Capital Coast CHE's new chief targets $50m overspending

Capital Coast Health's new chief executive, Leo Mercer, is pinning his hopes of bringing the crown health enterprise's financial blowout under control through the use of information technology.

Capital Coast Health’s new chief executive, Leo Mercer, is pinning his hopes of bringing the crown health enterprise’s financial blowout under control through the use of information technology.

This month the CHE revealed that its budget blowout had reached $50 million and that some jobs could go as a result.

Mercer, a somewhat controversial appointee from Texas, is a medical doctor. He’s also well versed in using the software chosen to revamp the CHE’s systems, from US company SMS, which is the biggest health-care information system vendor in the world, with 1996 revenues of $US767 million.

“It’s quick and it’s stable,” he says.

The major problem the CHE seems to have is that it does not know what its deliverables cost. It’s a problem that extends to the regional health authority. Both parties are guessing when it comes to costing services, so when the CHE goes to the RHA for funding, they’re not necessarily talking the same language.

Mercer hopes the SMS system will enable Capital Coast Health to get a detailed fix on its costs so it can argue its case with some certainty.

“The reality is that the demand for health-care services will go up,” he says. “It’s also a reality that there will continue to be financial restraints, so it is imperative to develop systems within resources that will remain the same or increase only slowly.

“Understanding costs is the root problem in health care. There is now much more swapping of information with regional health authorities.”

Capital Coast Health has entered into a $22 million contract with SMS to provide modules of its Allegra system, for which Digital is providing the hardware. It has a separate contract with EDS for out-sourcing and facilities-managing existing equipment.

The project is in four phases.

Phase one is the initial implementation of a patient registration system, followed by a clinical repository, radiology, scheduling and patient accounting. It will roll out from July this year through to February 1998.

Phase two includes introducing Windows-based clinical workstations, scheduling, a laboratory system and pharmacy system. Rollout will begin this year, overlapping phase one, and ending in September 1998.

Phases three and four, which include health-care guidelines, an executive information system, document and medical imaging, will begin late in 1998, for completion by June 1999.

According to Mercer, financial benefits will begin to show up in 1998, and much more strongly over the next two years.

SMS is establishing an office on site at Wellington Hospital to provide the skilled resources for the project. As the various modules are rolled out, it will bring in the appropriately skilled personnel from offshore. Most of the information services infrastructure is being provided by EDS.

SMS spokesperson Deb Dickson says SMS is very interested in doing business in New Zealand beyond Capital Coast Health but the focus is on making that project successful.

“We’re talking to other CHEs and will then put together a business plan to determine where we go from there.”

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