Victorian Auditor-General slams HealthSmart implementation

The Victorian Auditor-General has released a devastating critique of the implementation of the HealthSmart clinical information system in Victorian public hospitals, finding that the project has run enormously over budget, has only been fully implemented in one health service and has drawbacks that potentially pose a threat to patient safety.

The Clinical ICT Systems in the Victorian Public Health Sector report, released this week by Auditor-General John Doyle, also severely criticises the capability of the Victorian Department of Health to handle the project, suggesting it may have given poor or incorrect advice to the government.

The report comes in the same week that the Ministerial Review of Victorian Health Sector ICT was released, which recommended greater devolution of decision making to health boards and that Victorian health organisations have a greater say in choosing and developing health IT systems.

The Auditor-General's report investigated eight Victorian public health services, four of which took part in the HealthSmart implementation.

HealthSmart involved the roll out of the Cerner clinical information system, an Oracle financial system and the iPM patient management system from CSC. It also included the introduction of InterSystems’ TrakCare as a community-based client management system.

The Auditor-General's report only looked at the Cerner implementation. CSC and InterSystems completed their installations successfully some time ago.

The HealthSmart project was established in 2003 with $323 million committed, part of which was allocated to the roll out of clinical ICT systems to 19 health services by 2007. That number was later reduced to 10.

However, the Auditor-General's report found that only Austin Health has fully implemented the clinical system. Eastern Health and Peninsula Health are part-way through their rollouts, and the Royal Victorian Eye and Ear Hospital has since abandoned its implementation.

In the Auditor-General's report, these four health services were investigated along with four non-HealthSmart sites: Alfred Health, Barwon Health, the Peter MacCallum Cancer Centre and the Royal Children’s Hospital.

Alfred Health also uses the Cerner system but it was not funded as part of the HealthSmart program. Barwon Health has used the BOSSnet clinical information system very successfully since 2001, while Peter Mac and RCH developed their own internal systems in the 1990s. RCH recently went out to tender for a new clinical information system.

Those implementations have all proved much less expensive than HealthSmart, and experience much broader clinician acceptance, the auditor found.

“I found that poor planning and inadequate understanding of the complex requirements of designing and implementing clinical ICT systems meant that the Department of Health has delivered the HealthSMART clinical ICT system to only four Victorian health services and at a cost of $145.3 million,” Mr Doyle said in his comments.

“Some clinical ICT systems have issues that potentially affect patient safety and need to be closely monitored and resolved by the department and relevant health services.

“Outside the HealthSMART program, other clinical ICT systems that have been incrementally developed with strong clinician engagement enjoy wide acceptance and support from end users. Although their functionality is not directly equivalent to the HealthSMART system, these other systems have involved significantly less capital and ongoing expenditure.

“At three of the health services we audited, we found evidence of clinical patient safety risks arising from the implementation of the HealthSMART clinical ICT system. While those hospitals have put manual workarounds in place to mitigate these risks, the relevant hospitals have themselves identified that these workarounds are not fail-safe and are prone to error.”

Mr Doyle was particularly critical of the fact that despite the Victorian Auditor-General's Office making recommendations for areas of improvement in a similar audit back in 2008, these recommendations “were not effectively actioned by the department”.

The report's findings include:

  • The Department of Health failed to complete the expected implementation of clinical ICT systems across 19 Victorian health services due to poor planning and an inadequate understanding of system requirements
  • It significantly underestimated project scope, costs and time lines, as well as the required clinical and other workflow redesign and change management efforts
  • The installed HealthSMART system is not well suited to the specialist needs of some hospitals
  • The introduction of electronic medication ordering and management has been the most difficult and complex component of the clinical ICT system program
  • At two of the HealthSMART sites these potential risks relate to a discontinuity of patient treatment information during a hospital stay, and confusion around the ordering and dispensing of complex prescriptions
  • Another HealthSMART site had an issue related to discharge summaries being completed prior to surgery or treatment, and system-printed prescriptions being hand-amended by clinicians with different medications
  • Non-HealthSMART sites have implemented clinical ICT systems at a fraction of the cost of implementing HealthSMART
  • The HealthSMART clinical ICT system cost $145.3 million, which is $87 million, or 150 per cent, more than the original approved budget of $58.3 million
  • This translates to an average installation cost of $36.3 million for each of the four HealthSMART sites
  • The average cost of installation of clinical ICT systems at non-HealthSmart sites is $1.8 million per site.
In terms of positives, it found that:

  • The clinical ICT system is now allowing clinicians within the same health service to simultaneously access electronic patient data, which is a major advantage over paper files
  • The system has also enabled the four HealthSMART sites to securely forward patient discharge summaries to general practitioners, with Barwon Health, a non-HealthSMART site, also having this functionality
  • The Australian Medication Terminology catalogue has been developed and is now available for other Australian health services to use in their clinical ICT system implementations.


The report found that despite the original procurement strategy in 2003 recommended setting up a panel of preferred products for each of the core HealthSmart components, including the clinical ICT system, in effect only one pre-qualified vendor for the clinical system was selected under the tender process.

“This meant that, in effect, only one clinical ICT system was selected for implementation by the Victorian public health sector with little regard for varied specialty workflow requirements in individual health services,” the report states.

“DH’s decision to shift from a panel of vendors approach to a ‘one size fits all’ procurement model has been heavily criticised by clinicians.

“DH is not able to definitively advise how much has been paid to the vendor against the approved contract cap. It also does not know how much the four HealthSMART health services have directly paid to the vendor.

“Further, DH is not aware of how much non-participating health services have spent on their own clinical ICT systems.”

It criticises the decision in 2006 to enforce a participating policy requiring health services to purchase the single ICT system.

This is problematic, the reports states, because the HealthSMART vendor product “is very expensive to purchase and maintain” and “continues to have significant ongoing issues as it has not yet been sufficiently refined to fit particular health services’ requirements”.

“Because the HealthSMART clinical ICT system footprint only includes limited components of the vendor’s solution, Austin Health, Peninsula Health and Eastern Health would need to allocate significant capital and operating budget to purchase more HealthSMART vendor products in the future.

“By taking this path, DH has in effect ‘locked-in’ the Victorian public health sector to the clinical ICT system products of only one vendor.”

This proved a particular problem for the Eye and Ear hospital, as the vendor's products are unable to meet its specialty requirements, the report states.

“Moreover, the HealthSMART clinical ICT system has had significant challenges in being effectively integrated or interfaced with existing clinical applications at health services.

“For example, the HealthSMART clinical ICT system is unable to address breaks in the data flow between the non-vendor emergency department and patient administration clinical ICT systems.

“This means that installed configurations of the HealthSMART clinical ICT system do not allow for emergent ‘best of breed’ clinical ICT systems to be appropriately integrated.”

Another example is the intended procurement by the Royal Children’s Hospital of a scanned medical records system.

RCH put out a tender in 2010 for a scanning system, but cancelled the tender shortly after selecting a preferred vendor and awarded the contract instead to the HealthSMART clinical ICT system vendor.

“When cancelling the tender, RCH informed prospective vendors that ‘as a result of the participation policy of the Department of Health and with due consideration for the overall architecture, RCH will be at risk of funding to provide a medical scanning software solution if it does not comply with the policy and proceed to appoint [the HealthSMART clinical ICT system vendor]’.

“The contract was consequently awarded to the HealthSMART clinical ICT system vendor whose product received the lowest score from the tender evaluation committee.

“This product was also the most expensive. RCH clinicians told the audit team that the purchased software was difficult and complex to use when all they wanted was a simple viewer of scanned patient records.”


The report also details what it calls ineffective vendor performance management, mirroring criticism by the Victorian Ombudsman in November 2011, which found that the secretary of the Department of Health had to personally intervene to attempt to fix the problem.

“In addition, the vendor’s standard medication catalogue is based on the United States of America’s model which is significantly different to an Australian medication catalogue.

“As a result, extensive work was required to develop the Australian Medicines Terminology (AMT) for the medication management component of the HealthSMART clinical ICT system to ensure that it would comply with Pharmaceutical Benefits Scheme rules.

“The HealthSMART clinical ICT system implementation approach did not capitalise on the vendor’s product being used at other sites within Australia. As a result, health services have been learning from their own mistakes rather than from the implementation experience of other health services.”

The report also slammed the inability of the system to do what the HealthSmart project was set up to do in the first place: allow clinicians to easily share patient data throughout the state.

“Patient data continues to exist in isolated islands among the four HealthSMART sites, among sites of the same health service, and even within departments at each site.

“A patient’s clinical information at a HealthSMART site cannot be seen by a clinician at another HealthSMART site. For the latter to obtain this information, the first hospital would need to print the data and either fax or post the hard copy to the other hospital.

“Sending the information via email is not possible as there is currently no secure messaging facility used between Victorian health services.”


The major patient safety issue the report has uncovered concerns the movement of a patient from one hospital department to another. In the system, the patient is considered to have been discharged once they leave a ward or department.

Subsequently, previously prescribed medication, pathology and radiology orders become inactive at the receiving ward.

“These orders then need to be re-prescribed and re-requested by a doctor in the receiving ward to be actionable by nurses. However, it could take a lengthy period of time before a medical officer is available for these tasks.

“Another consequence of this delay is that a patient’s required medication may be missed.”

There are also significant difficulties in using the system to manage complex prescriptions, the report finds, and that in addition to nurses and doctors being confused about these complex prescriptions, pharmacists are also finding it “tedious and time consuming” to verify orders.

Due to the “protracted amount of time” it takes to complete discharge summaries and discharge medication, senior doctors are ordering junior doctors and registrars to complete discharge summaries before the surgery or procedure is performed.

“Doctors at this health service also advised that they sometimes use their personal paper prescription pads so that they can avoid using the HealthSMART clinical ICT system to prescribe medication.”

The Auditor-General has recommended that the Department of Health conduct a comprehensive and standards-based assessment of clinical ICT system functionalities across the Victorian public health sector.

It has also recommended that the Department of Health and relevant HealthSMART sites urgently:

  • resolve the ‘encounter’, complex prescriptions, pre-prepared discharge summary and hand-amended prescription issues identified by this audit
  • address identified potential patient safety risks arising from clinical ICT system installations through software upgrades, configuration changes and the redesign of clinical treatment workflows, as appropriate, and
  • monitor and, as required, conduct root cause analysis of clinical incidents in health services which are attributable to these known issues.

A full copy of the report is available online and for download as a PDF at

Posted in Australian eHealth

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