Costs of health project kept under wraps

Those behind a national DHB computer system are refusing to reveal how much it has cost taxpayers.

Work on the National Oracle Solution (NOS) began in April 2015 with the aim of replacing health boards’ ageing finance and supply chain systems.

The project is currently being reviewed by the Health Ministry but, to date, has absorbed millions of public health dollars.

Those heading NOS have repeatedly refused to reveal the exact cost of the programme but conservative estimates put it in the tens of millions.

The national programme is jointly managed by NZ Health Partnerships and the country’s 20 DHBs.

Since its inception, the project has been beset with difficulties, including allegations of low staff morale and a lack of communication between the various health boards.

Waikato and Canterbury DHBs have been key supporters of the initiative which has already missed two go-live dates.

Its next go-live date is July 1. In response to an Official Information Act request in September last year, NZ Health Partnerships declined to detail the exact cost of the project, saying it would be released publicly in earlyOctober.

In a follow-up statement in December, the DHB-owned organisation said it was unable to give the programme’s cost.

In March, chief executive Megan Main again refused to detail the original budget for the NOS programme, or reveal its cost overruns, this time citing commercial sensitivities.

Main also refused to say how many DHB staff members and contractors were engaged on the NOS programme.

A health sector insider, who spoke on the condition of anonymity, said the principles underpinning NOS were sound but the project had been hampered by poor communication from those leading the project.

A lack of transparency around costs should prompt health board members to ask tough questions, she said.

"Essentially NOS is a shared services model and it is looking to create economies of scale. But there is real concern that it won’t meet its go-live date. Every time the project misses its launch date, the sector misses out on potential efficiency gains. It makes you question the whole governance framework around such projects.’’

The NOS programme was born out of another programme dubbed Finance, Procurement and Supply Chain (FPSC).

NOS inherited $10.5m of funding from the FPSC project.

Waikato DHB interim chief executive Derek Wright was ‘‘reasonably confident’’ the NOS programme would meet its go-live date after having received regular updates on its progress.

The NOS programme had been in the works for several years and promised to deliver efficiencies and cost savings to the health sector.

‘‘We’ve been waiting for this for a wee while so if the project is delivered in July or August I don’t think it will make a huge difference,’’ Wright said.

‘‘We’re a country of just over four million people and it makes sense to have one system of procurement. It’s a bit like Pharmac. When we moved to having Pharmac negotiate and purchase all our medicine, we suddenly got much better deals and we were able to reinvest more money into pharmaceuticals.

‘‘Like any big IT project it’s had its issues but from a DHB point of view we still see NOS as being a solution for New Zealand.’’

Wright said the Labour-led Government appeared committed to the project.

Waikato DHB member Martin Gallagher said it was appropriate for health boards to use one platform when it came to financial and accounting systems.

Gallagher said he would seek a briefing on the project.

‘‘For a country of four and a half million people, having singular systems has much to commend it. But I will be asking questions and I have found Derek Wright extremely receptive and interactive with the board in these areas,’’ Gallagher said.