Canadian Health IT Scandal a Cautionary Tale for U.S.

by George Lauer, iHealthBeat Features Editor


This is a cautionary tale. A scandal involving health IT in Canada has resulted in the departure of two top executives of a provincial government agency and caused some to call for the resignation of the country's minister of health.

Although Canada's national health system differs significantly from the fragmented U.S. system, both countries are involved in a similar effort to expand and improve the use of health IT.

In Ontario, generally regarded as behind most of the rest of Canada in the adoption and use of health IT, a newly organized agency -- eHealth Ontario -- was mired this month in controversy over contract approvals and expense accounts.

The chair of the organization's board resigned last week -- about a week after the CEO was forced out.

Chair Alan Hudson and CEO Sarah Kramer were under fire for the way they handed out about $5 million Canadian, or about $4.4 million, in health IT contracts and for hiring consultants who earned about $2,400 a day and still billed taxpayers for snacks.

Ontario's auditor general is investigating eHealth Ontario's contracting and expense procedures. A report is expected in September.

In the meantime, health industry leaders and observers on both sides of the border agree there are lessons to be learned from the debacle. The timely lessons may be especially important as the U.S. gears up for national health IT expansion fueled by more than $19 billion in stimulus funding.

Public-Private Issues, Need for Speed

Industry observers said the problems in Ontario were largely the result of private business practices carried hastily into the public realm. 

Bernard Courtois -- president and CEO of the Information Technology Association of Canada, a trade group representing health IT vendors -- said the public-private issues are international.

"The main lesson is -- and it will be the same across the world -- is to prepare for the different kinds of pressures in public service. Everybody's trying to get things done quickly, develop strategies make decisions and get money out the door," Courtois said.

He added, "In the private sector, doing all that earns you a certain reputation, but in the public sector, you have a more cumbersome process -- more transparent, more procedural -- for acquiring services, for spending money. If you move too quickly or sidestep procedures, that kind of thing can cause a bit of a backlash."

Courtois said the Ontario problems illustrate the importance of methodically following processes, even if they slow you down.

Dave Garets -- president and CEO of HIMSS Analytics and executive vice president of the Healthcare Information and Management Systems Society -- said U.S. industry and government officials would be wise to heed lessons from the north before embarking on a long, expensive campaign to spread health IT.

"There needs to be rigor in how applications are made for the money, and there needs to be careful due diligence to make sure the health care organizations that receive it are deserving and that all accounting and procedural steps are followed," Garets said, adding, "This is going to be a big, widespread operation with lots of moving parts."

Political Savvy an Important Ingredient

Anton Hart -- publisher and CEO of Longwoods Publishing Corporation in Toronto, which publishes Canadian and international health care journals -- said political savvy is an important component in public projects such as designing and building a health IT system.

"I think people would agree at the beginning that the organization -- eHealth Ontario -- had a pretty good team. The chair was a physician, Alan Hudson, [a] very experienced individual who understands the rules of governance very well. He certainly had everyone's respect," Hart said.

But the rest of the team and its marching orders may have been too hastily assembled, Hart said.

"You need to have political smartness as well as business experience, and, in retrospect, I'm not sure that was the case," Hart said, adding, "Even Hudson now admits they moved too fast."

"The individual they hired as CEO had a proven track record as a CIO, but not as a CEO in a very public situation," Hart said. "She went in with a reputation of getting projects done but she did not have a reputation or much experience with large budgets, lots of visibility and lots of people wanting a piece of the pie."

Hart said, "Experience dealing with those kinds of pressures can make a big difference."

'Much To Be Learned' From Canada

Garets said the Ontario problems represent singular -- not systemic -- faults.

"I really do see this as a one-off event resulting from a few mistakes by individuals. I don't think it has anything to do with the health IT system in Canada, which I consider a model for the rest of the world," Garets said, adding, "There's much the United States and other countries can learn from how Canada is approaching health IT."

"I think what happened in Ontario is some individuals got carried away and moved too quickly without following procedure. That could have happened in any field -- manufacturing or any other field," Garets said.

Overall, the Canadian effort to spread health IT has been fairly effective, according to Garets.

"They've done some really cool things up there both from a national perspective and a regional perspective," Garets said. "Their system is much different from ours and in some ways that makes it easier to develop and use health IT, but the way they've gone about it could be a model for the rest of the world," Garets said.

Canada's health ministry created regional health authorities with some level of autonomous authority "and those have developed into essentially big, integrated delivery systems that have authority for buying health IT for all hospitals within that authority," Garets said.

"And they've done a really good job of sharing information so that not everybody has to experiment," Garets said, adding, "Unlike what happens in the United States, they're learning from each other and that, more than anything else should be a model for everyone else."

Garets pointed to Canada Health Infoway, the system's central Internet site, as a particularly effective tool. "That alone provides lots of lessons to be learned," Garets said.

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