Report: Ontario EHR initiative rife with waste, questionable spending
Ontario’s decade-long EHR initiative is in the middle of an ongoing scandal that has resulted in the resignation this week of the province’s health minister and the subsequent release of a special report from the Office of the Auditor General of Ontario blasting the initiative’s spending practices.
The 52-page report by Auditor General Jim McCarter was commissioned last June in the wake of reports that eHealth Ontario—the formal name of the agency overseeing the EHR initiative—had issued millions of dollars in untendered contracts to consultants. The controversy led to the resignation of eHealth Ontario’s CEO and the chair of the board of directors.
McCarter’s report went well beyond the question of procurement practices and put considerable focus on whether the CAD 1 billion ($950 million, U.S.) spent on the EHR initiative was providing Ontario with a bang for its bucks.
The auditor determined that the province has clearly not been getting its money’s worth.
According to McCarter, about $800 million ($760 million) of that $1 billion has been used to build and operate a private IT network and to connect the medical community to that network. But, wrote McCarter, “[t]he value of this investment, at least to date, has not been realized.”
All Canadian provinces, per an agreement in 2000 among Canada’s federal and provincial ministers of health, are in the process of establishing EHR systems. The goal of the federal government is that 50 percent of Canadians will have an EHR by 2010, and 100 percent by 2016.
Despite these goals, “there is no doubt that Ontario does not yet have an eHealth system that is meeting the needs of medical practitioners or the public,” McCarter wrote. “Ontario is near the back of the pack compared to most other provinces.”
Although operational issues are part of the problem, the auditor general reported, his major concern is that while a lot of money has been spent building and operating a private IT network, it is being underutilized.
“Because of shortcomings in upfront strategic planning, the clinical information that medical practitioners need for decision making is not available,” he wrote. “With few vehicles capable of travelling on the highway and few goods to deliver, it is not surprising that, notwithstanding the approximately $72 million ($68.4 million) in direct operating costs annually being spent to keep the highway up and running and the $800 million incurred . . . to date, there has been little traffic on it.”
Less than 1 percent of the network’s system capacity is being utilized, despite that $72 million in annual operating costs, McCarter reported.
McCarter also wrote that progress on EHR projects have been slow or delayed, and have “for the most part not met expectations.” Too often, McCarter said in the report, the resources necessary to complete projects—as well as the strategy for procuring those resources—were inefficiently identified on an ad hoc basis.
Projects have not been managed cost-effectively, either, McCarter pointed out. For example, $2.5 million ($2.38 million) per month is being spent on the ehealth network to maintain circuits that are either inactive, almost inactive, or underutilized.
McCarter also slammed eHealth Ontario’s use and procurement of consultants. He confirmed allegations that the bulk of contracts awarded to consultants and vendors were sole-sourced and that the agency “showed favoritism in awarding some of these contracts.”
The auditor said that eHealth Ontario CEO Sarah Kramer’s prior relationships with vendors and consultants were factors in her hiring decisions, and rejected eHealth’s explanation that the need for the work was so urgent that there was no time for competitive bidding. For example, McCarter pointed out that an external recruiting firm was retained by Kramer, on a sole-source basis, for $1 million ($950,000), to hire 15 senior management positions.
“There was no reason why this contract could not have been competitively tendered,” wrote McCarter. “The eHealth Ontario agency paid most of these fees up front. We noted that only five of the 15 positions were filled when the contract was terminated—yet no money had been requested by or returned to the eHealth Ontario agency.”
The controversy has “damaged the reputation of the eHealth Ontario agency,” McCarter concluded. “The agency is now faced with regaining the support and trust of clients and other stakeholders. It must also repair the morale of staff, who have lived through extended periods of uncertainty during which the agency’s governance and senior management structure has frequently changed. Improved procedures and policies must be formulated and adhered to.”
The 52-page report by Auditor General Jim McCarter was commissioned last June in the wake of reports that eHealth Ontario—the formal name of the agency overseeing the EHR initiative—had issued millions of dollars in untendered contracts to consultants. The controversy led to the resignation of eHealth Ontario’s CEO and the chair of the board of directors.
McCarter’s report went well beyond the question of procurement practices and put considerable focus on whether the CAD 1 billion ($950 million, U.S.) spent on the EHR initiative was providing Ontario with a bang for its bucks.
The auditor determined that the province has clearly not been getting its money’s worth.
According to McCarter, about $800 million ($760 million) of that $1 billion has been used to build and operate a private IT network and to connect the medical community to that network. But, wrote McCarter, “[t]he value of this investment, at least to date, has not been realized.”
All Canadian provinces, per an agreement in 2000 among Canada’s federal and provincial ministers of health, are in the process of establishing EHR systems. The goal of the federal government is that 50 percent of Canadians will have an EHR by 2010, and 100 percent by 2016.
Despite these goals, “there is no doubt that Ontario does not yet have an eHealth system that is meeting the needs of medical practitioners or the public,” McCarter wrote. “Ontario is near the back of the pack compared to most other provinces.”
Although operational issues are part of the problem, the auditor general reported, his major concern is that while a lot of money has been spent building and operating a private IT network, it is being underutilized.
“Because of shortcomings in upfront strategic planning, the clinical information that medical practitioners need for decision making is not available,” he wrote. “With few vehicles capable of travelling on the highway and few goods to deliver, it is not surprising that, notwithstanding the approximately $72 million ($68.4 million) in direct operating costs annually being spent to keep the highway up and running and the $800 million incurred . . . to date, there has been little traffic on it.”
Less than 1 percent of the network’s system capacity is being utilized, despite that $72 million in annual operating costs, McCarter reported.
McCarter also wrote that progress on EHR projects have been slow or delayed, and have “for the most part not met expectations.” Too often, McCarter said in the report, the resources necessary to complete projects—as well as the strategy for procuring those resources—were inefficiently identified on an ad hoc basis.
Projects have not been managed cost-effectively, either, McCarter pointed out. For example, $2.5 million ($2.38 million) per month is being spent on the ehealth network to maintain circuits that are either inactive, almost inactive, or underutilized.
McCarter also slammed eHealth Ontario’s use and procurement of consultants. He confirmed allegations that the bulk of contracts awarded to consultants and vendors were sole-sourced and that the agency “showed favoritism in awarding some of these contracts.”
The auditor said that eHealth Ontario CEO Sarah Kramer’s prior relationships with vendors and consultants were factors in her hiring decisions, and rejected eHealth’s explanation that the need for the work was so urgent that there was no time for competitive bidding. For example, McCarter pointed out that an external recruiting firm was retained by Kramer, on a sole-source basis, for $1 million ($950,000), to hire 15 senior management positions.
“There was no reason why this contract could not have been competitively tendered,” wrote McCarter. “The eHealth Ontario agency paid most of these fees up front. We noted that only five of the 15 positions were filled when the contract was terminated—yet no money had been requested by or returned to the eHealth Ontario agency.”
The controversy has “damaged the reputation of the eHealth Ontario agency,” McCarter concluded. “The agency is now faced with regaining the support and trust of clients and other stakeholders. It must also repair the morale of staff, who have lived through extended periods of uncertainty during which the agency’s governance and senior management structure has frequently changed. Improved procedures and policies must be formulated and adhered to.”