Health project costs reveal $6.2m blowout
A national DHB computer system designed to replace health boards’ ageing finance and supply chain systems blew its budget by more than $6 million.
The National Oracle Solution (NOS) is jointly managed by NZ Health Partnerships and the country’s 20 DHBs.
Until now, health bosses have repeatedly refused to detail the costs of NOS, citing commercial sensitivities.
However, following a complaint by Stuff to the Office of the Ombudsman, NZ Health Partnerships confirmed NOS has gone $6.2m over its budget, having already cost taxpayers $10.5m. Work on NOS began in April 2015 and was born out of another programme dubbed Finance, Procurement and Supply Chain (FPSC).
NOS inherited $10.5m of funding from the FPSC project, which had an overall budget of $88m.
Waikato DHB has been a key supporter of the initiative, which missed two go-live dates. NOS is now being used at Waikato Hospital after its third go-live date was pushed out to July 1 this year. NZ Health Partnerships initially declined to detail how many staff and contractors were assigned to work on NOS, again citing commercial sensitivities.
It has since confirmed 24 staff and contractors were assigned to NOS, with 15 workers based in Hamilton, six in Auckland, two in Christchurch and one in Wellington.
In a statement, NZ Health Partnerships chief executive Megan Main said all 20 DHBs had renewed their commitments to NOS.
Victor Lee, a senior investigator at the Office of the Ombudsman, said NZ Health Partnerships reconsidered its decision not to release the costs of NOS following Stuff’s complaint. NOS has been hampered by difficulties with allegations of poor communication from those leading the project and low staff morale.
A health sector insider, who asked not to be named, said NOS had suffered from a lack of oversight by its DHB stakeholders. NOS isn’t the first IT-related blowout the Waikato DHB has been associated with.
In 2017, it was revealed the Midland eSPACE programme had blown its budget by $28m. That project, which has had its budget increased from $47m to $75m, is tasked with overhauling the region’s health records.
In April, the Waikato DHB abandoned its showpiece virtual health service, SmartHealth. An independent report into SmartHealth found the project’s costs blew out to $25.7m, $8.91m more than anticipated.
Waikato DHB has been a key supporter of the initiative, which missed two golive dates.