Health Minister Shane Reti told the Health NZ board that he was not happy about the digital problems facing the agency, despite a funding cut. Photo: RNZ / Samuel Rillstone
Health New Zealand (HNZ) has suffered a further blow to its plans to upgrade old and fragmented digital and data systems, which are vital to keep hospitals running well.
The joint health unions says the agency has told them it must save another $100 million from data and digital work.
While Health NZ refuses to confirm or deny this, the unions have released a letter sent to HNZ, saying the move was among the proposed cost savings explained to them by health authorities at a meeting on 2 October.
The unions are calling on Health NZ to suspend any attempts at cost savings until they were justified.
"The disestablishment of any one of these projects, programmes or positions may well have significant risks or costs elsewhere in the organisation," their letter said.
"For example, the data and digital team cannot assure us the scale of cuts being asked for, will not increase the risk of another cyber-security attack similar to Waikato Hospital" in 2021.
Health NZ has repeatedly stressed how vital improving its digital and data systems is, saying they were "uniquely positioned" to improve national healthcare. The previous government put up half a billion dollars for spending over the next several years.
But in May, the new government cut at least $340m of that, leaving a national digital upgrade project - called Hira - less than a third complete.
Despite this funding cut, Health Minister Shane Reti told the HNZ board in July that he was not happy about the digital problems.
A newly released letter showed Reti noted his "serious dissatisfaction" and spelt out four key "deep" problems including: "Limited progress in addressing the issues of poor state [sic], fragmented IT, much of which relies on legacy platforms that are no longer effectively supported."
Reti told RNZ on Wednesday that the government was focused on resolving the most critical digital and data issues, and he was waiting for a long-term plan.
Payroll IT was a particular problem, with papers saying rostering and scheduling were not digitally controlled, and "a substantial portion of medical personnel record their time on paper".
"There is no stable or single source of truth" on pay, the financial papers released by HNZ on Tuesday said.
Overspending on extra nurses has been blamed as a major source of a massive HNZ deficit. The issue of poor IT had played its part in that: "The ability to produce a consistent, timely and stable picture of personnel costs is extremely difficult, time consuming and subject to risk of manual errors," a report to Reti in May said.
Health NZ head Margie Apa said the agency was "undergoing a reset to ensure we get back on budget and live within our means", and had important processes to complete in consultation with staff and unions, and would not comment on "any changes" in the meantime.
Any further attempts to return $100m savings this financial year would likely impact on programmes that, as of 31 March, were showing very limited spends, including:
- Part of digital foundations upgrade - $58m funded, $14m "committed" and just $6m spent
- Digital work on setting up National Public Health service - $6m funded, $2m committed, $300,000 spent.
- Southern Health digital transformation programme - $4m funded, $1m committed, only $20,000 spent.
Compiling these figures hit problems due to data problems, Tuesday's papers said.
HNZ and the government have repeatedly said data and digital was a priority to upgrade. Butt the papers appear to show a drop in data and digital spending in total this year to $765m, down from $900m.
Data and digital upgrade spending was deliberately delayed last year to try to get strategies to line up, the papers said. They showed just $47m had been used out of a budgeted $180m for digital capital spending in the five months to November 2023, the biggest variance of any capital spending item.
A recent risk assessment said IT infrastructure was "critical to operating on a national level", but "cohesive contracts process and systems [are] yet to be established".
This is not all on HNZ's shoulders. A $140m upgrade of IT systems that manage $13 billion of payments to external health services is currently running at just four percent capacity and its rollout is far behind schedule, with the papers showing the Office of the Auditor-General had highlighted the risks of "obsolete and increasingly unstable systems" to the Ministry of Health "for a number of years" .