Fragmented IT contributes to Health NZ fiscal woes

NEWS - eHealthNews.nz editor Rebecca McBeth

Fragmented IT systems have been identified as a contributor to the fiscal situation of Health New Zealand – Te Whatu Ora, which is overspending by around $130 million a month.

Health Minister Shane Reti says that without urgent action this will lead to an estimated deficit of $1.4 billion by the end of 2024/25. In response, he has replaced the organisation’s board with a commissioner, former chair Lester Levy.

A July Cabinet paper ‘Improving the financial performance of Health New Zealand’ identifies fragmented administrative data systems as a key contributor to the current fiscal situation as they “were unable to identify risk and provide early warning for the impending financial issues until they were already embedded.”

The paper says the causes of issues at Health NZ are deep and reflect a number of structural and cultural matters, including “poor state, fragmented IT”.

“Health NZ inherited a range of disparate data and management systems (such as payroll) from district health boards, many of which rely on legacy platforms that are no longer effectively supported. While the task of modernising this data infrastructure is very significant, there has been relatively limited progress in the past two years,” it says.

You’ve read this article for free, but good journalism takes time and resource to produce. Please consider supporting eHealthNews by becoming a member of HiNZ, for just $17 a month.

In a statement, Reti says that the health reforms have resulted in an “overly centralised operating model, limited oversight of financial and non-financial performance, and fragmented administrative data systems which were unable to identify risks until it was too late”.

Levy is tasked with implementing a turnaround plan with a savings objective of approximately $1.4 billion and has assured the Minister that there will be “no adverse impacts on the delivery of care”, it says.

In an interview with RNZ, Levy said the turnaround plan would mean less bureaucracy, less management, less administration, and less complexity.

“We need to do more with the resources we have got, rather than just constantly asking for more resources, because we need to provide more value,” he said.

When asked whether telehealth will play a greater role in health services as a way to save money he responded that digital health and telehealth provide a lot of opportunity.

“They are not just about saving money, they are about actually creating opportunities for patients that are more user friendly,” he said.

“Whatever is relevant, rational and coherent will be looked at as an opportunity, but not specifically as a way to save money, but as a way to engage with patients in a different way, certainly, and that's already in place in many places.”

Reti told a Digital Health Association (DHA) parliamentary event on 23 July that the health system’s digital infrastructure is as important as the bricks-and mortar hospitals, and “we need to be strategic and think about investment in the long term”.

“Interoperability is key – we need to break down the divides between agencies, systems, and between private and public healthcare,” he told the 400-strong audience.

“A real-world current integration challenge we are working with is bringing together 20 DHB payroll systems at the same time as trying to remedy Holidays Act anomalies. This has resulted in an urgent $25 million reprioritisation of funding in my hands to maintain system stability and extend end of life functionality.”

Chief data and digital Leigh Donoghue said at the DHA event that the massive tech debt in New Zealand’s health system has resulted in “a patchwork of IT systems and fragmented data systems that often impede rather than enable better care, that frustrate our clinicians and provide a drag on health system productivity”.

He said that in the immediate term, Health NZ has a major fiscal challenge and the organisation has clear instructions: be focused and frugal.

But in the mid-term, there is a genuine opportunity through the 10 Year Infrastructure and Investment Plan and collaboration will be key to its success, said Donoghue.

Picture: Minister of Health - Shane Reti

To comment on or discuss this news story, go to the eHealthNews category on the HiNZ eHealth Forum

Read more National Systems & Strategy news

Return to eHealthNews.nz home page