U.K. green-lights PACS buy for acute care hospitals

June 2, 2004

The U.K. is about to get a whole lot of PACS. The central government has agreed to foot the bill to install PACS at 153 hospital trust facilities for acute care over the next three years. All will be paid for by the U.K. government from a national

The U.K. is about to get a whole lot of PACS. The central government has agreed to foot the bill to install PACS at 153 hospital trust facilities for acute care over the next three years. All will be paid for by the U.K. government from a national investment package. But there's a catch. Hospitals will have to choose the vendors of this equipment from a list of government-approved suppliers, and the only way to get on that list is to provide the equipment at a heavily discounted rate. Those discounts will be needed, if the job is to get done for the money allocated. Just $100 million has been set aside so far.

It's not exactly what PACS vendors wanted, especially those that didn't make the list of approved suppliers. And there are some surprises there, as well. Among those not on the list are European heavyweights Agfa and Siemens. The good news, of course, is that the initiative to install PACS in the U.K. is going forward at all.

The recent decision to allocate funds followed months of uncertainty and confusion. Despite an obvious need for networking, just 25 of the country's 178 acute hospital trusts had installed a PACS. With the decision now made to proceed with the healthcare initiative of the National Programme for IT (NPfIT), government officials would like to see 80% of the PACS installed by the end of 2005. The remaining 20% would be running by the end of 2006, according to U.K. expectations.

But these installations will have to be done on a shoestring budget. Only about British Sterling 60 million ($100 million) of central funds will be available for PACS investment this year. Details of additional funding through 2005 and 2006 have not yet been released.

The choice of vendor will be limited by localities, called regional clusters, each of which has been assigned vendors or local service providers (LSP). GE Healthcare is the big winner, gaining monopoly coverage in three separate regions: the southern, east and east Midlands, and northeast clusters. Philips Medical Systems is in line to take the London cluster, pending a final contract. Kodak and ComMedica have the northwest and west Midlands clusters sewn up.

"The selected suppliers fully comply with our requirements and provide a fit-for-purpose solution designed by clinicians and supported by the Royal Colleges," said an NPfIT spokesperson. "They are recognized major vendors with a global presence."

They also went in on the cheap, agreeing to drastic discounts. Government officials negotiated price reductions of up to 57% on diagnostic workstations, 65% on CR image acquisition equipment, 71% on disk storage, and 82% on PACS servers.

Not agreeing to provide such discounts eliminated companies from competition. Notably absent from the published list of contracted vendors are Agfa, Ferrania, and Siemens Medical Solutions. They can still be chosen, but any hospitals doing so will have to pick up most or all of the tab themselves.

"The PACS solutions on offer via the LSPs are not only fit-for-purpose but also demonstrate best value," said an NPfIT spokesperson. "We are confident that individual trust boards will see the value of ordering PACS through LSPs."

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