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CSC salvages some UK NHS work.

Department of Health

London: IT consultancy CSC could have salvaged up to $1 billion of its compromised electronic health records work with the UK's Department of Health.

Last month, CSC told investors that it would have to write down up to $1.5 billion — its entire profit on the deal — after the NHS forced it to renegotiate the contract. But it now looks as if NHS Trusts will be able to continue to buy the long-delayed CSC system — Lorenzo — if they choose to.

CSC announced yesterday that it has "signed a non-binding Letter of Intent with the UK Department of Health (NHS) that defines a way forward for CSC to deliver healthcare solutions and services, primarily across the North, the Midlands and East of England, in support of the NHS' reform agenda."

At the same time CSC filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission.

In a statement, CSC said, "The Letter of Intent reflects a new approach, moving toward a construct of more localized initiatives, reflecting the shift to more devolved decision-making and budgetary control within the NHS. Systems will continue to meet agreed rigorous national standards and will improve connectivity and interoperability of health providers in order to enhance overall patient care in England.

"The principles contained in the Letter of Intent are intended to establish a framework for a broad agreement to be entered into by the parties by 31 March 2012. As a part of this agreement, it is intended that CSC will contract to deliver additional Lorenzo implementations, adding to the 10 deployed successfully to date, with options for more where demand materializes. CSC is confident that Lorenzo's modern technology base and the fact that it has been specifically designed in collaboration with the NHS, should result in further demand in the future.

"Beyond Lorenzo, CSC provides a wide range of other solutions and services to the NHS, including General Practitioner, ambulance, and community systems, and digital imaging, and these services will continue.

"CSC believes that the principles contained in the Letter of Intent represent the appropriate way to support the NHS' reform agenda, providing value for money to taxpayers and, through technology, significantly improving standards of patient care in England."

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