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$2.3 billion needed for health IT

Tuesday, 9 June 2020  
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Return to home page editor Rebecca McBeth


Around $2.3 billion is needed over the next decade to address issues with DHBs’ legacy systems and invest in technologies that enable new models of care, a government report says.


The Current State Assessment of DHB assets provides a comprehensive picture of the state of New Zealand’s hospital buildings and other assets to help guide future investment decisions.


It identifies core IT applications, such as patient administration and financial management systems, as an investment priority.


The report says DHBs have “maintained their IT assets in an environment of accumulated underinvestment” and New Zealand lacks the investment levels necessary to embrace rapid changes in health IT technologies.


“Investment of around $2.3 billion is required over the next 10 years to address issues with legacy systems and to invest in technologies that enable services to transform to new models of care,” it says.


The report refers to an investigation in 2018, which estimated that DHBs spend 2.3 percent of their operating budgets on IT, with 90 percent going to support aged and outdated systems and infrastructure.


According to Deloitte, this needs to shift to 4.6 percent, with 75 percent spent on maintenance and 25 percent on new investments. The figure of $2.3 billion is the amount needed to lift levels to 4.5 percent.


“Over the last 10 years health professionals have changed from acceptance of departmental legacy systems to expectations that systems support the clinical workflow,” the report says.


“This includes support to view and update an integrated patient record, on-the-move, across all care settings and on various devices.”


Issues identified include multiple versions and customisations of core applications, ageing infrastructure and limited network capacity and devices not fit for purpose.


“This reduces productivity, increases costs for maintenance and support and increases cyber security risk,” the report says.


A review in 2018 in the Northern Region found over 1,200 applications across its four DHBs, but only 10 percent were up-to-date, with the rest obsolete or becoming obsolete.


The report says the role of senior medical staff in purchasing IT for their specialty exacerbates this type of problem, leading to a siloed environment which is expensive to maintain and has limited data sharing.


The slow adoption of systems compliant with national data standards also limits information sharing across clinical settings and with consumers.


“Consequently, system users resort to various ‘workarounds’ to overcome lack of access, multiple logins, poor response times and the lack of alignment with clinical workflows. This means the productivity and quality benefits of clinical IT systems are not being realised.”


The report says the move by DHBs to using cloud-based ‘as a service’ solutions means funding for health IT is likely to move to a 40:60 percent split between capital investment and operating expenditure.


“This will enable DHBs to move away from reactive management of complex technology environments, to the development of IT solutions as enablers for the clinical workflow, improved data analytics and new models of care,” it says.


Assessments of DHB systems in 2018 and 2019 showed finance systems in 14 DHBs and patient administration systems in 12 DHBs were rated as average to very poor. Nine clinical portal systems were assessed as good to very good and 13 DHBs had very good pharmacy systems.


Co-chair of the Clinical Informatics Leadership Network Ruth Large says the report reveals the massive technical debt in DHBs.


This debt is often hidden from view, but the Covid-19 pandemic exposed the problem as DHBs raced to adopt digital ways of working such as telehealth.


“You can’t just put a video conferencing solution on top of aged infrastructure as it falls over. It’s like trying to put the roof on a house without doing the foundations first,” she says.


“I’m excited because there’s no doubt that if we spend some money in this area we will make a really big difference to patients’ lives.”


Health Minister David Clark says: “the Ministry is working with DHBs, who are responsible for maintaining and renewing their assets, to address many of the issues identified in the report.


“This includes reviewing DHB asset management plans, following up on remediation issues and developing an asset risk, assurance and monitoring framework.”


Chief executive of industry body NZ Health IT Scott Arrol says $2.3 billion would be a significant investment, but along with the estimated current spend it would need to be specifically ringfenced for health IT.


“Over ten years it would mean around $570 million in total being spent annually on health IT by DHBs, which would be a significant uplift and a major step for driving transformation of the health system, however it would still be behind the global average.”


If you would like to provide feedback on this news story, please contact the editor Rebecca McBeth.


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