow Accenture's lead in selecting a system but could choose on their own. This, in turn, made the transfer of data from old systems to the Spine-compliant systems being provided by Accenture more complicated.
Accenture's decision to wait for Lorenzo rather than use existing iSoft software had far-reaching financial implications. In March, Accenture announced that it was setting aside nearly a half-billion dollars to cover expected losses because it couldn't collect its consulting fees from the NHS until its work was complete. The company's CEO, Bill Green, said at the time that he hoped to renegotiate the NHS contracts. Instead of showing any of the flexibility that Gartner's Edwards suggests is critical in dealing with vendors, however, Granger, who is described by Brennan and others as "robust" and "resolute," dug his heels in.
At the March 2006 World Health Conference in Paris, he claimed that Accenture shouldn't blame anyone else for its troubles and joked oddly that Accenture's announced losses would be enough for the company to hire "every Bulgarian hit man to take me out." If Accenture thought it was going to get a new deal, it was sadly mistaken. "We came up with a new model where the people doing the work took the completion risk," Granger said. And if Accenture tried to bail out, it would have to pay at least 50% of the value of the contract for disrupting the project, Granger threatened.
As for Accenture's problems implementing Lorenzo, the CfH issued a statement calling for certain Accenture managers to be kicked off the program. "We believe that the issues are within Accenture's control and have requested key personnel changes within the Accenture organization," it said in a statement issued in April. The message was clear: CSC had managed iSoft effectively as a core supplier without Lorenzo. Accenture should have done the same.
Indeed, in retrospect Accenture's gamble on Lorenzo seems increasingly ill-advised. In August, a report produced jointly by CSC and Accenture stated that "there was no believable plan for delivery no well-defined scope and therefore no believable plan for lease." White says it will finally be ready in 2008.
On Sept. 28, Accenture announced it was walking away from the NHS. It agreed to repay more than $100 million to settle its legal obligations under the contractroughly $800 million less than the figure Granger had originally cited as a disruption fee. "It would have been in no one's interests to enter a dispute," the CfH said in an e-mail to Baseline.
The same day, CSC announced it was taking over Accenture's effort. A sled dog had fallen; another had gotten to eat its dinner.
Meanwhile, there were concerns with GE Healthcare's IDX as well. According to the NAO report, both Fujitsu and BT had agreed to develop a Common Solution Program that provided unified governance arrangements. This would ensure that the application was developed just once for the NHS in both the Southern cluster, Fujitsu's region, and in London, which had BT for an LSP. By mid-2004, the CfH became concerned about the effectiveness of IDX, according to the NAO report. By April 2005, with little progress seen, Fujitsu, according to the NAO, lost confidence in IDX's ability to deliver the Common Solution project. Fujitsu subsequently replaced IDX with Cerner, the Kansas City, Mo.-based health-care I.T. company. The replacement of IDX, NAO says, put Fujitsu 18 months behind schedule.
IDX (GE Healthcare) failed to return phone calls requesting comment. A Fujitsu spokesman said the company was unable to respond to inquiries because the CfH wishes to handle all media calls themselves.
In August, BT also dropped IDX for Cerner, though a Cerner spokeswoman says a contract between BT and Cerner has not been signed yet. Both parties have signed a letter of intent, she explained. BT has not responded to e-mailed inquiries.
According to an August Gartner report, in the 2 1/2 years BT struggled to deploy acute-care systems in London, it has only achieved one implementation of the GE Healthcare/IDX Carecast application.
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