New Zealand’s health IT progress questioned by whistle-blowers

Concerned health sources say the New Zealand Ministry of Health’s National Systems Development Programme (NSDP) hasn’t delivered in its first two years and is in danger of becoming another INCIS.

NSDP is a four-year ministry initiative to deliver improved national payment systems, information and connectivity, that will result in a better functioning health and disability sector.

The project has a capital budget of NZ$100 million (US$80 million). The sources say that so far around NZ$30 million — including operating expenses — has been spent.

“Bugger all has happened,” says one.

“It’s suffering from the same things as INCIS [the failed police criminal information system project]. None of the first steps have been done properly; no documents have been signed off by the governance board.”

Health and Disability Commissioner Ron Paterson told Parliament last month that the health system lacks a coherent IT strategy and there is no architecture proposed that will allow the sharing of records, The Independent Financial Review reports.

NSDP was instigated in response to a national systems review in 2005. The ministry began to build capability in 2006, with the final business case approved in July 2007.

It is a two-year by two-year program, the divide mandated by the Sate Services Commission and the Treasury. One source says the end of the first period was designed to align with the timing of this year’s election, to produce results for the Minister of Health, so he would then approve funding for the next two years.

“They’ve gone for some easy wins but very little major has happened,” the source says.

Alan Hesketh is the deputy director general of the newly created information directorate at the ministry. It is intended to give more focus to deliverables and policy for the health sector.

Hesketh, who took up his role in December, says only 10 per cent of the capital budget has so far been spent on NSDP, which has six different work streams, each with a number of projects.

“Quick wins is a standard project-based approach to ensure we keep momentum and motivation for long and complex projects,” he says.

NSDP includes a review of ProClaim, the main payments engine, which the ministry inherited from HealthPac when it took that body over six years ago.

ProClaim handles NZ$5.6 billion in authorized subsidies. These include capitation payments for primary health organizations, managing general medical subsidies and pharmacy subsidies. It handled more than 94 million transactions in the 2006-07 financial year.

Computerworld is told all the system’s support functions were put in the “nice to have” category but weren’t actually delivered at that time.

“The date was met, everybody’s arse was out of the fire, so nothing more happened,” a former staffer says.

ProClaim had hundreds of business rules, generally correctly applied, but many weren’t liked by the health sector. Computerworld is told a high number of claims were being rejected so some of the business rules were turned off.

“Over the years, rules were added, deleted, turned on and off till the business didn’t understand what business rules it had,” one former staffer says.

“Claims that were rejected because they didn’t meet business rules had to be handled manually. ProClaim got a bad name. It also failed from time to time and it certainly didn’t meet the mission-critical test.

“For example, anti-fraud rules were never included but when an incident of fraud occurs, ProClaim is blamed.”

Under NSDP, a request for information was generated that described health payments, the first time this has been done at a business level.

“ProClaim was not a dead duck but an ailing one,” a source says. “It’s suffered from no check-ups and no remedial action over the years.”

The source estimated the invested cost in ProClaim is around NZ$25 million.

Hesketh says ProClaim is eight years old and that the business processes have moved on to a case management basis, rather than what he describes as “tactical” payments.

“It is appropriate that it [ProClaim] be reviewed and replaced.” He says the system was not designed to handle the complexity of moving from single transactions to a case management environment.

Hesketh confirms that it is only “relatively recently” that ProClaim interfaced to the ministry’s Oracle Financials. Longer term, he says, the ministry’s three payment engines will be consolidated into Oracle Financials.

Another project linked to ProClaim, Pharmacy Online, is expected to go live in April.

After NSDP had addressed the RFI, it was decided a new system was needed but there was concern there might not be enough money, a source says.

The former staffer says the software needed refactoring rather than replacing, and that the service-oriented architecture allowed that to be done.

“There are things in the core software that do functions that people don’t know anything about or where they happen.”

A further project, named Socrates, is also said to be in trouble. The system, which was implemented just before Christmas, handles core payments for support services for those with disabilities. An entitlement is generated that relates back to a contract for service.

Socrates is a hosted system for individual NASCs (needs assessment services coordination agencies) to use, to provide an interface back to the ministry’s payment systems. There are 16 NASCs within the ministry, and 17 run by district health boards. But the DHB NASCs are still using legacy systems, and there doesn’t appear to be a plan to migrate them to Socrates.

“The DHB NASCs don’t want to take ownership of an unstable system,” another source says.

But according to Hesketh, Socrates was always focused on the ministry. “We thought it was the best outcome to put it in place here, then talk to the DHBs.”

Computerworld has been told Socrates was originally contracted out at NZ$800,000 but that, so far, around NZ$5 million has been spent.

Hesketh says the NZ$5 million was always the budgeted figure, but that a contract for NZ$800,000 may have been let within the broader contract. “There has been an increase in scope but that has been approved,” he says.

Such things as address validation have not been done, and a major bug has the system in a loop, extracting the same releases day in and day out, Computerworld is told.

“Nobody knows how to fix it,” the source says. “Nobody is actively managing the deliverables.”

The Ministry of Health employs 230 IT people, and the information directorate has total staff of just over 500. But it’s near impossible to break out what is spent where because software expenditure is buried within service expenditure. It’s thought that, annually, around NZ$14 million to NZ$15 million is spent on capital and operational expenditure.

Computerworld interviewed current and former staff of the ministry, who agreed to speak on condition of anonymity. One thing they all agreed on: lack of communication both internally and externally is a fundamental problem at the Ministry of Health.

Hesketh says the ministry is beginning a review of the information directorate to determine the best structure for the future.

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