NHS Software Supplier Reshuffles CEO

A major software company involved in the British government’s overhaul of its health-care IT system has seen its chief executive officer resign less than a week after an accounting restatement caused it to slash profit projections.

In a statement Wednesday, departing iSoft Group Chief Executive Officer Tim Whiston said he was “concerned that my continued role with the company may represent a source of negative speculation and comment, being an unhelpful distraction to those within it.”

Whiston will be replaced by John Weston, iSoft’s chairman, until a permanent replacement is found, the company said.

ISoft, based in Manchester, England, makes software applications for the heath-care industry. The company is a subcontractor for Accenture and Computer Sciences for work on the 10-year IT modernization program of the U.K. National Health Service (NHS).

The NHS’s National Program for IT calls for digitizing patient records, an electronic booking and prescription system for 50 million people in its network. ISoft is working in three of the five regions where the modernization program is under way.

The company is testing and deploying in stages an applications suite called Lorenzo, said John White, iSoft’s corporate communications director. Lorenzo electronically manages a variety of patient data, from blood tests to radiology records, which would then be available through the nationwide patient records network, White said.

ISoft, whose contracts are valued at 300 million pounds (US$552 million), has been under scrutiny for its role in the program, viewed as one of the largest IT projects in the world. In January, iSoft announced a delay in delivering its products.

“Discussions to facilitate a rescheduling of the contractual delivery schedule are ongoing,” an iSoft statement said.

White said the scale of the project has been a challenge. “It’s all part of trying to bring practice and process throughout the National Health Service onto a more standardized basis. In some areas it will take time,” he said.

In March, Accenture said it expected future losses of $450 million due to its NHS contracts. Accenture partly blamed significant delays by one “major subcontractor” in the second quarter in delivering what it termed critical software.

Richard Granger, director general of the IT program, has warned in the past that suppliers could be cut if they did not meet deadlines. Further, the NHS says suppliers are not paid until they deliver, a measure it said protects the “public purse.”

Last week, iSoft announced changes to how it recognizes revenue in its accounting policy. The new accounting method would cut iSoft’s predicted pre-tax profits for the year ending April 30 of between 3 million pounds to 7 million pounds, down from between 17 million pounds to 22 million pounds.

Its projected revenue was revised for the same period from 210 million pounds to 215 million pounds, down to 195 million pounds to 200 million pounds. The results will be announced July 11.

White said contrary to negative reports, the company is still profitable, and has about 15 million pounds in cash on its balance sheet.

-Jeremy Kirk, IDG News Service (London Bureau)

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