The HealthTap buy was largely driven by ex-chief Nigel Murray and former chairman Bob Simcock. Photo / Christine Cornege
The HealthTap buy was largely driven by ex-chief Nigel Murray and former chairman Bob Simcock. Photo / Christine Cornege
The Deputy Auditor-General is to launch an investigation into the Waikato District Health Board's $15 million purchase of digital services from an American company to run a high-tech booking system.
Greg Schollum said auditors raised concerns on the deal two years ago.
The purchase of services from US-based company HealthTap was largely driven by former board chief executive Dr Nigel Murray and former chairman Bob Simcock.
Both men resigned after an inquiry into Murray's irregular expenses, which totalled $218,000 over three years.
The State Services Commission, which is investigating Murray's spending, asked the Auditor-General to investigate the purchase, signed off by the board in July 2015.
• any other related matters that the Deputy Auditor-General considers it desirable to report on.
The DHB's interim chief executive, Derek Wright, welcomed the inquiry.
"Audit NZ had already identified that there were some issues with our procurement process for our online health service from HealthTap so we welcome this review and will give them any assistance they require. It's important that we learn lessons from how we did things in the past."
Acting DHB chairwoman Sally Webb said the board was already doing its own review of the HealthTap service, after a two-year trial, to determine if it is the right product for the DHB's virtual health strategy.
Auditors said the procurement raised several concerns, including:
• It should have been conducted through an open tendering process and a US$10m ($14.3m) trial was over any threshold for open tendering;
• The business case was written for a virtual care solution and not specifically for the purchase of HealthTap;
• DHB staff planned to report value for money at the end of the trial [in May next year] but auditors believe the board cannot demonstrate that;
• There did not appear to be much inquiry as to what else was available;
• A two-year trial with a single provider could now cause issues of fairness with any proposed tendering and future procurement.
There were also concerns by auditors over how potential conflicts of interest had been handled.
The Waikato DHB had kept the cost of HealthTap, which together with the cost to launch SmartHealth totalled $18.8m, a closely guarded secret, citing commercial sensitivity and contract negotiations as reasons.
The Office of the Auditor-General said it could not comment further while the inquiry was under way.
It expected to publish a report once the inquiry was complete.
The SSC investigation is due early in the New Year and the Serious Fraud Office continues to make preliminary inquiries into the case.
Cloud over Murray's Canada role
Nigel Murray, the hospital boss embroiled in an expenses scandal, was once in charge of a health authority in Canada where 84 patients died in two years from infection.
Murray was head of Fraser Health when the deaths from the bacteria Clostridium difficile occurred between 2009 and mid-2011 at Burnaby General Hospital.
At the time a letter from eight senior doctors outlined their concerns over the deaths, according to a February 2012 report in the Vancouver Sun.
Rates of the infection were between two to three times the national average, the letter said.
When Murray became CEO at Waikato District Health Board in July 2014 a review of Fraser Health Authority found it was the worst-performing in Canada.
When the Burnaby deaths at Burnaby Hospital came to light in 2012 Murray hired a senior medical director to help reduce rates of infection, but not before an external review found Fraser Health's regional infection-control programme did not meet modern staffing recommendations.
Murray resigned from Waikato DHB in October after an investigation found he spent $218,000 of taxpayer money in three years largely on travel for work, with some of the expenses unjustified or unauthorised.
