Government & policy

eHealth Ontario CEO, Sarah Kramer, is terminated

TORONTO – Ontario Health Minister David Caplan announced the firing of Sarah Kramer (pictured), CEO of eHealth Ontario on June 7. The government was under pressure from opposition politicians to take action after the CBC and daily newspapers publicized questionable practices at eHealth Ontario – including untendered contracts to consulting firms and large bonuses and fees.

Caplan said in a government news release: “I am acting immediately upon [the eHealth board’s] request to revoke Sarah Kramer’s appointment as eHealth Ontario President and Chief Executive Officer. Ron Sapsford, Deputy Minister of Health and Long Term Care, will serve as acting President and Chief Executive Officer of eHealth Ontario until an interim President and CEO can quickly be appointed.

“This decision is an important step to restore public confidence in the
agency and its mandate of modernizing our healthcare system.”

Sarah Kramer was hired as CEO last fall, when eHealth Ontario was formed to spearhead the development of electronic health record systems across the province. Said to be a priority for the provincial government, eHealth Ontario has been given a budget of $2.1 billion for the next three years.

The agency was established through the merger of the e-health program at the Ministry of Health and Long-term Care and Smart Systems for Health Agency (SSHA).

But under Sarah Kramer, previously a vice president and CIO at Cancer Care Ontario, eHealth awarded nearly $5 million in contracts to consulting agencies without issuing tenders.

Kramer defended her organization’s procurement policy, saying the need to demonstrate quick results justified single-sourcing the contracts in many cases.

Examples of contracts handed out during the first months of eHealth’s operation were $915,160 to healthcare consulting firm Courtyard Group, and two contracts in a single day to Accenture Inc. that topped $1 million.

Large salaries and bonuses also rankled the public and opposition politicians. Documents show Kramer was earning a base salary of $380,000 and received a $114,000 bonus in March, about five months after her start date. The next month, Kramer announced in a memo that the company was cutting back on employee bonuses.

“After considerable discussion, we have decided to proceed with merit and bonus payouts, but scale them back to reflect current economic realities and the organization’s performance this past year,” the memo states.

Kramer’s own bonus had come under intense scrutiny, with critics asking why such a large amount would be given after such a short a time on the job.

The eHealth CEO told reporters the bonus was to be paid by her previous employer, Cancer Care Ontario, but that eHealth Ontario agreed to pay it instead, as Kramer was hired on short notice. However, Terry Sullivan, the CEO of Cancer Care Ontario went on the record as saying no executives at the organization would be paid such a high bonus.

Senior executives at Cancer Care Ontario, a Crown agency, are eligible for bonuses worth a maximum of 15 percent of their salary, Sullivan said. And the 15 percent maximum is a policy eHealth also adheres to, said agency spokeswoman Deanna Allen. Based on Kramer’s $380,000 salary, that would’ve amounted to $57,000.

Ontario Auditor General Jim McCarter has been probing spending at eHealth and its predecessor, SSHA, since late last year. His findings are scheduled to be published in his annual report this December. Health Minister David Caplan has asked McCarter to speed up the review after facing a barrage of questions in the legislature.

Interim PC Leader Bob Runciman called for the health minister to explain the apparent lack of competitive bidding for the projects and called the expenses upsetting given the economic downturn.

Spending at eHealth and its predecessor swelled to more than $800 million in the past six years, while the date for release of its electronic patient health records has been pushed back three years to 2015.

SSHA was blasted in January 2007 when an operational review done by Deloitte Consulting said it lacked a strategic plan, had a poor reputation among the healthcare community it was supposed to serve and was not being held accountable by Queen’s Park.

Set up in 2002, SSHA also struggled to move away from a dependence on consultants. A 2004-2005 annual report documents “intense” efforts to reduce reliance on consultants by doubling permanent staff.

Media reports suggest SSHA spent about an average of 17 per cent of its budget each year on consultants.

Also, two of eHealth’s consultants – Allaudin Merali and Donna Strating – are listed as senior vice-presidents on the agency’s website but live in Alberta, with their regular commute into Ontario funded by taxpayer dollars. Documents show each charges about $2,700 a day for their services. The two also bill the agency for regular flights, accommodation in Toronto plus a per diem for meals and other costs.

The total cost for the two amounts to about $1.5 million a year. EHealth’s CEO defended the costs of flying two consultants in, saying Alberta has the “best record in eHealth in the country.”

“They’ve come in and really helped us get back on board and start moving forward. So we’re paying market rates for people who are the best and the brightest in the business,” Kramer said.