Tuesday, February 28, 2012

The Pot Seems To Have Been Bigger Than We Have Ever Imagined. It Has Mostly Been Spent Apparently With More Needed!

The following appeared today:

Labor's Personally Controlled Electronic Health Record system blows out to $760m

SPENDING on Labor's Personally Controlled Electronic Health Record system has blown out to $760 million, almost $300m more than the $466.7m budget.
The National E-Health Transition Authority has swallowed the original allocation almost whole -- it has received $466m in taxpayers' money since the PCEHR was announced by former health minister Nicola Roxon in 2010.
The $760m price tag to date has been uncovered by The Australian in a detailed analysis of statutory records available from the federal Health Department, AusTender, the Senate Community Affairs committee and the Council of Australian Governments.
COAG allocated $218m in base funding for NEHTA for a three-year period from July 2009 until the PCEHR's promised operational start on July 1 this year.
Half of this funding came from the commonwealth while state and territory governments contributed the other half.
The Health Department gave NEHTA another $136m to develop specifications for the infrastructure and related software and systems, from July 09-12.
The latest departmental records show NEHTA recently received a $21m top-up on funding to $110m, for the provision of services related to the PCEHR's introduction from January last year.
The original $38.5m contract was for six months to the end of June last year, but extended in August to $89m for the period to October 31.
Separately, NEHTA has received $1.5m in grants funding for four related projects.
NEHTA's latest annual report shows $122.4m in revenue during 2010-11, comprising $114m in receipts from jurisdictional members and $1.2m in other income, mainly interest payments.
At the time, NEHTA was holding $10m in revenue received but not yet earned.
A year earlier, NEHTA reported $95.6m in revenue, with $99m from members and other income of about $765,000.
A NEHTA spokeswoman said yesterday the earnings stated in the most recent accounts "represented revenue received by the entire company, not just that pertaining to COAG funding".
"NEHTA's budget for the current year has been set in accordance with funding allocations for the COAG and PCEHR programs," she said.
"There have been no new or additional allocations from COAG."
More here - showing where all the private sector contracts went and the large sums spent there get worked through in some detail:
In an opinion piece from the author we read.

E-health records' $1m a day bill

KEVIN Rudd's plan for a popular, patient-centric e-health record system - announced to general head-scratching in early 2010 - has morphed into a lumbering monster that remains frustratingly out of everyone's grasp.
Allocated a mysteriously precise sum of $466.7m over two years in that budget, it now appears the decision was made by the boss in a hurry, without the benefit of proper cabinet consideration as former health minister Nicola Roxon revealed last week.
Expenditure has now reached $760m, meaning Labor has been spending an incredible $1.04m each and every day since - a sizeable increase on the originally budgeted $639,315 a day for delivery of a personally controlled e-health system.
While Roxon was lashing Rudd over his mishandling of "some very big health decisions", she surely compounded difficulties by insisting on a flat, July 1, 2012, launch date for the PCEHR.
Common sense should have dictated a degree of flexibility around the deadline in such a technically complex IT project.
Unsurprisingly, the e-health arena is in turmoil, and the Senate Community Affairs committee is currently trying to establish what we will actually get when the PCEHR is turned on.
More here:
On the basis that these figures are about right - and lets not quibble about a few million here or there - it is safe to say this is a bit of an overrun - and it is more important to realise that lots more will be needed in just on four months from now.
It seems to me this report makes it crucial for the current PCEHR Senate Enquiry to ask for, from Government, an urgent report that lays out clearly just what has been spent on what and more importantly what the future spending is planned and over what ongoing period.
I personally would also like to see the Auditor General get involved to work through both the numbers and the value for money aspects of what has been delivered to date.
I would also like to see an independent investigation on just what impact this huge expenditure has had on the local Health Software industry and if there have been damaging impacts on what are many really quite small companies - compared with the scale of Government and the major contractors.
I take the view that the public is entitled to be assured that for the money spent they have had value delivered. I fear we won’t see the work done but is really should be before more funds are committed. We need to know our taxes are being well spent. Remember this is an investment of over $30 for every man, woman and child.
I wonder what others think about such expenditure continuing to go un-assessed, un-justified by evidence or business case and apparently un-ending.
Remember there is no chance at all that we will see an operational PCEHR any time soon - and certainly not in 4 months time. A registration portal maybe but not much else. I am sure I could have saved a good few hundred million if all that I had to deliver was a registration portal. 
Also of great concern is the apparently chaotic way the PCEHR was planned and executed. That is another aspect of all this - along with the spending - that should be closely examined.
David.

8 comments:

Anonymous said...

Remember, remember. NeHTA has morphed into another great big perfectomissimo Y2K-IT-con'.

Anonymous said...

Spending this sort of money in such short time requires real talent. We saw that same talent in the lead up to the Global Financial Crisis and it seems reckless spending still has a little time to run before we hit the wall and come back to reality. Only technocrats could manage the spend this much and produce so little, all while appearing to be awefully busy. Its a talent, that's for sure!! At some point in the future we will look back and shake our heads at how stupid this whole process has been.

Anonymous said...

"At some point in the future we will look back and shake our heads at how stupid this whole process has been."

Hey, don't know about you but most of the folks I talk to have been shaking heads since about mid 2010 and many of them work for NEHTA! Our necks are getting pretty sore at this stage of the game.

What a bloody waste. Yes there will be salvageable bits, and some good will eventually come, but this level of inefficiency is of Olympic proportion.

It need not have been this way, but I fear unless we have profoundly different leadership all will repeat the next time we heave over the trenches, as we must because e-health is a national must do.

Anonymous said...

It seems funny, because I know from first hand experience how tightly they are running the budget for the private corporations who are providing consulting work, so they clearly know how it *should* be done, but just don't see any reason to do it themselves!

Anonymous said...

Before NEHTA there was DOHA's humongous HealthConnect project.

You may recall HealthConnect morphed into NEHTA when DOHA distanced itself from HealthConnect by creating an arms length removed entity called NEHTA Ltd and pulling the blind down on transparency.

So in addition to this $760 million we also need to add in many hundreds of millions of dollars previously frittered away on HealthConnect which delivered absolutely nothing, zilch, zro, SFA.

Anonymous said...

Hold on now, didn't HealthConnect leave us with the Northern Territory Shared Electronic Health Record and the one used by the Wave One Sites? Oh, almost forgot the Wave One guys used the Shared Record to get their funding;told the Senate Inquiry on Health Identifiers they would use it, and then decided to ditch what they were funded to use and set up their own $1.00 company and start all over again. Guess you are right, the money is being spent for nothing. And without any semblance of governance

Anonymous said...

This reminds me of the NSW debarcle back at the turn of the century where there was a lack of fit in the business environments and strategies, organisational structures and strategy-structure pairing as well as the management process-roles pairing. The diffusion process experienced problems because of the lack of fit in the strategy-structure, strategy-structure-management processes, and strategy-structure-role relationships.
This seems to be a problem that has never been resolved, I wonder how many of these idiots associated with the NSW failure are involved in PCEHR on both sides of the fence, if they are involved directly or indirectly we might all benefit from them owning up and retiring from involvement in any eHealth initiatives

Anonymous said...

"The diffusion process experienced problems because of the lack of fit in the strategy-structure, strategy-structure-management processes, and strategy-structure-role relationships.
This seems to be a problem that has never been resolved, "
Goodness gracious - I had no idea there was such a problem, but we had better sort it out soon - it sounds contagious!