E-health record bill 'up to $150m'

The cost of an electronic health record system to store New Zealanders' medical data looks likely to fall between $50 million and $150m.

Argument has flared up again over the merits of the great leap forward for health sector technology.

Bennett Medary, managing director of The Simpl Group, says the cost estimate is based on responses from 30 suppliers to a request for information issued late last year. The Simpl Group is managing the procurement process on behalf of the Health Management System Collaborative (HMSC).

Mr Medary dismisses as "scaremongering" a suggestion by Orion Health, New Zealand's largest software exporter, that the bill for a system could be as high as NZ$100m to US$300m (NZ$459m).

HMSC, comprising seven district health boards, plans to issue a tender for the system next year. It could lead to a single electronic health record for each New Zealander that all health providers and each patient could access.

Mr Medary says such a system has the potential to save the health sector hundreds of millions of dollars a year. "The heath sector spends $6b to $7b a year. What we are talking about [spending] is 0.25 per cent of that. This could easily be self-funding."

But Orion Health chief executive Ian McCrae says the investment may not provide value for money and doubts it will be the "big leap forward we are all looking for".

The DHBs appear "pretty keen on getting a big American product in here" and New Zealand already has had a couple of cracks at importing American health IT systems, he says. "SMS was one of those which went into Capital and Coast Health and Health Waikato. It didn't go so well."

Mr McCrae says hospitals have invested very little in health technology over the past few years and feel as though they haven't made much progress. But he advises a "middle path" whereby DHBs would maintain a summary record of patient data at a regional level.

In that space, Orion is "hugely competent, and we would beat just about any vendor out there, as evidenced by deals we have won in Europe, Australia and Canada".

That would be instead of a full-blown electronic medical records system that would record all the "nitty-gritty pieces of information" gathered during treatments. Mr McCrae says most of these use "old technology" and would require that each hospital maintained its own subset of data.

"Instead of going from zero to $200m of investment, I am sure New Zealand could get some good solutions for quite a lot less. If they are New Zealand-supplied solutions, we can take that intellectual property and can sell it to the rest of the world."

The New Zealand Health IT Cluster, which represents locally owned health technology firms, expressed similar reservations about "large US-based suppliers of monolithic solutions" in February.

It said there had been "little or no public debate about what would be the most significant change in health IT strategy seen in New Zealand for at least a generation".

DHB chief executives would not comment, explaining there was a procurement process under way.

But Phil Brimacombe, chief information officer at Counties Manukau and Waitemata district health boards, says the World Health Organisation has endorsed the vision of electronic health records that patients, GPs and clinicians could access. "My understanding is that is very similar to the vision of the HMSC."

Mr Medary says New Zealand technology companies should not feel threatened by the possibility "some giant overseas business will come in and claim the market".

While some members of the HMSC might prefer "more holistic" imported software that spanned primary and secondary healthcare, if Kiwi suppliers clubbed together the opportunity might not be lost to them.

"I would encourage them to spend less time lobbying to protect their interests, and more time working together to come up with solutions that will allow the New Zealand health sector to achieve the transformation that is critical for its sustainability."

The HMSC will brief companies that responded to its request for information in the next few days.