National health IT strategy gets a rethink

District Health Boards are formally coordinating their IT activities

New Zealand is reinventing health computing in a better way, says New Zealand Health Information Services group manager Mike Rillstone.

After putting in place new processes and governance, NZHIS has refreshed its health computing strategy and expects to release in October a Health Information Strategy document that will set broad, high-level expectations of what New Zealand is capable of over the next five years.

Rillstone was head-hunted three years ago from Australia as chief adviser on IT in health, following the Wave Report, which was put together by the health sector to identify barriers and technologies to take the sector forward. One of the recommendations was the appointment of an advisor. He recently moved to his present position and expects to name a new chief advisor shortly.

Rillstone says one of the important messages was that the emphasis on care was moving from hospitals to general practitioners, exemplified by 50,000 GP visits per day, compared with around 7000 hospital admissions.

“Much of the available information was around hospitals, so it was time to start balancing the statistics around the information,” he says.

“Community information is unstructured, and IT is really good at unstructured information.

“We needed to get things based around good policy, and linked to things that needed to happen and to things that were happening.”

He says the Ministry of Health hasn’t previously provided much IT guideance. “We had to kick off with something to get things moving.”

One of the first projects was to develop a national practitioner index. The contract, which is at the negotiation and scoping stage, has been let to Orion Systems.

There was also a need to develop frameworks because “no one holds one piece of string to make it happen”.

Now, the 21 district health boards are coordinating their IT activities in a formal way. Expenditure is transparent so it can be looked at in terms of criteria, and the sector has a roll in helping govern the processes.

“We’ve put in place business case frameworks,” Rillstone says. “Where the DHBs make a significant investment — over $500,000 — they are required to follow a methodology that asks them to talk to their neighbours and the clinicians, then look at other instances in New Zealand where the problem might have been solved.”

Four regional capital committees have been established to review all purchases — not just IT — on a regional basis.

But the regional situation is confused and confusing. In the north, Auckland has decided to opt out of the Health Alliance, which comprises Counties Manakau and Waitemata. Northland has chosen not to join the alliance but has a document out indicating that it wants to buy alliance services on an ASP basis.

Midland, which is based on Waikato, has a standout in Taranaki, which is linked into Wellington’s Capital and Coast joint venture, the Health Intelligence Network.

In the South Island, Canterbury stands alone, while Otago, Southland and the West Coast have formed the Southern Alliance. The Ministry of Health has indicated it wants one South Island regional grouping.

Canterbury, however, has held discussions with the five other South Island DHBs to gauge their interest in linking to a single-supplier telecommunications contract, to lower costs overall. Canterbury will go to tender in October.

Clearly, the DHB lines of demarcation and the relationships regionally are not well established. Rather, they are evolving.

While each DHB has a capital improvement budget that includes IT, purchases over a certain level have to be signed off.

Sitting over the regional structure is a national capital committee, made up of DHB CEOs, the chairs of the boards, and the Ministry of Health. It makes recommendations to the Director-General of Health for signoff, or, if the purchase is over $3 million, to the Minister of Health.

“We’ve decided to go in favour of process rather than dictating technology,” Rillstone says. “The DHBs must invest with a horizontal model in mind.”

The new process was introduced in July, so it will probably be around a year before it can be adequately measured.

One of the questions NZHIS addressed was that of multiple brands for things like patient management systems.

“The reason we don’t support one system is that every DHB is at a different stage of development,” Rillstone says.

“DHB use of IT ranges in sophistication. Making a single decision on software is incredibly difficult. You either have to buy very over-spec’d or under-spec'd.

“To get one system infers a national, centralised procurement process, and that would drag clinical decisions away from what they are designed for.”

NZHIS looked at what was done in Australia and the UK and found that the vendors’ write-off period of software ranged from three through seven to nine years.

Rillstone says one of the issues with healthcare is that problems are solved quite differently, so there is a question of how to hardwire medical practice into IT.

“The majority of innovative IT work is done by local clinicians, GPs and hospital groups. Management of innovation is mostly highlighted in DHB information strategies.

“IT must be recognised as a powerful enabler.”

He says the vendors can now produce product tailored to what the sector needs and that can be supported in terms of an export environment. Examples he gives are Orion Systems and Medtech selling into Australia.

Locally, the core patient administration software market is dominated by two vendors, iSoft and IBA. UK-based iSoft entered the New Zealand market in January by purchasing i-Health and its sister company the Galen Group. It has applied to the Commerce Commission for approval to take over five sites — Midcentral Health, Good Health Wanganui, Nelson Marlborough Health, Canterbury Health and Healthcare Otago — from Hewlett-Packard, which has signaled its intention to exit the software market and concentrate on hardware and infrastructure.

Two of the DHBs, Auckland and South Canterbury, have homegrown patient administration systems, while Waikato — which has gone to RFP for replacement — is currently served by Fujitsu. There are a number of smaller suppliers.

There are a lot of niche market players in other areas of health software. The dominant ones appear to be HAS Solutions, in theatre management; Sysmex Delphic, in laboratory systems; Comrad, in radiology; Medtech, in the GP market; and EPI in pharmacy.

This, of course, raises issues of integration. There are, as yet, few or no standards in health IT, although the Health Information Standards Authority was set up a year ago to work with NZHIS. It has representatives from DHBs, general practitioners and pharmacists, but not from the private health industry.

These standards will come over time as the Ministry of Health looks to rationalise IT systems.

ISoft’s application to the Commerce Commission to acquire the Hewlett-Packard sites is significant and, if approved, will position the company strongly for the future. In its application, iSoft estimates the likely market share in three ways: by hospital, by customer and by bed.

When iSoft numbers are aggregated to include iSoft Australia sites in New Zealand, the Hewlett-Packard sites, Galen sites (iSoft bought Galen to enter New Zealand) and HAS sites (iSoft group merged overseas with Torex, which owns HAS), its market share will be: by hospital 42.4% compared to closest competitor IBA's 12.3%; by customer 34.8%, compared to IBA's 14%; and by bed 52.7%, against IBA's 15.8%.

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Tags healthdistrict health boards

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