The Chopping Block: 1. Canada Health Infoway

NationalPost.com – Financial Post/FPComment – EHealth plan cost billions, delivers dubious benefits
Sep 28, 2011. Last Updated: Sep 29, 2011.   Terence Corcoran

Canada Health Infoway was born in 2001 out of an idea that has deep intuitive appeal: Wouldn’t it be nice if the health records of all of us, every Canadian, could be stored electronically in one place? Imagine the possibilities: A prescription flows electronically to a pharmacist, the information assembled with other health data — lab work, previous health problems, surgical procedures — making it possible for the patient — and health professionals — to have a full and complete record of his or her medical history.

Infoway was the vehicle created by Ottawa and the provinces to spearhead the creation of such a national electronic health system. In the dreams of bureaucrats and politicians, the objective was to electronically hook something like 400,000 health care professionals, pharmacists and doctors, more than 700 hospitals, thousands of private clinics, and 33 million Canadians into one big national interoperable system.

It remains impossible to determine how much money has been spent to fulfil this dream. Canada Health Infoway alone has allocated more than $2-billion in federal money over the last decade (see graph above). Provinces have spent billions more, often on problem-plagued failures. Nobody has attempted yet to tally up all the costs. Even less obvious are the benefits.

Health Infoway has in the past suggested a total of $10-billion to $12-billion might be needed. But that number is clearly a gross underestimate. The spending is said to be worth it, because the benefits are measured in the billions annually. But such benefits are generally based on fanciful number-crunching by hired consultants who’s brief is to generate a rationale for the spending.

Recent developments in Canada and abroad suggest it is time Ottawa launched a strategic review of Health Infoway and of the centralized top-down planning model that has so far orchestrated massive spending with little to show for it.

Last week the National Health Service in the United Kingdom announced a dismantling of its national ehealth computer project. After spending £6.4-billion ($10.3-billion) the NHS scrapped what had been the world’s largest single civilian computer system. The decision came after a review by a House of Commons public health committee found that while the effort was worthy, the money had been wasted. “The department has been unable to demonstrate what benefits have been delivered.”

Private contractors, including big-name consultants such as Accenture, walked away from contracts. Delivery promises were broken, systems failed, and objectives were not met. The Commons report said: “The government recognizes the weaknesses of a top-down, centrally imposed IT system.”

No such doubts appear to exist in Canada, despite similar failures recorded in British Columbia and Ontario. So far, the push to plug every Canadian and every health-care provider and service into a national ehealth system remains more or less in place, despite evidence that the costs are real, but the benefits may be notional products of economic number-crunching exercises.

Health Infoway is the product of earlier economic analyses that appeared to show that spending $10-billion on a national system would have produced $6-billion in annual benefits. These numbers were then multiplied over decades to create the impression of a benefits bonanza. A typical claim from the early advocacy reports included an estimate of a reduction in unnecessary radiology tests of $3.6-billion over 20 years and $48.3-billion saved over 20 years by reducing the frequency of adverse drug events.

Such economic claims continue to be made and continue to draw criticism. Earlier this month, a Canadian Medical Association Journal (CMAJ) new story cited doubts about Health Infoway’s claims that electronic prescribing by doctors would produce major cost benefits.

Health Infoway said a drug information system was a core component of a comprehensive pan-Canadian electronic health record. Citing a consultant’s report, it said a drug system “will generate approximately $1-billion a year in benefits.” Critics said evidence for such benefits is suspect. CMAJ said there is weak or no evidence that e-prescribing, as it is called, does any of the things it is said to do, such as reducing errors, increasing efficiency and lowering the risk of inappropriate drug dispensing.

As for the $1-billion figure, it comes from Deloitte, hired by Infoway — its usual practice — to produce benefit numbers. In a typical calculation, Deloitte concludes that productivity gains — due to reduced telephone calls, less printing costs, fewer problems with handwritten prescriptions — would generate $158-million in annual savings among Canada’s 20,544 pharmacists, assuming each gets annual compensation of $100,000 and assuming a 9.1% increase in productivity.

Such projects are simply not credible, as many experts have observed. One of the experts is Robert Coambs. His now-dated 1995 study on the dollar benefits of ehealth was used by Deloitte as one of the documents supporting its claims. Mr. Coambs told me: “Deloitte estimated that a good patient-level database would increase medication compliance by at least 10%. Ten percent of $7-billion to $9-billion is a lot of money, so they reasoned that Health Infoway will be cost-effective.”

Mr. Coambs said the $7-billion to $9-billion is his estimate from the 1990s. “I’m happy to have my work cited. But I’m also concerned that they need much more due diligence. I don’t believe they have proven that Health Infoway will be cost-effective, and is the most cost-effective solution, and they need to prove their case very well.”

But this is the way Health Infoway operates. It is spending billions, and encouraging billions more in spending by the provinces and others, all on the premise that the spending will deliver benefits that are many multiples of the spending. Until the federal government conducts a proper and objective public review of the Infoway objective of establishing a massive pan-Canadian megaproject, the basis for a boondoggle continue to unfold.

On The Chopping Block:  A review of Canada Health Infoway promises  savings are in the billions, federally and provincially.

< http://opinion.financialpost.com/2011/09/28/the-chopping-block-1-canada-health-infoway/ >

Leave a Reply

Your email address will not be published. Required fields are marked *