A nearly $1 billion project to deploy a single digital patient record (SDPR) in NSW is at risk of cost overruns, with system integration costs likely underestimated in the business case, the NSW Audit Office has said.
The office yesterday released a report [pdf] which found the business case for the SDPR was “inaccurate”.
The SDPR is seen as a way for healthcare teams to quickly access real-time patient data across the state, simplifying a system that had previously comprised of nine electronic medical record systems, six patient administration systems and five pathology laboratory information systems statewide.
It is underpinned by software from US healthcare provider Epic Systems, under a contract worth $969 million. It was originally signed for more than $1 billion in late 2023.
Specifically, the auditor said the business case for the SDPR “did not capture all relevant project costs”.
It also said that estimated operating costs were not backed by “sufficient or reliable evidence”.
“The business case did not consider the estimated cost of integrating the SDPR system with legacy systems that will remain in use,” the auditor said.
“This integration process is crucial for the successful implementation of the SDPR system and early indicators suggest that these integration costs will be significant.”
The auditor said that without supported or approved cost estimates, the project was vulnerable to cost overruns and mistakes.
NSW Health included an estimate for implementation-related expenses for local health districts and in-scope health entities in its business case for the project.
However, the auditor said that this estimate wasn’t supported by strong documentation as there was a lack of cost information available at the time the business case was written.
The audit office said that this could mean project costs are understated.
NSW Health SDRP Implementation Authority (SDPRIA) chief executive Teresa Anderson said the pandemic played a part in the cost calculation variations.
“The initial business case was developed in 2021 amidst the Covid pandemic, with a lean
business case completed in 2023 under markedly different economic conditions,” she said to iTnews in a statement.
“Since then, global supply chain disruption and rising operational costs have increased the cost of
delivering programs of this nature.
“Despite the challenges, the SDPR Implementation Authority remains committed to delivering value for NSW Health.”
She added that the authority “has put in place tight financial governance to oversee the program, including all procurement and implementation of integration of systems to the SDPR.”
In the works since 2019
The SDPR project has been on the roadmap for a number of years.
After first exploring the idea of digitised health records in 2019, NSW Health went to market with a tender for a statewide single digital health record in 2020.
The business case for the SDPR was first developed in 2021.
In late 2022, Epic Systems was tapped to build out the SDPR.
In 2024, an authority under the Health Administration Corporation was formed to oversee the deployment of the system, according to the audit office’s report.
In February of the same year, NSW Health began hiring tech talent to rollout the SDPR.
The Australian Journal of Pharmacy reported this month that training is currently underway for 200 health employees on the system.
The audit office said it will conduct a full review into the “efficiency and effectiveness of the procurement, governance and project management of the SDPR project” in the 2026-2027 financial year.
NSW Health said it expected the SDPR to be fully complete in 2028, covering more than 220 public hospitals, 150 pathology collection centres, 65 laboratories and 600 community health centres.