Photo: Unsplash / RNZ
A project to replace a system that dishes out $12 billion of health payments every year is in trouble.
Health NZ / Te Whatu Ora's health sector agreements and payments system was rated three years ago in danger of complete failure. But three years on it has spent $85m only for the replacement project to appear to be "unachievable", a newly released Treasury paper prepared in March shows.
By then, the $116m budget approved in 2021 had already expanded to $140m, with officials warning: "Successful delivery (to the approvals in the last Cabinet approved business case) appears to be unachievable. There are major issues which at this stage do not appear to be manageable or resolvable.
"The programme may need re-baselining and/or its overall viability re-assessed."
100 miillion dollar health IT project in trouble
The IT mess adds to the financial morass that Health New Zealand is in, despite Health NZ's previous assurances that "data and digital services are uniquely positioned to reduce pressure on our health system".
The problems forced the agency to carry on relying on an old and failing system that handled more than 120 million transactions a year with public health system suppliers and others.
A 2021 official report said the agreements and payments system presented ongoing operational risks, and increasing outages could impact specific providers "or potentially lead to a total system failure impacting all funders and providers that rely on the system".
Three of the system's core services were meant to have been replaced by December 2022, and the rest overhauled by the end of this year.
Health NZ / Te Whatu Ora's health sector agreements and payments system was rated three years ago in danger of complete failure. Photo: 123RF
"The solution is still very much needed," said reviewers, after raising the alarm in the first so-called Gateway review in March this year.
The project was still the best way forward, but needed a new business case to reflect when and how it would be delivered, it said.
In the paper, Treasury said too many projects across agencies were being poorly planned, and their business cases were not up to scratch, or had not been done by the time Cabinet was being asked to decide about them. It had begun a programme to try and bring standards up.
Strained budgets across government were having an impact, it said in March: "Reviews are being rescheduled or cancelled as a response to fiscal or budget constraints. Ongoing fiscal uncertainty is requiring timelines and investment activities to be rescheduled."
RNZ has asked Health NZ for a response on what has gone wrong, the risks and what has been done since March to deal with them.