HealthSmart two years behind schedule

By: Karen Dearne

VICTORIA's troubled $320 million HealthSmart project has failed to get the cornerstone Cerner clinical system working at any of its sites, and has replaced only one of 10 Homer hospital systems, which were obsolete when the program began four years ago.

Auditor General Des Pearson said HealthSmart was at least two years behind schedule and more than half of the budget had been spent with only 24 per cent of the planned installations complete.

In a long-awaited review, Mr Pearson said the original budget, which involved health agency co-funding, was not realistic, and the targets were too ambitious.

Victoria's Human Services Department and the Office of Health Information Systems have consistently deflected concerns raised in the state parliament by vendors, industry observers and even an anonymous group of healthcare workers.

The project judged most at risk, but with the greatest potential benefit, is Cerner's Millennium clinical suite, which includes health records, electronic scheduling, diagnostic services, results reporting, and e-prescribing capabilities.

"The first release of the clinical system has been tested by various user groups and is ready for use, but none of the four lead agencies have committed to using the new system," the report says. "According to the original timelines, the acute hospitals in 10 health agencies should be using clinical systems by now, but even if funding negotiations are concluded shortly, the first four agencies are unlikely to meet the June 2009 completion date."

The $79 million deal with Cerner was signed in March 2006, but costs rose by $17 million to $96 million in 2006 -- the biggest price blowout in the program.

A Cerner spokesman yesterday declined to comment, citing contractual obligations.

Replacement of the antiquated Homer hospital system with a modern Patient and Client Management System has also been fraught. HealthSmart initially signed a $50 million contract with local firm iSoft in 2003 to replace the legacy system with iPatient Manager, an "interim" product that would in turn be replaced with Lorenzo, a highly capable next-generation suite.

ISoft ran into difficulties supplying systems to the British National Health Service Connecting for Health program, and was subsequently acquired by another Australian firm, IBA Health Group.

Communications director Greg King said IBA Health was "comfortable tracking to the time frames set by HealthSmart" for completion in 2009.

"The procurement process took longer than expected and the project started nine months later than anticipated, so the department, lead agencies and we as vendor are doing quite well catching up," he said.

"We've got nine lead agencies in our portfolio. We already have three live, we have one in implementation and two others are in the planning stage, so we've only got three sites pending."

Mr King said it was "always good to have a third pair of eyes looking at large projects" such as HealthSmart.

"We don't see anything in his report that we have any major disagreement with," he said.

Oracle achieved the best result among technology suppliers, with its E-Business financial management system implemented in eight of 11 participating agencies. The remaining three were due for completion this month.

Mr Pearson found the Oracle project came in $500,000 over the original budget, at $26.8 million.

TrakHealth has set up its standalone Client Management System in two community health centres, and a further 10 sites wish to install the product.

Mr Pearson found there was "room for improvement" in the shared services arena, where underperformance had a knock-on effect on systems availability.

Meanwhile, a lack of interest by agencies in taking up the payroll system might "trigger" payment of a revenue guarantee to the vendor.

Victorian shadow minister for health Helen Shardey said the auditor's findings were not unexpected, but the extent of the project's failure was a surprise.

"We have supported this kind of technology to bring our health system into the 21st century, so the massive failure is a tragedy," she said. "The project has been completely botched, and it points to a government that is just not capable of delivering on these important projects."