Up to $50m more for Fiona Stanley hospital IT



news The Western Australian State Government has been forced to admit that the IT systems associated with the new Fiona Stanley Hospital being built in the state had blown out in cost by an amount expected to be between $25 million and $50 million, as delays continue to affect the opening of the new flagship facility.

Fiona Stanley is a new, 783 bed hospital being build south of the Perth central business district. It is billed as a flagship hospital for Western Australia, and was originally planned to be a paperless facility, featuring the latest in medical and information technology. However, the project has gone off the rails. In June last year Health Minister Kim Hames issued a statement noting that the $2 billion project had run late and would open in October 2014 instead of April, although it was more than 90 percent complete.

One specific issue which continues to dog the facility’s construction includes the “advanced ICT system” which contractor Serco is putting in place at the facility. The platform is billed as being able to deliver new levels of patient care and convenience by managing administration, patient information, medical records, communications and patient entertainment, all through one central facility. Serco is handling the rollout and part of the IT systems deployment, while British telco BT is conducting the telecommunications rollout. The Department of Health itself also has substantial responsibility for some IT systems.

In a tense session in mid-February (first reported by iTNews), the State Parliament’s Education and Health Standing Committee grilled current under-treasurer Timothy Marney on the delays and cost blowouts.

Marney confirmed that the $2 billion project as a whole had already suffered some $330 million in cost overruns, with about $151 million of that sum being allocated to ICT, including a portion going to another facility in Albany. Marney said that the project was currently “still in the throes of trying to finalise 48 separate [IT] systems”, so it was difficult to estimate what the remaining ICT over-runs might be on Fiona Stanley specifically.

“I suspect the exposure is anywhere between $25 million and $50 million,” he said. “If things go really well, it will be $25 million.”

Marney said a previous task force which had been formed by the government several years ago with the purpose of looking at what was required to get Fiona Stanley operational had examined the ICT issue. “One of our key concerns at the time was that Serco’s ability to deliver on its contractual requirements were critically dependent on Health delivering the ICT platform for the hospital, and my concern was that the track record for Health delivering on ICT projects was extremely poor,” he said. “Put the two together, that meant we were going to be up for some form of compensation to Serco because we could not give them the ICT platform that the contract promised them.”

Marney said in a general sense, Serco’s responsibilities with respect to the setup of the systems were largely around “flows of clinicians, security — the actual functioning of the building as opposed to [electronic] patient records”. “But there may be some electronic patient record elements that Serco are involved in,” he said.

The issues with the setup of the IT systems may also have a potential impact on other facilities, given that it appears that Fiona Stanley was intended to act as a reference site for IT systems at other facilities.

Marney told the committee: “The decision of cabinet, when it allocated the additional funds for ICT for Fiona Stanley and Albany, explicitly prioritised the systems investment for those two sites to ensure that they could open; therefore, if you like, deprioritising the rest of the system. Albeit there was substantial investment and that is a whole-of-system platform, and a number of the Fiona Stanley systems are also repeatable across other sites. In terms of Perth Children’s Hospital, the approach taken to ICT for Perth Children’s Hospital is taking into consideration the lessons learnt with respect to Fiona Stanley Hospital.”

“It means the strategy for the construction and deployment and training of systems in Perth Children’s Hospital is significantly different to that employed with Fiona Stanley Hospital in that the approach will be to seek to source an off-the-shelf product that can be easily adapted to the new children’s hospital rather than constructing 48 systems from scratch.”

The news comes as other major eHealth programs around Australia have also suffered major problems in recent years. For example,University of Western Australia software academic David Glance has severely criticised the Federal Government’s personally controlled electronic health records scheme, stating the vast majority of those who have signed up have blank health records, despite the project’s half-billion-dollar cost. The project is currently under review.

Queensland Health’s eHealth project is significantly delayed, and in October last year the Victorian Government published a landmark review into the use of technology in the state’s health ecosystem, finding that its landmark HealthSMART program launched in 2004 had had its benefits, but that the state should devolve most decisions about IT back to individual health units such as hospitals and stop taking a strongly centralised approach to eHealth.

I suspect anyone reading this article would have looked up from their computer screen in horror at Marney’s revelation that the Western Australian Government sought to construct “48 systems from scratch” when setting up the IT systems for the Fiona Stanley Hospital. Deploying off the shelf software should have been the assumed default position in this scenario, instead of seeking a customised solution. I would not personally be shocked if it takes another five years for Fiona Stanley’s IT systems to be bedded down, and I suspect most of the systems will not be deployed in other facilities.

Australia’s ongoing e-health disaster zone continues to roll on, and on, and on, in every state, and in the Federal Government. How many billions of dollars does Australia need to throw at this situation before we realise the situation is not working?


  1. “How many billions of dollars does Australia need to throw at this situation before we realise the situation is not working”

    Well, that’s easy to say, but what would you do differently? Perhaps it’s better to waste that same amount of money in small disparate projects that continue the mess indefinitely? Perhaps it’s better just to accept that it’s too hard to digitise health, and continue squandering large amounts of money in poor workflows? Perhaps it would be better just not to treat patients?

    The inadequacies of the current approach are obvious to everyone. What would be useful is some accountability for hubris on the part of *anyone* who claims there’s an easy way (including the current way).

  2. why is it our collective governments (feds, state and local) can not negotiate a contract. This case plus crap which is going on in eastern state plus you inability to negotiate free trade agreements at the federal level which work in our favour at tax payers.

    Once can only but think there is kick back happening here or government employs in-compliment contract negotiation people

    • The answer is simple, it’s because the companies they deal with have become experts not so much in providing the services, but in creating and manipulating the contracts for those services.

      They will pay far more to their lawyers than to their technical specialists as the legal side is indirectly the biggest provider of revenue.

      When people claim that private enterprise is more efficient they are correct; just they leave out that that efficiency is wholly devoted to extracting profit for themselves.

  3. Having worked for many years with two of the largest public health agencies in the English speaking world, I see one of the reasons for not following the logical, sensible approach of deploying of the shelf software as the fractal accumulation of special little snowflakes.

    [state/nation] Health consists of X districts, plus that other, special facility.
    A district consists of Y hospitals, and that other, special one.
    A hospital consists of Z departments, and that other, special one.
    A department consists of X teams, and that other, special one.

    It’s special snowflakes all the way down.

    Sadly, Fiona Stanley probably will be a reference site for future hospitals. They’ll implement future sites following the Fiona Stanley model: start from scratch with a diverse portfolio of software, and significant cost over-runs.

    • I also work in the IT department of large region health service, the reason why there is mess at the moment is the outsourced software products. Not one of them integrates with anything else, the licensing costs are prohibitive and then the data is usually boxed up in a data structure that is nearly impossible to migrate to a new system with out massive vendor support costs.

      There is a tendency for each tender process to be looked at in isolation, instead of looking at the compatibility/integration with exiting systems.

      Most of these problems are rooted in the faulty tender processes, because most of the time there in no end user engagement and very little planing for future expansion, migration or decommissioning.

      Of course one of the biggest factors is the truly random/fluctuating way all these projects are financed by the government.

      There is a lot more I could say, like actual examples of these issues, but then it would be obvious whom I work for.

  4. I use to also work in such environments – I no longer do. But the day I realised that it wasn’t meant to work – well not for the citizen, patient or system perspective but rather it does work from the point of view of the supplier of management consultants and the technology – primarily the global brand names it all made sense – and I got out.

  5. AJT> Of course one of the biggest factors is the truly random/fluctuating way all these projects are financed by the government.

    In my experience, this is the biggest factor. The funding causes any number of challenges:

    The special snowflakes Bob points out each receive their own funding and can buy their own IT as a result. Who is going to stop a medical research center from buying its own IT with its own money? Even if the research center is located right inside a major hospital?

    Funding is on a cash basis so the full life cycle costs are insufficiently baked in.

    Political risk is all over the health sector. A change in state or federal government can easily halt or start funding for major projects.

    Second-order benefits like improved information handling will typically lose a business case that is pitted against another business case for a “machine that goes bing”.

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