British Electronic Health Record Collapse Sparks Lawsuit
Investors sue U.S. contractor CSC, claiming it concealed its inability to complete failed $18 billion U.K. National EHR Program.
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Two weeks after the official decision to kill the British government's plan to build a national health IT network for all 52 million residents of England, the repercussions are mounting.
On Monday, a group of shareholders filed a class-action suit in the United States against Falls Church, Va.-based contractor Computer Sciences Corp. (CSC), claiming that CSC "fraudulently concealed that it was incapable of delivering" on a 10-year, 3.1 billion British pound ($5.4 billion) contract with the United Kingdom's National Health Service (NHS).
The lawsuit accused CSC and several top executives of issuing a series of misleading statements related to the company's ability to build Lorenzo, a software platform that was to be the foundation for a major part of the NHS's electronic health records (EHR) system. "In early 2008, CSC's board of directors dispatched an internal team of experts to the U.K. to review progress on the NHS contract," the suit stated.
"The team concluded that 'from a technology and operational perspective,' CSC could not perform the NHS contract. The members of the team were in agreement that CSC simply could not deliver the software necessary to perform under the contract. As such, the contract was a 'loser.'"
[Legally, EHRs are double-edged swords: They protect clinicians from malpractice litigation but also put them at greater risk. See Will Your EHR Land You In Court?]
Plaintiffs, led by the Toronto-based Ontario Teachers' Pension Plan, a major CSC shareholder, also said CSC made "fraudulent" statements about the company's 2010 financial results.
CSC spokesman Chris Grandis said that it is against company policy to comment on pending litigation. A call to the Ontario Teachers' Pension Plan was not immediately returned.
The suit coincided with a disclosure by CSC that it had paid back 170 million pounds ($265 million) of an advance from the NHS because the company was not able to reach an agreement with the British health authority on a local service contract by September 30. Prime minister David Cameron's government is moving ahead with plans to create smaller, regional networks of EHRs.
Cameron's Conservative government announced September 22 that it would accelerate the "dismantling" of the National Programme for IT (NPfIT) after nine years and 11.4 billion pounds ($17.8 billion). "The NPfIT achieved much in terms of infrastructure and this will be maintained, along with national applications, such as the Summary Care Record and Electronic Prescriptions Service, which are crucial to improving patient safety and efficiency. But we need to move on from a top-down approach and instead provide information systems driven by local decision-making. This is the only way to make sure we get value for money and that the modern NHS meets the needs of patients," the U.K.'s Department of Health said.
The NPfIT, which was supposed to have been the largest civilian IT project in the world, has been plagued by delays, cost overruns, and contract changes. As InformationWeek Healthcarepreviously reported, a multi-party parliamentary committee declared the effort wasteful and "beyond the capacity of the Department of Health to deliver" in a scathing review earlier this year. Separately, the Cameron government has declared the NPfIT a relic of previous Labour governments.
Whether this really is the end of the National Programme for IT or just a metamorphosis remains to be seen. British health IT publication E-Health Insider recently compared the saga to a zombie movie, since the NPfIT has refused to die so many times before.