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Government & policy

New Brunswick now auditing eHealth contracts

FREDERICTON, N.B. – New Brunswick’s auditor general, Kim MacPherson (pictured), is carrying out a probe of e-health contracts that were awarded as part of a $45 million plan to create a provincial system of electronic health records. MacPherson started the review of some 300 contracts about a month ago.

In May, Health Minister Madeleine Dube said an internal audit by the provincial Office of the Comptroller showed that 15 of the e-health contracts put in place by the previous Liberal government had uncovered cost overruns and contract extensions without proper practices.

She said given the problems, all the remaining contracts would be examined to see if anything else had gone wrong.

MacPherson was the province’s comptroller at the time and found the discrepancies in the 15 contracts. She said the latest review would take more time, probably months, though she couldn't say when her team would complete its work.

Dube changed her mind about hiring an outside consultant – something that would likely have been costly – after officials in the Department of Health had contacted the auditor general. Over the summer, they had a series of discussions that led to MacPherson taking on the review.

E-health contracts have been controversial across Canada, particularly in Ontario, where a scandal over procurement in 2009 led to the resignations of the head of eHealth Ontario and the provincial minister of health.

British Columbia and Quebec have also had problems with their efforts to create province-wide systems of electronic records.

Dube has stressed the New Brunswick e-health program is important, but she wants to crack down on improper procedures.

According to a report in The Daily Gleaner, the auditor general said a review was overdue anyway. “Auditor generals in a number of other provinces have also reported in recent years on their work in this area,” MacPherson said.

“That work had not been done here in New Brunswick. And there’s many millions of dollars being spent in this area, so it made sense for us to do it, as well.” She characterized her office as small, with a professional group of experienced people.

“We will get the job done and do it well,” she said.

In MacPherson’s report as comptroller, released in the spring, the names of the companies involved in the questionable cost overruns and procurements were redacted. Only the problems were outlined.

One contract – a purchase order – was signed in January 2007, with approval for nine months and a cost of $24,000. The audit found the contract was extended and rose to $463,000.

In another case, relating to Medicare billing, the original contract of $3.1 million rose to $6.9 million after a number of “change requests” were made and approved.

The comptroller said health officials “should have been more aggressive in holding accountable to their original estimates.”

On the issue of conflict of interest, the audit discovered that contractors acting as project managers were able to review information from their competitors, “potentially putting the contracted project manager in an advantageous position in submitting future proposals.”

Posted October 6, 2011