Queensland digital hospitals program facing $250m cost blowout
A scathing report into the digitising of Queensland public hospitals has found massive cost blowouts, saying the e-health rollout is not providing “value for money”.
- E-health project cannot be completed without more funding, the auditor-general says
- Lack of competition means the ieMR project is unlikely to provide value for money
- Health Minister says Queensland patients are already getting better health services
The report found cost overruns of $256 million — a jump of 42 per cent — if the implementation was ever to be completed.
Queensland auditor-general Brendan Worrall found the program “is now at a critical junction because it cannot complete implementation in the remaining 12 hospitals without more funding”.
He also found insufficient financial information was being provided by member hospitals, and that the Health Department did not have proper software to record project costs.
The auditor-general’s report also found the $600 million integrated electronic medical record (ieMR) project had not been proven to provide value for money.
“The department appears to have limited leverage when negotiating with the vendor, when contract extension options are due,” the report said.
“This is because the vendor has the benefit of knowing that the department has not sought, and shows no indication of seeking, alternative ieMR options. Therefore, there is no competitive tension placed on the vendor.
“As a result, the department cannot demonstrate that it continues to obtain the best price with the vendor to ensure the state is getting best value for money from the current arrangement.”
There was no evidence Cerner had overcharged for services during the contract period.
The ABC asked the company for comment.
Deputy Opposition Leader Tim Mander described it as a “health bungle”.
“The thought there’s another $250 million IT blowout has the sniff of a health payroll debacle all over again,” he said.
Steven Miles said the Government welcomed the auditor-general’s recommendations. (AAP: Dave Hunt)
“That is $250 million that could be spent on better care of patients and more hospital rooms.
“This is a damning report and shows again this minister is not capable of handling his portfolio.”
Health Minister Steven Miles appointed forensic accounting firm, Deloitte Australia, to delve into the e-health project after acknowledging there had been problems.
“Like any audit report, it has made some recommendations and the Government welcomes those recommendations,” he said.
“A number have already been implemented.”
The project is intended to provide patients’ medical records in a fully digitised environment for clinicians to access, similar to the federal My Health records.
The five-year Queensland contract was given to international IT health specialist Cerner, which has been responsible for similar e-health projects in New South Wales and Victoria.
Queensland Health director-general Michael Walsh said he had already met with Cerner executives to “ensure we have the right governance in place”.
He confirmed the department had begun “an independent assessment to confirm that, as per the contract, the prices being paid for the system were no less favourable than those being paid by other health providers in Australia”.
Mr Walsh said if the audit found Queensland taxpayers had been paying too much for the digital conversion then “we would get refunded”.
The rollout was also under review and a new committee was to be set up to expand oversight of the project.
‘Patients are getting better health services’: Miles
The Government had hoped to have 27 public hospitals digitised by 2020.
As reported in the 2017-18 state budget, the total cost of the integrated electronic medical record (ieMR) program was projected to be $1.2 billion.
Despite the financial blow-out, Mr Miles said the project was transforming health care in Queensland hospitals. (ABC News: Kirsty Nancarrow)
But the auditor’s report found: “The department underestimated some of the cost elements of implementing the ieMR in its 2016 ieMR business case”.
As a result, a new business case for the program had been ordered.
Mr Miles said despite the financial hiccups, the e-health system was transforming health care in Queensland.
“That report confirms what we have been saying, that thanks to the ieMR patients in Queensland are getting better health services,” he said.
“Doctors and nurses are going about their work in a safer and higher quality way and our hospitals are benefiting.”
The department reported that in September 2018, across nine public hospitals using the e-health system there were: