A massive project to digitize Australia's Queensland public hospitals, which includes implementing a new Cerner EMR, is on track to run $256 million over budget, a 42 percent increase from the original cost estimate, according to an audit report reviewed by ABC News Online.
Queensland Health awarded Cerner a $600 million, five-year contract for an integrated EMR. Cerner has completed similar rollouts at hospitals in nearby New South Wales and Victoria.The Queensland government's goal is to digitize 27 public hospitals by 2020, with the total cost of the program estimated to be $1.2 billion, according to the 2017-18 state budget.
However, the recent audit found "the department underestimated some of the cost elements of implementing the [EMR] in its 2016 [EMR] business case," ABC News Online reports.
Specifically, at the Queensland hospitals, the project is not providing "value for money" and "is now at a crucial junction because it cannot complete implementation in the remaining 12 hospitals without more funding," according to the audit.
The audit also noted that member hospitals were providing insufficient financial information, and Australia's health department did not have proper software to record project costs. Moreover, the audit argues that the department had limited negotiating power with Cerner.
"The department appears to have limited leverage when negotiating with the vendor, when contract extension options are due," the report says, according to ABC News Online. "This is because the vendor has the benefit of knowing that the department has not sought, and shows no indication of seeking, alternative [EMR] options. Therefore, there is no competitive tension placed on the vendor. As a result, the department cannot demonstrate that it continues to obtain the best price with the vendor to ensure the state is getting best value for money from the current arrangement."
There was no evidence Cerner overcharged for its services during the contract period, ABC News Online reports.