Danish Healthcare Mega Investment Requires a Pragmatic Approach to Selecting New Software
When the Capital Region of Copenhagen and The Region of Zealand make the decision for a vendor for their DKK 1 billion (€135M) investment in a new IT healthcare platform, they will not be looking to become early adopters.
The purpose of the tender is to ensure that the chosen IT-Healthcare Platform will meet the defined requirements for IT support of clinical and administrative work within the health care system of Zealand supporting 12,000 concurrent clinical users in 17 hospitals and 54 other healthcare institutions.
The IT-Healthcare Platform is expected to start a pilot operation in 2014 in the Capital Region and is expected to be commissioned in early 2015 throughout the Region Zealand and rolled out towards the end of 2016 in the rest of the Capital Region.
The new and modern solution is required to generate qualitative and quantitative improvements in both the Capital Region and the Zealand Region within three overall areas:
- Treatment continuity and patient safety
- Efficiency improvements of clinical processes and workflows
- Patient and staff satisfaction
The goal is to:
- Support paperless workflows with an efficient tool which includes but is not restricted to; structured clinical documentation, process support and quality support
- Assemble information about the individual patient in one common system, enabling easy access to patient health data for all relevant health care actors across sectors. This will result in improved patient care and treatment continuity
- Reuse information about patients and their care for continuous optimization of treatment quality and use of health care resources
- Ensure easy access to all information on the new IT-Healthcare Platform in relation to the continuous need for generating a wide range of data outputs
- Improve support of complex and lengthy patient care periods including treatment flows for patients with chronic illnesses
Both Regions require an effective IT system for the healthcare sector which can elevate both Regions to a minimum of “Stage 6” on the HIMSS scale with the possibility of reaching Stage 7. This common system is required to support qualitative improvements within the above mentioned areas.
In September of this past year, the Capital Region of Copenhagen and The Region of Zealand invited vendors to submit their request for pre-qualification. The deadline was October 22, 2012.
Eight vendors submitted requests for pre-qualification and on November 22, 2012, five vendors were “long-listed”:
- American IBM with Danish Systematic as subcontractor
- American EPIC with Danish NNIT as subcontractor
- Swedish Cambio with Danish Netcompany as subcontractor
- German Siemens with American KMD and French Atos as subcontractors
- American Cerner with Canadian Logica as subcontractor
CSC Scandihealth, which is currently one of the largest suppliers of IT software and related services to the Danish healthcare sector, was not qualified apparently due to lack of adequate references. Compugroup was not qualified due to lack of references, while Chipsoft was not qualified due to legal issues in the material submitted for pre-qualification.
Next step is a dialogue phase, which begins in January 2013. The Capital Region of Copenhagen and The Region of Zealand will enter into a dialogue with the suppliers on the long-list to ensure that they can hit the mark in the requirements specification. During the dialogue phase, three suppliers will be selected to the actual tender phase.
Three vendors have installations in Denmark
CSC Scandihealth, Systematic and Cambio have IT Healthcare platforms running in Denmark. CSC Scandihealth have their CSC Clinical Suite running at Region Nordjylland, Systematics’s Columna system is running at Region Midt and Cambio’s COSMIC is running at Region Syddanmark. The Danish armed forces are also using Cambio’s COSMIC. The current technology used by the Capital Region of Copenhagen and The Region of Zealand is delivered by CSC Scandihealth. KMD who hasn’t been in this market for more 12 years is now back as a subcontractor to Siemens. Logica was previously subcontractor for Cambio in Region Sydjylland.
Running References will be the Key Decision Factor
Denmark is a small country with 5 million inhabitants. The Danish healthcare system is nationalized and was operated by 14 “Amter” until December 31, 2006. As of January 1, 2007 an administrative reform merged the 14 “Amter” into 5 Regions.
The Danish market for Patient Administration Systems was initially serviced by one vendor (Kommunedata now KMD). The “red” system was introduced in the 1970’s and was replaced by the “green” system in the 1980’s. Ironically, this activity was acquired by CSC from KMD in 2000 (60%) and became CSC Scandihealth.
The Danish “Amter” and later the Regions have thus been through several generations and iterations of IT healthcare systems. They have learned that taking the role as “Early Adopters” can be risky and expensive. They have also learned that a one-vendor policy (KMD and the red/green systems) leads to a de facto monopoly with all the associated disadvantages (increasing prices, deteriorating quality of service and inflexibility).
We assess that the decision for a vendor for the new IT Healthcare platform to the Capital Region of Copenhagen and The Region of Zealand will be based on three main sets of criteria:
- Fit for purpose (demonstrated through existing customer installations)
- Ability to deliver (demonstrated through existing customer projects)
- Price/performance (demonstrated through existing customer projects)
Thus the current market leader CSC Scandihealth didn’t make it through the pre-qualification filter due to lack of adequate references:
“We have looked at large, similar systems running in life production elsewhere. So even if CSC was suitable judged on functionality and organizational ability for the purpose of implementing, the company’s references are few and much less representative when compared to the prequalified suppliers references.” Says Claus Balslev, program manager at the Capital Region of Copenhagen to Computerworld.
The position taken by the Capital Region of Copenhagen and The Region of Zealand reflects the pragmatic behavior of the early majority/late majority in the “Law of Diffusion of Innovations” terminology. New and disruptive technology will never have a large installed base. Mature technology will. For an organization spending DKK 1 billion of the tax payers money this is a very pragmatic approach.
This article is primarily based on publicly available information and the interpretation and evaluation of TBK Consult. Corrections of factual information as well as challenges to our assessments are welcomed. All the statements and assessments expressed in this article are proprietary of TBK Consult. TBK Consult is not affiliated with RH/RS and RH/RS has not been asked to comment on this article nor have they done so.
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