State seeking e-health damages

By: Sean Parnell

THE Queensland Government has raised the stakes in its legal row with developer TrakHealth and is seeking almost $100 million in compensation for a failed e-health contract.

When Queensland Health scrapped a $30 million hospital software contract with TrakHealth three years ago, the company took Supreme Court action to recoup $18 million in losses and unspecified damages.

TrakHealth, which was to supply a patient administration system and a clinical information system, accused the government of compromising the project and damaging its reputation.

"Queensland Health's behaviour was unreasonable and unconscionable," a TrakHealth spokesman argued at the time, as the company sought work elsewhere.

In its defence, Queensland Health involved US-based InterSystems, which now owns TrakHealth, and database pioneer Terry Ragon, filing reams of documents in the Brisbane Supreme Court to demand $21.5 million in compensation.

Queensland Health argued that TrakHealth misrepresented itself and its product, MedTrak, ahead of an order being placed in 2003, while Mr Ragon, the founder of US-based InterSystems, failed to intervene to limit Queensland Health's losses.

Earlier this month, Queensland Health amended its defence and counterclaim to seek $98.2 million in compensation to cover the increased cost of delivering such software in the current market.

Queensland Health estimates it would cost $132 million to have a similar system installed now, not to mention the cost of keeping other systems going in the meantime, well beyond the $33.81 million involved in the original deal.

"To put Queensland Health in the position in which it would have been had the plaintiff performed its obligations under the contract, it would be necessary to procure from a different software supplier a product equivalent to that which the plaintiff contracted to deliver," court documents state.

A spokesman for TrakHealth, InterSystems and Mr Ragon declined to comment.

It is understood they have until today to file documents in the Supreme Court to respond to Queensland Health's amended defence and counterclaim.

A Queensland Health spokesman said e-health remained pivotal to the future of sustainable healthcare and the department had committed to a massive information and communications technology strategy.

"This strategy aims to create a consolidated holistic view of patient care by enabling ICT investment over the next four to seven years," the spokesman said.

"It will ensure Queensland is moving towards supporting the electronic collection, transmission, safe storage and access of patient and clinical information that supports the improvement of patient care."

Queensland Health's priorities in the strategy are discharge summaries, results reporting, order entries, electronic clinical notes, statewide scheduling and comprehensive medication management.

The department, which plans to introduce new technology systems and capability "where necessary", has engaged alliance partners EDS (for enterprise architecture) and PricewaterhouseCoopers (for change and program management) to assist with this stage of the strategy.

In the Australian market, TrakHealth is most active in Victoria, but it also has contracts in Asia, New Zealand and Britain.