Q223
Practical examples of difficulties caused by
the potential for conflict of interest in Dr Read's position.
1. The role of promoting Read Codes
As the Director of the NHSCCC it was Dr Read's
role to promote and champion Read Codes, to ensure they became
the standard clinical thesaurus of the NHS. Examples of difficulties
this caused are:
- as the inventor of the Read Codes it was often
the case that Dr Read did not promote the system as vigorously
as he might have, at the expense of other systems or individuals,
because of the personal embarrassment felt.
- because of the perceived conflict of interest,
Dr Read avoided taking part in CAMS' promotional meetings and
conferences, even though it would have been proper to do so, and
many of the senior IMG staff did so regularly.
- expenses of overseas visits to promote the
Read Codes were paid by CAMS, rather than the NHSCCC-unless there
was a mandatory IMG present-in case such visits were perceived
to profit Dr Read personally, rather than to profit the legitimate
UK interest in international take up of Read Codes. 26 2. The
commercial interests of CAMS
Within their NHS contract CAMS have to operate
under a "cost- plus" formula, with an agreed cap on
profits for services licensees receive under their license. However,
CAMS is free to offer other services, eg. training, consultancy
and software products, to the NHS in competition with other suppliers.
The products and services that were outside
the NHS cost-plus formula CAMS should have been developing on
a commercial basis. It is important to CAMS to develop this side
of the company's business for when the time came that the NHS
contract was terminated. This was the intention of the original
DOH negotiators.
Dr Read always felt personally sensitive in
this area as he could have been perceived to be profitting from
a position of having an advantage over other suppliers, even though
this was the legitimate result of the original contract.
This led Dr Read to disadvantage CAMS, until
notice was given on the NHS contract, against the advice of the
other directors. The following are practical examples:
- vetoing the development of commercially
viable software products.
- vetoing most advertising and promotion
of products and services outside the NHS contract.
- vetoing sales targets being set for staff.
3. The Promotion of CAMS
Because of the potential for conflict of interest
in Dr Read's position he avoided any opportunity to promote CAMS
in any environment. Practical examples of difficulties in this
area that any other director of the NHSCCC would not have had
are:
- not referring to CAMS and their part in the
distribution and championing of Read Codes on platforms nationally
and internationally.
- not permitting CAMS consultancy to NHSCCC in
any circumstances except when the work was extremely urgent, and
no other supplier was in a position to tender.
- not proposing CAMS be approached to tender
for project work within the IMG when it would have been right
to have done so.
- avoiding suggesting CAMS be approached for
solutions to problems put to Dr Read by NHS staff that CAMS would
have been the logical solution for.
Q186-190
Capital and Income Received by Dr Read Since Purchase
of Codes
| | |
| | |
|
| A. | CAPITAL | | | |
| | | |
| | |
| 1. | Tannery Buildings
| | | |
| | Current Value
| £395,000 | |
|
| | Loan Outstanding
| £330,000 | |
|
| | | net capital value
| | £65,000 |
| 2. | CAMS Shares Value
| | | £0
|
| | |
| | |
| TOTAL NET CAPITAL ASSETS FROM THE DEAL
| | £65,000 |
| |
| | |
| | |
| | | |
| | |
| B. | INCOME 1.4.90 to 31.3.98
| | | |
| | | |
| | |
| 1. | NHSCCC Gross Salary
| | | £613,016
|
| 2. | CAMS Gross Salary
| | | £322,370
|
| 3. | CAMS dividends
| | | £564,843
|
| 4. | CAMS car and employment benefits
| | | £66,211
|
| 5. | Tannery Buildings
| | | |
| | Rent Income
| £427,457 | |
|
| | less: Purchase Loan Repayments
| - £331,567 | |
|
| | Corporation Tax
| - £133,163 | |
|
| | Bank and professional charges -
| £11,524 | |
|
| | | net income received
| | - (£48,797) |
| 6. | Income for original sale
| | | |
| | Initial purchase price
| £1,250,000 | |
|
| | Development costs
| £1,540,000 | |
|
| | | net income received
| | -- (£290,000)
|
| 7. | Deduce what Dr Read would have earned as a GP
| | |
-- ( £600,000) |
| | |
| | |
| TOTAL NET INCOME FROM THE DEAL OVER 8 YEARS
| | |
| £627,643 |
| | |
| | |
Computer Aided Medical Systems Ltd
April 1998
