Troubled HealthSMART System Finally Cancelled in Victoria Australia

The Victorian state government finally decided last week to throw in the towel on the nearly decade-long implementation of its HealthSMART e-health record system project after recognizing that the "e" actually stood for an "extravagance" it could no longer afford.

In 2003, Australia’s Victorian government embarked on an ambitious modernization of the state’s health IT infrastructure. The idea was to combine its health-related financial systems with its patient record management systems through the creation of a comprehensive, Victoria-wide electronic health record (EHR) system. The original HealthSMART project budget was $A323 million and a completion date was set for June 2007. However, by the end of 2007, while some 57% of the money had been spent, only 24% of the project had been completed. Projected costs to complete had risen to $A427 million, and a roll out date was estimated to be sometime in late 2009. There was talk at the time of cancelling the project, but the government decided to keep the effort alive given what it believed to be its significant potential benefits.

By late 2010, questions were again being raised, especially by the newly elected Baillieu government about whether HealthSMART should indeed be cancelled. The completion date had now slipped to sometime late in 2012, and the project costs were still rising, with at least another $A100 million being seen as needed to finish the job. The government decided, after lobbying by the Australian Medical Association Victoria and others, that it was in a “In for a penny, in for a pound” type of situation, so it held its collective nose, and soldiered on.

However, by early this year it became increasingly apparent that the end of the EHR effort was still not in sight, even though $A566 million had now been spent on it. So last week, the Victorian government decided it was no longer going to “throw good money after bad,” ZDNet Australia reported. It scrapped the project, but announced a new plan to set aside $A100 million to help individual hospitals improve their health IT. Health Minister David Davis was quoted in the ZDNet story as saying that:

“In those hospitals where it has been put in place or partially put in place, health services will make their decisions from that position, but going forward, beyond that, health services will be able to examine what is appropriate for their particular service.”

Shades of what happened in the UK with its national EHR program.

That said, at the national level, the Australian government is still continuing its support of the controversial personally controlled electronic health records (PCEHR) system, which is supposed to begin its roll out across Australia this July. Prime MInister Gillard's government has recently even allocated $A233 million in this year’s budget (on top of the original appropriation of $A466 million) to bolster the effort's probability of success.

At the same time, the government has also been trying to dampen down expectations about the PCEHR system, saying that it will take years before it will actually be useful. But the government predicts that the changes it will make in the way medical data is handled will eventually save Australia $A15 billion in government-related health costs by 2030. Given the current state of the PCEHR system and the lukewarm support of it by the Australian populace and medical profession, that amount sounds more like political wishful thinking that an estimate grounded in economic reality.