Published on the 12/09/2024 | Written by Heather Wright
Aging health payroll systems win Hira funding…
Health NZ is redirecting more than $25 million in funding from the Hira programme to replacing aging payroll systems, which have been deemed a ‘risk’.
Ministers have approved the drawdown of $25.1 million of unused contingency funding for Hira, to be redirected to support the remediation and stabilisation of immediate payroll system risks.
“Stabilising payroll systems has emerged as a risk that will require immediate investment.”
Around 20 payroll systems, including some which were out of support, were among the systems Health NZ inherited when it came into being, taking over from former district health boards and agencies.
A cabinet paper on improving the financial performance of Health NZ from earlier this year noted the issue of fragmented IT, including payroll.
“Stabilising payroll systems has emerged as a risk that will require immediate investment. Investment may be required to address payroll systems that will reach end of life within the next 18 months,” according to government documents.
Tranche one of the Hira program, an ecosystem of data and digital services designed to provide better access to health information, ended on 30 June.
Health NZ says key building blocks for future digital health services have been put in place, including a digital services hub for digital health IT developers.
Funding for future tranches hasn’t been committed, with the May Budget recalling more than $330 million planned for data and digital health initiatives over the next five years, including the tranche two funding for Hira.
The Budget Summary of Initiatives noted funding would be returned pending work to prepare ‘investment-ready business cases for future investment’.
“Health NZ is currently considering which aspects of the Hira Program might continue in the future,” the organisation says.
Health Minister Shane Reti indicated concerns over an ‘unclear’ implementation pathway for Hira was a factor in the redirection of the funding, which he says is not an indication of a lack of government support for data and digital in health.
The program, which began in 2021, has delivered an interoperability platform, including the connector plane to provide secure access to health information, and a Digital Services Hub. An event management service was also developed, the first release of which enables services to be notified when someone has died.
Access to information in the consumer My Health Record site has been enabled by the interoperability put in place by Hira, Health NZ says, and API security standards and development standards were developed as part of tranche one work.
The payroll work is part of a $116 million program of work around health sector agreements and payments (HSAAP). HSAAP aims to transform the agreements and payments environment, which is responsible for 120 million transactions and $12 billion funding annually.
The ROI for the program, released in 2021, noted that the system relies on three core solutions developed between 1998 and 2001, which aren’t able to accommodate anticipated changes.
Health NZ says early actions to stabalise the payroll systems have now been completed.
Three main components of the replacement system are now in place with $425 million in annual transactions being processed through the system. It’s expected to be completed in early 2025, with all services transitioned over by the end of 2030.
Health NZ recently implemented a hiring freeze and is offering voluntary redundancies across digital and data.
Lester Levy was appointed as commissioner of Health NZ earlier this year, replacing the board.
He is charged with finding savings of $1.4 billion and has previously said that the organisation needs more focus and discipline and warned of painful reform ahead.
