$25m total spend on controversial health app, scathing report reveals
The true cost of controversial online doctor service SmartHealth has finally been unveiled at $25.7 million in a damning review that found leadership wanting, poor implementation and a lack of users at the core of the app’s failure.
Waikato District Health Board canned the struggling app last month but until yesterday the full spend has never been revealed.
A five-month-long EY [Ernst & Young] review of SmartHealth and HealthTap, the American company that powered the service through smart technology, discovered a series of bungles that led to a $9m budget blowout.
They included:
The virtual health platform was not fit for Waikato purposes, and no effort was made to link SmartHealth with other DHBs or GPs in the region;
A group to ensure the integration of SmartHealth with the wider Waikato area did not eventuate, meaning the only point of governance lay with the board. This meant GPs in particular were never structurally connected with the project;
There was a multitude of issues with the technology, including that HealthTap used a cloud-based system that no one within Waikato DHB knew how to fix, and that many of the target towns and users did not have the connectivity or devices needed to use SmartHealth;
A particular driver of HealthTap’s poor reputation was its design for the US healthcare market, which meant it had attributes that were strongly at odds with Waikato Hospital’s clinical culture;
The HealthTap contract price was a fixed annual licensing fee that did not reflect staged uptake of SmartHealth and meant the DHB paid the highest price from the outset.
“This meant the DHB was under immediate pressure to achieve volume through a ‘big bang’ approach rather than a progressive and staged roll out,” the report said.
“Implementation of HealthTap lacked clear direction, transparency and open communication.
“Other health organisations both in Waikato and the wider Midland region were surprised by Waikato’s introduction of HealthTap, and organisational relationships suffered as a result.”
Analysis of the costs showed HealthTap was paid $15.4m for the two-year trial, more than the original business case request of $14.8m.
The total budget blowout was $8.91m and the DHB saved $1m when it axed the service on March 31, before the trial was due to end this month.
The review found of the 10,301 users signed up to SmartHealth, which was only half of the projected target, more than half of them were in Hamilton — which defeated the purpose of the app.
And about 3000 of its users were clinicians, many of whom said they felt pressured to sign up.
Of those, only 50 per cent of them activated their account and 80 per cent of those registered did not complete the online training tool, which meant only about 600 clinicians could actually use SmartHealth.
There was were even connectivity problems within Waikato Hospital.
The report said former chief executive Dr Nigel Murray took responsibility for clinical change, such as involvement and acceptance by doctors, but did not follow through.
Clinicians spoke of a presentation by Murray announcing HealthTap but said there was little to no consultation.
Murray and former board chairman Bob Simcock drove the project when they presented a proposal for virtual health to the board in June 2015, getting it signed off the following month. EY did not interview Murray and did not comment on the procurement process, previously criticised by Audit NZ as raising concerns, because that process is currently being investigated by the Deputy Auditor-General.
The original business case, signed off by the board with additional project costs to be approved by the chief executive, was released publicly for the first time yesterday.
Waikato DHB interim chief executive Derek Wright said the review, commissioned by the DHB, proved the health board was justified in canning the service which ended in April.
“The report shows that we introduced a new system too quickly, without proper collaboration with staff, the community and other providers and the organisation was not ready for this huge change.”