Whether abandoning ship or being pushed overboard, Te Whatu Ora – Health New Zealand’s digital health leaders have taken the brunt of wild storms in recent months.
The latest casualty was Health NZ’s chief of data and digital, Leigh Donoghue, whose role was unceremoniously scrapped last week.
The official terminology is “disestablished,” and Pulse+IT understands Health NZ’s director of strategy and investment Darren Douglass will be stepping into the helmsman’s role, while chief executive Margie Apa and appointed commissioner Lester Levy finalise their “reset of Health NZ” which includes a “reshape” of the executive leadership team.
Mr Donoghue’s plight probably wasn’t helped by his various colourful – though some might say valid – descriptions of New Zealand’s health IT infrastructure over the past year as an “ugly baby” akin to an “old banger” in need of a new chassis (descriptions that may have presented a few headaches for Health NZ’s media wranglers too).
In the meantime, Mr Douglass (more from him below), will have to busy himself finding $100 million of savings from the data and digital (D+D) budget. That’s on top of the $380m cut from D+D in the government’s Budget 2024 in May.
We found out about the $100m target courtesy of a letter from the joint health unions to Ms Apa (and shared with Pulse+IT), which expressed concern about a briefing the unions had received on “six elements of a savings programme which is in the process of being implemented across Te Whatu Ora,” and included the $100 million savings target in data and digital.
The unions – including heavy-hitters APEX, NZRDA, MERAS, STONZ, ASMS, PSA and NZNO – outlined concerns about potential cuts to positions and services and questioned the rationale behind the savings target, including a supposed monthly $147m overspend across Health NZ.
The unions said they hadn’t received any detailed financial information to help them understand “how or why there is a budget overspend,” saying that until that was clear, any cuts should be shelved due to potential risks, including adverse outcomes stemming directly from the data and digital cuts.
While the $100m savings target revelations came to light just prior to Ms Apa announcing the disestablishment of Mr Donoghue’s role (and that of chief people officer Andrew Slater), he’s far from the only one leaving the good ship D+D at Health NZ.
Just last month it was announced that director of sector digital channels Michael Dreyer would be leaving to take up a role at the Accident Compensation Corporation (ACC), while chief data officer Kari Jones has taken up a position as executive director transformation and operational delivery at the Financial Markets Authority.
Sadly, the sackings and resignations appear as inevitable collateral damage from the government’s apparent slash and burn approach to data and digital, beginning with the massive budget cuts in May.
Those cuts included more than $330 million in funding allocated to data and digital in the 2021 and 2022 budgets, with unspent funds put aside for the Hira program and data and digital foundations returned to the treasury and now contingent on investment-ready business cases.
There was also a cut of $50m in capital investment for data and digital foreshadowed in the 2024 budget. As the Digital Health Association pointed out, all up that’s nearly half a billion dollars “slashed” from a fund that represents around 2.5 to three per cent of the total New Zealand health budget. For context, that compares to international averages of between five and eight per cent and more than 10 per cent in leading countries.
These cuts came despite the Health Minister being told that half of Health NZ’s critical IT hardware was past its intended lifecycle and that significant near-term effort and investment was needed just to keep the lights on.
The government policy statement (GPS) in July seemed to acknowledge the problem, and stated that ensuring the health system had the digital infrastructure needed to meet current and future demand was among the top five priorities for health.
Meanwhile, the dearth of digital funding has seen a pause on the flagship Hira health information sharing project, with its funding diverted in order to stave off payroll issues at Health NZ.
At the time, Mr Donoghue confirmed to Pulse+IT that as part of Budget 2024, it was decided that unused contingency funds for the Hira interoperability project would be redirected to payroll stabilisation “to support the mitigation of immediate risks” – a move that raised eyebrows across the sector.
The first stage of Hira was completed at the end of June and saw progress made in the sharing of health information amongst consumers, whānau and service providers, “with core interoperability components completed and key building blocks put in place for future digital health services”.
In announcing the pause on Hira, Health Minister Shane Reti said the project had been shelved “until I seek advice around the next steps. In saying that, I have given strong direction that priority projects must continue.”
Pulse+IT can exclusively reveal that two days before the Budget was announced in May, Darren Douglass provided advice to Dr Reti detailing the impact of the Budget 2024 savings related to the D+D B21 and B22 tagged contingencies mentioned above.
A document provided to Pulse+IT in response to an Official Information Act request, which was initially declined and is still heavily redacted, details potential risks from the funding cuts, including security vulnerabilities, service outages and delayed response and recovery times.
Mr Douglass told the Minister that the tagged contingency funds came against a backdrop of “a challenging legacy landscape” and systems that were “end of life” and “not fit for purpose”.
We’ll have more on this story next week, but we’re doubtful of a meaningful response to our inquiries from the Health Minister, who has repeatedly told us that funding for data and digital hinged on Health NZ’s expected 10-year infrastructure investment plan.
“Once Health New Zealand delivers a new 10-year plan that sets out the size and scale of investment needed for digital infrastructure, this will mean the Government can make informed decisions about putting resources where it will have the greatest impact,” is Dr Reti’s stock response to queries about D+D.
In the meantime, it appears data and digital will continue to be Health NZ’s less-than-attractive youngest child, like a boat set adrift with a broken chassis, prone to underfunding and mixed metaphors – or just a can being kicked down the road.
On that soggy note, we come to our poll question for the week:
Is digital health progress in NZ going to sink or swim under the weight of the cuts?
Vote here and leave your comments below.
(We also asked: If you voted sink, can anything be salvaged? If you voted swim, what will be the lifejacket?)
Last week, we asked: Should there be a separate oversight body for AI in healthcare?
Yes indeedy, our readers said: 78 per cent were in favour, with a range of options suggested. Here’s what you said.
Swim – Better management
I am sorry if what I have to say causes offence in some quarters, but the question must be asked; Why has te Whatu Ora focused on a $380 million plus ‘adventurous and exciting’ HIRA project? – when:
A. Existing core TWO infrastructure is elderly and failing because it is out of date/no longer supported, (that is what they are saying).
B. HIRA’s was an unproven approach to solving a really difficult problem – and it was clearly adrift in a sea of buzz words and acronyms, while being touted by its proponents as ‘a world first’ – a most dubious objective in my view.
C. There are a number of regionally deployed technologies that are already solving a significant proportion of the needs HIRA sought to address and which with modest ‘grass roots-level’ investment could do a lot more to help interoperability and connectivity, adding immense value to the day to day activities of over-worked clinicians, and providing better patient outcomes within very short timeframes.
I believe that the new government made a good decision to call a halt to the unchecked expenditure on this project. Let’s hope the Molesworth Street Mandarins can provide a realistic roadmap that will get them out of the quagmire of technical debt they now ceaselessly complain about.
If they do not do what government has requested and put together a reasonably coherent plan, I do not imagine that I will be the only person calling for their heads to be placed on pikes.
Lets shift the effort re sector interconnectivity to the organisations who actually know how to do it and have been doing it for the past 30 years, despite government’s best efforts to upstage and undermine them.
Lastly… what’s the reluctance to answer OIA enquiries and provision of heavily redacted responses all about? Surely we need openness and transparency. Or is all of the redaction simply an effort to disguise the fact that the authors of the document do not know what they are doing?
Best wishes to all, I think that better times lie ahead.
Tom Bowden
SINK – too many issues and a failure to recognise the need to replace basic infrastructure. Health NZ needs a disaster to get adequate attention from Minister Reti (and Treasury).
Swim – Health one for the north island
Sink – I don’t want it to sink, it was going so well and extremely short sighted to make the cuts. But with the standing down of the CEO and other (big) cuts, it might be hard to resurrect- sadly
Sink – Not with this government. Things will limp along until a high profile incident, at which point the government will bandaid the issue, probably costing more than the strategic solution would have. Data and digital needs proper investment. People cannot do more with less.
Sink – Without understanding the complete picture, they might just burn through funding without accomplishing much.
No all is lost
Sink – Systems still within lifecycle and fit for purpose could form the skeleton. However the longer the other out of cycle systems aren’t replaced, the entire system will spiral.
Sink – Don’t believe so. Could open up additional operational risk the likes of Waikato hospital cybersecurity attack.
Sink – Systems replaced in the last 5 years are ok, but that is a minority.
No – the key to transformational change is consolidation of services so the new government’s decision to devolve responsibillity to regional CEOs is a backward step.
Sink – The sector will flounder and be left behind.