INTRODUCTION
AND
SUMMARY
OF
CONCLUSIONS
AND
RECOMMENDATIONS
1. Since the 1980s, NHS Hospitals have used clinical
coding systems to provide central returns of their activity to
the NHS Executive. This has led to the need for an agreed thesaurus
of clinical terms.
2. The Read Codes are a clinical coding system designed
to enable clinicians and other data users to:
- record the details of clinical care (for example,
diagnoses, histories, symptoms, investigations, therapeutic procedures
and drug administration) on a computerised record;
- share and exchange computerised clinical information;
and
- retrieve and analyse clinical information held
in clinical information systems;
The Codes were originally developed in the early
1980s by Dr James Read, a general practitioner who practised
in Loughborough, Leicestershire, for use on general practice computer
systems.
3. The NHS Executive purchased the copyright to the
Read Codes from Dr Read in March 1990, for a total price of £1.25 million;
and established the NHS Centre for Coding and Classification (the
Centre) in 1990 to develop the Codes for use across the NHS. They
appointed Dr Read as the first Director of the Centre, and
granted Computer Aided Medical Systems (CAMS) Limited— a
company owned by Dr Read—exclusive rights to distribute
to the NHS and provide support for the Read Codes developed by
the Centre.[1]
4. In 1992, the Executive began a programme of work
in collaboration with the clinical professions to expand the Read
Codes to cover the clinical terms used by health care professionals
in the hospital and community health sectors.[2]
The main objective of this work—to establish an agreed clinical
language covering the clinical terms used by health care professionals—was
largely achieved.[3] In
May 1995, the Centre began a programme of work to implement Read
Codes Version 3 in the NHS.[4]
5. On the basis of a report by the Comptroller and
Auditor General (HC 607 of Session 1997-98), the Committee examined
the purchase of the Read Codes, the arrangements which created
a conflict of interest for Dr Read, the failure to organise activities
in line with the proper conduct of public business and the state
of readiness of Read Codes Version 3.
6. Three main overall findings emerge from our review:
- The need to plan investment in information
technology on the basis of sound investment appraisals
It is axiomatic that sound project appraisal includes
a rigorous assessment of costs and benefits and a realistic assessment
of any risks. In their purchase and development of the Read Codes,
the NHS Executive failed to undertake such an appraisal and they
did not produce a business case for a project on which they have
now spent £32 million. It will cost much more to implement
the project in full. This failure reinforces our concerns on other
NHS information technology projects, such as the development of
hospital information systems.[5]
- The need to evaluate pilot projects before
implementation
Belatedly the NHS Executive have agreed to a full
independent appraisal of the Read Codes before implementation.
They showed a similar reluctance to evaluate the success of the
hospital information systems project. Yet, if the Executive are
to secure the confidence of clinicians and others in such projects,
and overcome any scepticism about new ideas and technology, independent
evaluations of this kind should be a core requirement of any major
development project.
- The need to put in place proper governance
arrangements for NHS bodies and avoid conflicts of interest.
We are concerned that the NHS Executive failed to
exercise effective oversight and control over the conduct of financial
and management matters at the NHS Centre for Coding and Classification.
They set in place arrangements which created a conflict of interest
for Dr Read; provided inadequate advice and guidance; and did
not have rigorous systems in place to alert them when things started
to go wrong.
7. The NHS Executive face a considerable challenge
in building confidence in the Read Codes, and in their overall
management of information technology developments across the NHS.
We look to the Executive to ensure that they make a positive start
on this by:
- publishing the outcome of the independent evaluation
of the Read Codes, and
- ensuring that the lessons drawn from this and
other NHS information technology projects we have examined are
taken on board in the new NHS Information Technology Strategy
and revised management arrangements.
8. Our more specific conclusions and recommendations,
which underpin the general views above are as follows:-
On the business case for, and the purchase of,
the Read Codes
(i) The NHS Executive withdrew their original
offer of £600,000 for the Read Codes and, shortly afterwards,
paid more than twice as much, £1.25 million. We note
that the intention of the revised deal was to ensure that the
costs of developing the Codes would be borne centrally and not
by users. But we are concerned that the Executive were unable
to provide documentary information to confirm the assessments
made at the time, nor a convincing analysis of whether the extra
cost of purchase represented value for money to the taxpayer (paragraph
22).
(ii) Total expenditure on Read Codes to
March 1998 was some £32 million and implementation of the
Codes may cost many times more than that. It is a serious failing
that the NHS Executive did not prepare a properly structured business
case, including a cost benefit analysis or investment appraisal,
to justify their decisions to purchase the Read Codes, to set
up the Centre for Coding and Classification and to give CAMS exclusive
rights to distribute the Codes (paragraph 23).
(iii) We have commented before on the failure
of the NHS Executive to adopt sound business planning for investment
in information technology, in our reports on the Hospital Information
Support Systems Initiative[6]
and the Wessex Regional Health Authority Regional Information
Systems Plan.[7] It is
a serious failure of management by the NHS Executive that again
it did not adopt sound project management arrangements. We look
to them to ensure that full appraisals underpin all future NHS
investment in information technology (paragraph 24).
(iv) We are surprised that the Executive
had no documentary evidence to show that they had received Treasury
approval for the purchase and development of Read Codes. This
lack of clarity reflects badly on the Executive but we note that
any uncertainty about the NHS Executive's delegated powers has
now been resolved (paragraph 25).
On the arrangements which created a conflict of
interest for Dr Read
(v) It is wholly unacceptable that the NHS
Executive put in place an arrangement that created such a conflict
of interest for Dr Read. Even though there is no evidence of actual
abuse, these arrangements placed Dr Read in an ambiguous position.
We consider that the NHS should not employ people to develop or
promote goods or services in which they have a financial interest.
We expect the forthcoming guidance from the Executive to make
that clear (paragraph 32).
(vi) We are disappointed that the Executive
did not begin taking remedial action to deal with the conflict
of interest until 1996, when the National Audit Office first raised
their concerns. We would have expected the Executive to have spotted
the potential for conflict at the outset, and certainly that the
Executive would have alerted the Accounting Officer to the issue
when consultants questioned the arrangements in 1996 (paragraph
33).
On the weak oversight of the NHS Centre for Coding
and Classification
(vii) The catalogue of failings in the management
of the NHS Centre for Coding and Classification, as set out in
the C&AG's report, is serious. It includes:
- serious weaknesses in personnel management arrangements;
- failure to invite competitive tenders for external
consultancy services;
- shortcomings in financial controls; and
- arbitrariness in setting pay levels.
It is unsatisfactory that the NHS Executive only
became aware of the serious nature of the problems at the Centre
when the National Audit Office wrote to them. The Executive's
lack of knowledge of these weaknesses demonstrates graphically
the in-effectiveness of the arrangements for overseeing the Centre
(paragraph 41).
(viii) Given the scale and importance of
the Read Codes project, we are astonished that the NHS Executive
did not put in place strong support and oversight arrangements
from the outset. In neglecting these essentials they put substantial
sums of public money at risk. We expect the NHS Executive to ensure
that arrangements are in place throughout the NHS to prevent and
identify quickly management failings of the type identified in
the C&AG's report (paragraph 42).
On the state of readiness of Read Codes Version
3 for widespread use in the NHS
(ix) Eight years after the Read Codes were
purchased and three years after the clinical terms projects ended,
Version 3 of the Read Codes is being tested and used in only
12 NHS hospital sites. If the benefits of Read Codes are as good
as the Executive suggest, progress has been very disappointing;
and if Read Codes are to be implemented nationally, it is likely
to be at least a further five years before the Codes are implemented
throughout the Service (paragraph 57).
(x) We are concerned about the conflicting
views of key groups in the NHS, such as the NHS Executive, the
Royal College of Nursing and the Medical Information Group, over
whether Read Codes should be used. We welcome therefore the NHS
Executive's commitment to an independent evaluation of the Read
Codes, as recommended in the C&AG's report (paragraph 58).
(xi) The review needs to derive its authority
from its scope, the rigour of its methodology and the expertise
and transparent lack of conflict of interest of those conducting
it. We expect the review to:
- take full account of assessment, testing work
and professional opinion to date;
- assess benefits, costs and value for money;
- produce a realistic assessment of the likely
timescales for development, implementation and usefulness of the
systems, taking into account the linkages with investment in NHS
information systems and the new NHS Information Technology Strategy;
- assess the risks and develop strategies for managing
them.
It is important that the NHS Executive should not
feel locked into using the Read Codes because they have already
spent so much money on them. The review should be prepared to
look hard at alternatives (paragraph 59).
(xii) Clear lessons have emerged from the
development of the Read Codes, about setting out business cases
about project and programme management and about implementation
of systems across the NHS. We look to the Executive to apply these
lessons to other areas of their Information Management and Technology
Strategy (paragraph 60).
1 
