The Health Information Market Report Summary November 2007

1. The Health Information Market Report Summary November 2007 Kable Research & Advisory

2. Executive summary Information services play a central role in developing NHS performance, raising the quality of care, and achieving efficiency improvements. This report was commissioned by the Information Centre for Health and Social Care to determine the size of the market for information services in the NHS. The overall information market includes services provided by NHS organisations themselves, by commercial suppliers offering added value information services, and by consultants and academic bodies which depend on information services in their work with the NHS. Based on telephone interviews with over 100 NHS organisations, and on supporting secondary research, we estimate the value of the total NHS information market across the UK at £290m. Within NHS England, we estimate that total spend on information services is £204m, of which £46m is external, and £158m is internal spend. Total spend on information services equates to 0.2% of NHS expenditure. Total external spend equates to 0.05% of NHS expenditure. It is interesting to note that as a proportion of total spend, 0.05% is close to the average spend on market research across all UK industries. Perceptions of data quality are generally good, although there are some concerns over the consistency of data from different sources. Expectations regarding the timeliness and the usability of information vary widely, with equal proportions of those surveyed seeing each as one of the main strengths and one of the main weaknesses of the current system. Most of our respondents see the solutions to these issues lying in stronger national leadership in terms of standards, tools and information services. There are a number of areas where information needs do not appear to be met, or where the level of service falls below that expected by users. Mental health information was the area raised most often. The community of information professionals in the NHS provides a strong platform for further development. It is clear from the responses to our survey that respondents are proud of the contribution that they are making to the development of the NHS, and of their achievements to date. They do, however, feel a lack of recognition and understanding of pressures they face, and would welcome a more pro-active approach from the Information Centre. We believe that the Information Centre should consider how to strengthen relationships across this community, with a view to raising the profile of information services in general, and improving it’s own profile in particular.

3. Introduction • Background Information provided by the centre is used across health, social care, government and education bodies, to improve the quality and efficiency of care; to assist regulatory activity; and to support research, education and training. The information centre is only one of the providers of information: the information market in its entirety includes a number of different information providers. Examples include: • Demographic data from the Office of National Statistics; • Commercial information from suppliers such as Experian A variety of information services are provided to the NHS which add value to these different sources of information. These information services are provided by: • Academic institutions; • Other NHS and other public sector bodies; • Commercial organisations such as Dr Foster Intelligence and CHKS. In addition, consultancy services used by NHS bodies make use of information from various sources in formulating their recommendations. Finally, the NHS makes use of a range of tools and training services to complement their use of health information.

4. Scope The market definition that we have used is: “The Business Intelligence and Information Services market comprises public and private enterprise engaged in the supply of; data, information, research, knowledge, information based consultancy or information tools and associated applications” More than half of the respondents to our survey were comfortable with this definition, but many felt that it could be improved. For clarity, we have included the costs of collation, distribution and analysis of social care information within the health community, but equivalent costs carried by local authorities with social care responsibility fall outside the scope of these estimates. Survey Respondents The primary research on which this analysis is based involved telephone interviews with 104 respondents from NHS organisations across the UK. The primary focus of interest is NHS England, which accounts for 94% of responses, but we also sampled a small number of organisations in other UK regions for comparative purposes.

5. Methodology • Primary research was carried out by telephone interview with the individuals with primary responsibility for NHS information in each body. This included survey both users of information and suppliers. More detail on the survey methodology is included in the appendices of the full report. • Secondary sources that we have drawn on include a number of publicly available sources: • Government and NHS publications, annual reports; • Contract activity based on OJEU awards and invitations to tender; • Industry data based on supplier reports, press releases, and websites; and • Kable internal resources including a database of public sector contracts, supplier profiles and annual surveys of senior ICT managers.

6. The market for information Market structure Market size In total we estimate that the UK market for NHS information is worth £248m, with 80% of the total, £204m, spent in England. In addition we estimate that the UK market for supporting tools and training is worth £42m, bringing the total UK market to value of £290m. On average, the organisations that we surveyed reported that they spent £404,771 per annum on information services. Hospital trusts carry the largest information budgets, averaging £438,732 per annum, and of the identifiable bodies, strategic health authorities are the lowest spenders at £125,000 p.a. Typically, 29% of this expenditure is external, and 71% is internal, although as one would expect, Strategic Health Authorities spend almost their entire budget externally.

7. *It should be noted that our sample size for Strategic Health authorities, Care Trusts and Ambulance Trusts is relatively small, and the diversity of national bodies is too great for us to rely on the responses from these types of body in isolation. In estimating overall market size we have adjusted for the relative sizes of different national bodies. For the smaller trusts, although we are working from a small sample the figures do appear consistent, and within a national context any variations will represent a small proportion of total spend. We have therefore used the information provided by respondents in calculating the element of total national spend represented by care trusts and ambulance trusts. However in the context of individual bodies, the above figures for care trusts and ambulance trusts should be treated with caution. A proportion of the expenditure in some national bodies is awarded as grants to other bodies. Rather than compare expenditure on information with total expenditure, we have eliminated grants from total expenditure, and based our comparisons on the remaining administration cost. Across the national bodies surveyed, expenditure on information as a percentage of administration cost ranged from 0.8% to 1.8% in the national bodies that we surveyed, with an average of 1.6% of administration expenditure. The mix of spend on external and internal sources of spend equated to 31% external, and 69% internal. Based on their annual accounts, we estimate that annual administration expenditure for all of the relevant national bodies equates to £1.1bn, and the associated spend on information services is therefore estimated to be £18.7m, of which £5.7m is external spend. This calculation includes information services for regulatory and public welfare bodies, and for central services involved in delivery of care. It excludes the Information Centre itself, which we have shown separately.

8. At national level, this represents a total spend for England of £203.7m. Extrapolated across Scotland, Wales and Northern Ireland, this would equate to a UK total of £247m. Our estimate of external spend on information within this total spend, equates to £45.7m for England, and £55.6m for the UK. In addition, we estimate that there is complementary expenditure of £41.6m on tools and training to support the use of information. Hospital trusts are the bodies that spend most on information, and represent 44% of the external spend in England, with primary care trusts accounting for 36%. We estimate that national bodies account for 13% of external spend. These estimates place the total value of the UK market at £289.6m, with spend external to NHS organisations on information, tools and training, representing £97m or 34% of the total. Across the whole of the English NHS, total spend on information (including information sources, surveys, tools, and internal expenditure) represents 0.2% of the NHS budget (£203.7m / £87.5bn), or £1 in every £429 that is spent by NHS England. The external elements of this expenditure represent 0.05% of total NHS spend (£45.7m / £87.5bn).

9. In February 2007, the NAO report into the Dr Foster Intelligence joint venture between the Information Centre and Dr Foster LLP, quoted KPMG’s due diligence report valuing the health informatics market at up to £325 million. This was based on the anticipated spends of a sample of NHS organisations and an Office of National Statistics estimate that the whole public sector informatics market is worth around half a billion pounds. However, we are concerned here, not with the total health informatics market, but only with information services for the health market. Based on turnover of the two biggest specialist companies, (Dr Foster Ltd and CHKS), which were £6.8 million and £5.1 million in 2004, NAO put a “prudent” estimate of the annual spend on the health informatics market at no more than £20 million per annum. Our estimates of £46m external spend for England and £56m for the UK are therefore somewhat higher than those made by the NAO in 2004. However, a large part of the difference can be explained by market growth. Compound annual revenue growth of the two major providers in this market has been in excess of 26% over the two years of reported results since 2004. Extrapolating the same growth rate forwards would put their total revenues in 2007 at £24m, compared to £11.9m in 2004. In addition, NHS bodies are buying information services from suppliers such as Experian, and primary research from suppliers such as ICM Research, Ipsos MORI, Media Measurement Ltd, Millward Brown, and Opinion Leader Research. We therefore view revenues in the region of £24m among the leading specialists in health information as being consistent with a total market worth in excess of £55m, and proportionally our estimates result in a similar share for the major providers as that estimated by the NAO for 2004.

10. Related market sizing includes: The Office of National Statistics has estimated the total spend on Market Research and Consultancy services in the Healthcare sector at £77m; Work to support the National Audit Office review of the use of consultants in the public sector estimated the total spend on operations and process re-engineering consultancy in the NHS at 18% of £469m in 2005, equivalent to £84m. It is, of course, difficult to say what proportion of this consulting activity is related to information services, but the figures look consistent with the estimate of overall market size.

11. Supply side At different places in the survey we asked respondents to identify suppliers that they work with, and that they would recommend to others. In addition to the questions that were explicitly concerned with suppliers, a number of respondents identified suppliers at other points in the discussion. The two health information specialists that were identified multiple times by name in the survey were Dr Foster, and CHKS. Although opinions differed, both were identified by a number of respondents as organisations that could be recommended to peers. The other information specialists that were mentioned in the survey were Experian and the National Consumer council. The consulting organisations that were identified by multiple respondents in the survey were PWC and Newchurch.

12. The information tools and services that were mentioned by more than one respondent were: Business Objects, Microsoft SQL (and associated products), Dynamic Change, PSCAL/SLAM, and Ardentia. Two of these are generic information management products from international suppliers, and the remainder are specific to the use of information in the health market. Of those respondents which were prepared to recommend a supplier to their peers, 37% of respondents chose a commercial information provider and 13% a specialist in information from within the public sector (NHS or academia). Providers of software tools were identified by 13% of respondents, and consultants by 12%. Other types of organisation, and other initiatives, such as trainers, surveys, and internal organisations made up the remaining 25%.

13. Market performance Overview • The features of the current system that were most commonly identified as among the best were: • User friendliness; • Data quality; • Timeliness; and • The internal information function • Interestingly, although the rankings were slightly different, three of these features were also among the four worst aspects of the current system: • Timeliness; • Data inconsistency; • User friendliness; and • Data quality. • The same themes w ere reflected in the key areas where respondents would like to see improvement: • Standardised or centralised data; • Better timeliness; • Training for users.

14. The use of information in the NHS Uses of information: Performance management Performance management is rated as the most common, the most important, and the best value for money of all the different types of information. With the exception of two responses, every respondent identified that they made use of information for performance management and this was ranked, not only as the most common, but also as the most important use of information. By comparison, use of information for Capacity planning was reported by 86% of respondents, and 50% of them placed capacity planning in the highest category of importance. While everyone made use of information for performance management, around one respondent in six made no use of information for capacity planning. When asked how they rated the importance of different types of information, 98% of respondents ranked performance management in the top two categories.

15. The importance of performance information is further underlined by the different sources of business information that were identified by respondents, with 27% identifying performance indicators as a source of strategic or tactical business information – significantly more than any other source of information identified. We asked respondents if they could identify one product or service that offered superior value for money, and obtained 71 responses. Taken together the various sources of data accounted for almost half of responses. In-house data ranked in second place, with 29% of responses. Other sources of data that were mentioned included staff surveys, and patient surveys. All of the major information providers were identified by multiple respondents as offering good value, and taken together information providers represented 9% of all responses, with CHKS obtaining the largest number of mentions ahead of NHS IC and Dr Foster. Uses of information: Planning for the future Almost as many respondents said that they used information for capacity planning as for performance management, at 86% of all respondents. However there is a strong sense in the qualitative responses that using information for capacity planning is less well developed at this stage than for performance management.

16. Future Development We asked respondents to specify the type of additional service they would like to have available, and 56 provided a response. Benchmarks were raised most often as the type of service that respondents would like to see, and in total represented more than a third of all responses to this question. The more general comments in this area could easily be interpreted as expressing a desire for a lower cost alternative to existing processes, but where specifics were provided, it seems that there are underlying requirements for more detail or coverage that is not available at present. A number related to improved understanding the cost base of peer organisations. The second most common request was for some form of executive summary information. Specific comments included: “I'd like a product that brings it all together on to one single forum” “We need an executive dashboard / balanced scorecard tool kit - so individual trusts have a standard approach to a set of metrics we have on a daily basis” “I want one figure, not reams of data” “We need a one-stop, high-level (view of) each NHS organisation”

17. Role of the Information Centre When asked what the Information Centre could to be more helpful, 86 respondents offered suggestions, with the two most common relating to raising awareness of Information Centre services, and providing a single source of information. Each of these was raised by 17% of respondents to this question. A further 14% suggested standardising data, and 13% suggested providing benchmarks. Overall, almost half of responses to this question implied that respondents were looking for more central direction, led by the Information Centre; partly to address the concerns over consistency that were discussed above, but also to help simplify processes, and rationalise information sources and tools. The comments on providing a single data source, standardising data, and providing benchmarks offer different insights into the rationale behind these suggestions. Underlying a few of the comments on the concept of a single data source was a feeling that only NHS organisations data should participate in sharing NHS information: “Open up information and data that is our own (NHS) to be more readily accessible directly by ourselves” However, the bulk of comments were concerned primarily with simplifying access to information

18. Conclusions • Our main conclusion is that the current state of the information market is that it is small in scale (less than 1tenth of 1% of NHS expenditure), with the majority of resource being directed to internal NHS services. The external market is characterised by a number of well established organisations such as Dr Foster and CHKS along with a larger number of small start-up companies supplying into niche markets. • There are some aspects of the current information services market which are consistently rated highly by respondents. All of the following were identified as positive aspects of the current system by more than 5% of respondents, without a significant level of dissent. It is clear that standards need to be maintained in these areas, but on the basis of this survey they should be regarded as assets on which to build, rather than priorities for further improvement: • The internal information function; • Performance management; • Web-based services • In three areas, the messages from the survey respondents were mixed: • In general, data quality is rated highly, but there are specific concerns around consistency of data, processes, and tools; • Some users rate the timeliness of data highly, others rate it as one of the most serious issues; • Some users rate ease of use as a strength of the existing system, others rate it as one of the most significant issues • There is a perception that acute services have been a priority, and there is now a need to improve coverage elsewhere: • Mental health; • Community services; • Social care.

19. Conclusions It is beyond our scope to resolve the conflicting demands to refine existing services between prioritise between extending current information services into new areas, and refining the services. Whether or not stronger national leadership on standards can resolve all of the issues that users expect, there are a number of other areas where the Information Centre may be able to provide additional support for local information services. Specific issues raised by respondents include knowledge sharing, and professional development. In addition, the lack of agreement among respondents on issues such as quality and timeliness suggest that there is some potential benefit in consensus building across the NHS information community. In this light, we believe that the Information Centre should consider how to strengthen relationships across the NHS information community, with a view to raising the profile of information services in general, and the profile of the Information Centre in particular. Ideally, such an outreach programme would be linked with knowledge sharing, consensus building, and professional development for information specialists; as well as education and awareness programmes across wider community of NHS information users.