The real problems at eHealth
It’s being called “the billion dollar boondoggle,” the attempt by the Ontario government to create an electronic health record for everyone in the province. The idea is to harness computers and the Internet to improve patient care, safety, and access to medical services.
So far, it’s not going very well. eHealth Ontario has been roiled by controversy over millions of dollars in untendered contracts that went to past associates or close contacts of its president and chairman. Both are gone, resigned or fired. And the Minister of Health, David Caplan, has had to resign.
eHealth represents the second abortive attempt by Ontario to bring its Ministry of Health, OHIP, and the province’s doctors and hospitals into the electronic age.
“Smart Systems for Health” was launched with great fanfare in 2002. It was going to “revolutionize health care delivery with an electronic health information sharing network.”
It failed to deliver on its promise and was replaced by eHealth. Today, nearly a thousand people work for eHealth at seven locations.
According to its web site, work is going ahead. One example: tenders are now out to establish a Diabetes Registry.
Other priorities are online management of prescription medications and a program to reduce wait times in hospital emergency rooms.
In all the fuss, there’s been virtually no light shed on the real problems at eHealth: what actually has or has not been achieved to date. The media have been singularly uninterested in examining the operations of this agency. I’ve not seen a single example of investigative journalism applied to the problems of eHealth.
These problems have been easy pickings for the Opposition parties. They don’t seem interested in getting a real reading on the agency’s work. They prefer to concentrate on the scandal over untendered contracts, rather than on what work’s been done under those contracts.
Now, they’ve got an even juicier target: the $25 billion deficit disclosed by Finance Minister Dwight Duncan in his economic update.
The Deputy Minister of Health, Ron Sapsford, was equally unforthcoming on eHealth’s operations when he appeared before the Legislature committee that’s investigating what’s gone wrong at the agency.
His main message was that none of it was his fault – the eHealth bosses had ignored his warnings about following “proper procedures” in awarding contracts.
It would be helpful if someone in authority could explain exactly where eHealth stands in fulfilling its goals.
Here’s a tip: Around half of all technology projects fail and have to be abandoned. It costs corporations and governments hundreds of millions of dollars every year.
This is the “dirty little secret” of the technology industry that no one talks about.
In the U.S., the Computer Audit association says half of the executives they surveyed report their companies have “killed” a technology project because it didn’t deliver as promised, or the company’s needs have changed.
In Britain, a survey of call centers by the Customer Experience Foundation showed that overruns and delays usually add 90 per cent to the cost of a project. New systems fail fifty per cent of the time.
“The expectation of frequent failure was epidemic,” the CEF says.
There’s no defense for untendered contracts in public business. But a contract scandal shouldn’t be allowed to cover up more serious problems of non-delivery.
That’s the real explanation that eHealth owes us.
It is my guess that the bulk of the work for eHealth has been outsourced.
This brings up two closely related questions, both critical to successful deployment of outsourced services:
1. Did eHealth follow and or use the advise of a qualified 3rd Party advisor to design the outsources contract – I don’t mean the RFP which is a standard procurement process usually more suited to purchasing commodities such as Supplies and equipment?
2. If the above is true what is the current gap analysis between the Service Level Agreements (SLA’s) and reality?
There are many good suppliers of outsourcing services and the focus is mainly Information Technology (IT), Human Resources (HR), Finance and Accounting (F&A) and Customer Service (Call Centers).
Our experience in outsourcing has been as a “third party advisor”. Companies hire third party advisors in outsourcing for two reasons:
1.) To identify the field of suppliers that are considered the best fit for the opportunity and take the client (the buyer of outsourcing services) through a very detailed selection process. This process leads to a final bid or RFP element which is most concerned about pricing.
2.) To mitigate deals that in some stage of failure.
In scenario #1 above the client incurs the third party advisor fees and in scenario #2 sometimes the fee is split between the buyer and supplier.
Deals fail for all kinds of reasons but a three really standout:
1.) The process that was being outsourced was not clearly identified. In IT outsourcing deals for example often time work is being done by people in shadow organizations (meaning they are doing IT type work but are not actually in It’s budget) If you pull out only IT and don’t identify the shadow organizations the outsourcer cannot fully service the organization because they were not made aware of this work and did not account for it in their pricing model. And the pissing contest begins.
2.) Poorly defined service levels are another reason deals fail. Every deal must have solid, achievable service levels. This is how you hold the supplier accountable. There are very often financial penalties for not achieving these (SLA’s) Service Level Agreements.
3.) Poor Governance models are put in place after the deal is signed. The Governance model is the organizational structure in both the supplier and buyer that must put into place to manage the deal into the future. Many buyer’s have a “fire and forget” mentally. That thinking will really get organizations in deep trouble.
To propose an answer my own questions, I am guessing that most of the above apply. Perhaps the next step should be an analysis and the retention of “yet another” 3rd party advisor to get eHealth properly on track.