Health report pushes for national shared service agency

Key projects, including the Health Management System Collaborative, could be deferred or canned

The Horn report into the New Zealand health system, released yesterday, is recommending a major shake-up in the delivery of IT and other services to the sector.

The report recommends the establishment of a national shared services agency, modelled on Pharmac, which it says has done well in containing pharmaceutical cost growth.


See also: Funding hampers health interoperability quest


It also finds the current strategic leadership of IT to be lacking, both at the DHB and the ministry level. The report also recommends the Health Management System Collaborative (HSMC) project, backed by seven DHBs, not go ahead as currently proposed.

Yesterday, speaking on TVNZ's Q&A programme ahead of the report's release, health minister Tony Ryall said duplicated systems and services needed to be consolidated in order to push more resources into front-line health.

The report recommends transferring the planning and funding of national services from District Health Boards (DHBs) and the Ministry of Health to a Crown health funding agency, provisionally called the National Health Board (NHB).

This includes shifting the monitoring of DHBs from the Ministry to the NHB, so the new entity has a complete view of health service planning and funding. This would bring together activities associated with "strategic planning and funding future capacity (IT, facilities and workforce) at the national level".

"We need to adopt a similar approach to other non-wage costs in back office areas that all DHBs have in common, in order to free up resources for front-line care," the report says later. "While the 21 DHBs are making some progress in collective management of some back office functions through regional shared service companies and national collaboration (via DHBNZ), this progress is slow and fragile."

In order to make progress, the 21 DHBs need to agree to act and any DHB can opt out of the arrangement, the report says.

"The proposed solution to this problem is the creation of a Pharmac-like national shared services organisation that can gradually take over responsibility for those common back office services that currently support DHB operations and that are referred to it by the minister."

The report says that to be effective, this shared services agency must have the mandate to act on behalf of DHBs.

"While it would be possible to bind DHBs contractually via an agency agreement to this national organisation, we see merit in establishing it as a Crown Entity with its own legislation.

"This organisation would assume responsibility for existing shared service arrangements (e.g. health payments) and obvious candidates for nationalisation (e.g. procurement and supply chain management) and, over time, be tasked with working through the entire range of common DHB back office services (e.g. payroll and finance systems)."

The report says that in the interim a National Health Board should assume the role and be charged with establishing appropriate subsidiaries for existing shared services and a process for working through the range of potential candidates.

"This new organisation would, along with some of the other changes suggested by the MRG, assume many of the current functions of DHBNZ whose ongoing role would need to be reviewed by the DHBs to determine what additional capacity they still required to work collectively at the national level.

An annex to the report addresses national IT planning and the Health Management System Collaborative (HMSC) project, which involves seven DHBs building a new shared health management system.

"The explosion of information and technology available within health has both positive and negative impacts," the report says.

Compared to most developed countries, New Zealand’s use of IT in healthcare is one of the highest in the world, especially by primary care providers, it notes.

"The next challenge is for information collected by these providers to be shared, communicated and made more easily accessible to other providers and patients. However, the sector is currently inundated with too much information and too many IT projects."

Each national health programme results in another database that is not easily linked to provide a patient or person-centred view.

The Health Information Strategy New Zealand (HISNZ) 2005 is a national strategy that recognises there is a need for sharing and transfer of information, the report says. However, it has a preference for a distributed approach using interoperability standards set by the Health Information Standards Organisation (HISO).

"A distributed approach aims to enable the different systems of different providers to share information and differs from a single enterprise sector-wide approach that requires all providers to use the same system. HISNZ is currently missing a national IT architecture that clearly shows how a distributed patient-centred electronic health information system works for consumers and providers."

"The current level of strategic leadership and governance of the information and technology agenda is inadequate and unlikely to significantly realise the potential of this enabler for the health sector."

The report criticises IT decisionmaking at the DHB and ministry level.

"In most health organisations this important responsibility is left to their Chief Information Officer and a few enthusiastic clinicians and managers. There is a tendency to ‘oversimplify‘ and look for IT solutions without getting the fundamentals right, like looking at standardising clinical process and assessing the readiness for changes in behaviour necessary to make new systems work effectively.

"The leadership roles of the Ministry of Health Information Directorate (ID) and the ministerial committee HISAC is not clear to the sector."

To get greater benefits from IT there needs to be:

• Clarity on who has a national strategic leadership role for national health IT strategy and planning;

• Confirmation on the preferred approach (interoperable and connected distributed systems or a single sector-wide enterprise system) and an architecture for a safe, shared and transferable patient electronic health record for the New Zealand health sector; and

• A higher level of ‘strategic leadership and ownership‘ from clinicians, managers and governors of IT projects. This call recognises the significant and integral part this information plays in determining how health services are delivered.

On prominent health IT projects, the report recommends parts of the Key Directions project be slimmed down or deferred. The project is for safe sharing of health information, to refresh Health Information Strategy and to develop an outline of a proposed investment pathway and to facilitate GP to GP Notes Transfer.

The National Systems Development Programme (NSDP), originally a four-year national programme ending in 30 June 2010 with a budget of $151.5 million, is one year behind schedule, the report says.

NSDP includes Connected Health, Recipient and Provider Identity, Health Statistics and Reporting, Health Payment Systems, Capitation Payments and Information, and Access and Integration.

The completion date for NSDP is now estimated to be 2011 rather 2010 but still within the original budget.

The remaining work for the six components needs to be reprioritised, says the report, to address the high risk identified in the Ministry of Health Risk Register with regards to national payments and contract system and other issues.

As to the HMSC, the report says the shared system proposal is "consistent with that of HISNZ and has generated great interest in the sector".

The ministerial review group says it has formed a view that HMSC is "synonymous with a single sector-wide enterprise solution".

"On 27 July 2009 the MRG received a revised strategic stage analysis from HMSC to clarify that this is not the intention of the initiative," the report notes. "Rather than a single sector-wide enterprise system, the MRG endorses the current HISNZ preference for an interoperable and connected distributed approach for the development of a safe sharing and transfer of patient electronic health information for the New Zealand health sector."

The scope of the HMSC project requires many health stakeholders, from primary care, pharmacies, rest homes, and NGOs, to agree to integrate or replace their current systems.

"Costs and timeframe estimates outlined in the Strategic Stage Analysis are very broad brush and need closer examining. For example if this initiative intends to fund replacement of stakeholder’s systems, then it will cost more and take longer. This is especially so if an overseas solution needs customisation for the New Zealand context, which would also add significant implementation risks."

While the review group recognises the importance of implementing the safe sharing and transfer of patient electronic health information and the HMSC steering group has pointed to strong participation and leadership of clinicians in the project, it notes that a decision for HMSC will have national implications and "encourages better discussion at a national level.

"We would, therefore, advise against proceeding with the current HMSC proposal and suggest it be refocused on replacing end-of-life hospital PASs (patient administration systems) with systems that meet HISO standards and allow easy sharing of electronic information with other providers."

The report further recommends the Ministry of Health's information directorate, with over 500 full-time staff, be reviewed and "focused solely to support the IT needs of the ministry".

It recommends the national payments and contracts management systems, with 272 staff, should be moved out of the ministry to the national shared service agency and that all other current responsibilities of the Ministry information directorate be transferred to the NHB.

A National Health IT Board should replace the current health information strategy group HISAC to provide strategic leadership and planning as well as governance over national collections and systems.

The National Health IT Board will work with the sector to develop a National IT Plan, including a national IT architecture framework, to advance the health information strategy.

"This plan will be a rolling plan with local, regional, and national views, and a short, intermediate, and long-term perspective that it is aligned with the National Health Workforce Plan and National Health Capital Plan," the report recommends.

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