Editor's blog Thursday 17 March 2011: Change at the top of Dr Foster Intelligence - DFI and shareholder DH comment
I went to look at the elegantly-redesigned Dr Foster Intelligence website, and happened across the news that DFI last week parted company with its chief executive Tom Moloney. I missed spotting Dave West's report of this last week in Health Service Journal.
Moloney was previously chief executive of EMAP, publishers of HSJ, until bad results forced him out in 2007.
The new head honcho at Dr Foster Intelligence will continue to limber the business - a joint venture between the private company Dr Foster and the public sector - up for sale. He is Tim Baker, who has been involved in business development at the separate Dr Foster Research, which is part of the private Dr Foster business.
As we exclusively revealed last year, the NHS Information Centre's stake in the DFI joint venture was transferred to the DH (in what was in no way, shape or form a sale) on 9 July 2010. For the original £8 million investment, symmetrically enough.
We also exclusively revealed last year that until 31 December 2013, Dr Foster have a 'put option' - meaning that the DH can be forced to buy out Dr Foster's stake in the DFI joint venture at current market value.
The clock is not ticking unduly loudly on the put option: 21 months remain. And the DFI news release states that Moloney has turned DFI from a growing company into a growing and profitable company.
It's interesting timing.
Because however uncertain the future of the NHS looks, the future of data companies looks good. Dr Foster Intelligence is the current market leader in the acute sector, and the future is about data, data and more data.
The process of developing new agreed standardised hospital mortality ratio metrics led by DH culmintaed in last November's publication by the National Quality Board, which was accompanied by this consensus statement.
Companies and chief executives part ways for all sorts of reasons.
Nor is the intention of this to attack Dr Foster Intelligence. If we, the public, had our taxpaying arse felt by the deal to create the joint venture (as both the NAO report and the PAC report conclude), that is the fault of the negotiators and signatories of the deal who should have been looking after public money more vigilantly.
Since the publication of our exclusives on DFI last year, various sources from both parties have suggested that former DH permanent secretary Sir Hugh Taylor was most keen that the DFI deal should go ahead, although none of these sources are willing to state this on the record. (Last month, Sir Hugh took up the chairmanship of Guys and St Thomas's NHS Trust.)
There are companies who would not bother even having an ethics committee (chaired by Professor Alan Maynard of this parish) as DFI do, let alone publicising its bite.
As a publicly-funded market leader, DFI know well that scrutiny comes with the territory.
No - this is interesting because companies such as Dr Foster Intelligence act in the interest of their share price. We don't know what DFI's share price is, unfortunately, because until their shares are traded, only their accountants (PWC, at the last time of annual reporting) are allowed to decide that.
Whatever the issue that precipitated Tom Moloney's exit, it should have been known to the board of Dr Foster Intelligence. We know how important competent boards are, do we not?
The DFI board now has representation on it from the DH, following the transfer of the IC"s shareholding. The DH's representatives are commercial director Peter Coates and deputy director of commercial operations Carl Vincent.
There is clear public interest in how the public money involved in the JV of DFI is being looked after as the company is readied for sale, and the loss of a chief executive is materially important.
I asked the DH for a comment about their understanding of the reason why Tom Moloney left Dr Foster Intelligence, and it is as follows: "The Department of Health continues to give its full support to Dr Foster Intelligence (DFI) and to Tim Baker, and thanks Tom Moloney for his contribution to leading DFI to its strong position" .
A spokesman for Dr Foster Intelligence, meanwhile, said, "Tom Moloney left because it was agreed by the board that he had achieved his twin aims of delivering the company into profitability and preparing the business for sale".