By NEIL HARTNELL
Tribune Business Editor
A FURIOUS legal battle is brewing over an $18m Public Hospitals Authority (PHA) contract that a Cabinet minister admitted has “crashed” and delivered zero value for taxpayers and patients alike.
Dr Duane Sands, minister of health, told Tribune Business that the much-touted integrated healthcare management system (iHMS) deal that the former Progressive Liberal Party (PLP) administration signed in 2016 “to bring the public health system into the 21st century” had delivered none of the promised benefits and left taxpayers facing a multi-million dollar loss.
Describing the situation as “very, very sensitive”, he bluntly branded the contract agreed with Allscripts Healthcare Solutions, a US-based publicly-traded company, and its strategic partner, Infor Lawson, as “a bust” for the Bahamian people.
“We’ve had very big problems with that,” Dr Sands said in response to Tribune Business inquiries.
“As a matter of fact, it is likely going to be a matter that comes to legal action. Let’s just say that many years later, and many millions of dollars later, we have no functioning integrated healthcare management system.
“There was tremendous anticipation about the benefits that this process, this agreement would bring to the health system. Despite the millions of dollars invested we are still using a pretty much manual health records system, and there is very little tie-in with laboratory or imaging or pharmacy or any of the business billing information with any particular patient’s record, and so it’s been a bust.”
Multiple documents obtained by Tribune Business show the PHA has paid Allscripts/Infor Lawson around $6.35m to-date with nothing to show for the expenditure of public monies. They suggest Bahamian taxpayers have received no value for money on a contract that was intended to bring the public health system into the digital age while improving patient care quality and efficiencies.
The contract, which was bid over six years ago in mid-2013, was intended to totally transform healthcare delivery in The Bahamas through the use of electronic records that followed Bahamian patients wherever they went to access services. This would have given providers instant access to a person’s health history, enabling them to better and more quickly diagnose any cause of distress.
Papers seen by this newspaper suggest that the integrated healthcare management system project’s costs could now have ballooned from the contracted $18.389m to $30.852m over the deal’s 10-year duration, with some estimates even going as high as $48m, although Dr Sands declined to go into specifics.
“Suffice it to say that the roll-out of this project more than stalled; it’s crashed,” Dr Sands conceded to Tribune Business, “and the PHA has been attempting to find a way to manage its affairs because this was an essential component of modernisation.
“This would have brought the health system into the 21st century and allow us to function in a data-driven manner. It would also go a very long way to structure proper billing, revenue enhancement and clinical care. Having a patient’s records, a lot of the challenges - the current hassles, the delays with care now - could be avoided.
“It’s very disappointing, absolutely disappointing, and unravelling the reasons..... I’m sure you can surmise from my reticence that this issue is very, very sensitive. This is a very unfortunate situation, and as we dig deeper into this, who knows what we’re going to find.”
Dr Sands declined to comment further on the basis that legal action was imminent, but one source speaking to this newspaper on condition of anonymity was even blunter. They said: “We paid millions of dollars to these people [Allscripts/Infor Lawson] and basically have zilch. It’s frightening when you consider what it’s cost the taxpayers.”
The documents obtained by Tribune Business suggest there were problems from the get-go with the integrated healthcare management system contract, which was touted by Dr Sands’ predecessor as minister of health, Dr Perry Gomez, as a “red letter day” for healthcare in the Bahamas and a “giant leap forward” some five months after he signed it in August 2016.
The deadline for receiving bids was extended from September 5, 2013, to September 19, 2013, but papers seen by this newspaper query whether the Allscripts proposal was submitted on time given that it was stamped by the PHA’s tenders committee as being received on September 30 - 11 days after the formal closing.
Tribune Business understands that several members of the PHA Board appointed under the Minnis administration, as well as its management, have questioned whether the US company and its partner should have been awarded the contract in the first place given that the failure to meet the deadline seemingly disqualifies it under existing public procurement rules.
Then there were several u-turns over who should be awarded the contract involving the PHA’s tenders selection committee, the Christie administration-appointed Board headed by Frank Smith, and the former Cabinet itself.
The 17 bidders were ultimately reduced to just two - Allscripts and Advanced Integrated Solutions (AIS). The PHA’s selection committee, exactly two years after bids were first received, recommended that Allscripts be given the contract in a position paper dated September 29, 2015.
However, just eight days later, the PHA Board was advised that “additional technical discussions” had resulted in the committee “reversing the recommendation” and selecting AIS as the preferred bidder. The Board was then “invited to” approve AIS.
Subsequently, a draft memorandum crafted by Dr Gomez details another u-turn by the former Christie administration, with a recommendation that the Cabinet approve Allscripts as “vendor of choice” and that it instruct the PHA to negotiate and execute a binding contract with the company.
Explaining what occurred following the PHA Board and selection committee’s back-and-forth on the choice, Dr Gomez wrote that because of the contract’s “enormity and extensive impact on the public healthcare system” the Board had accepted management’s suggestion that an “independent evaluation” of the two final bids be conducted “to ensure that the health sector’s needs were being met”.
They turned to Sanigest Internacional, the same consultancy that devised the Christie administration’s National Health Insurance (NHI) scheme, which recommended that Santa Rose Consulting conduct the evaluation.
Dr Gomez’s memorandum refers to “the report from Santa Rose Consulting”, but e-mails seen by Tribune Business question how much of this was Santa Rose’s work as opposed to Sanigest.
William Leander, Santa Rose’s executive vice-president and chief strategy officer, wrote in a May 25, 2018, e-mail to the PHA that “the scope and focus of our work was directed by Sanigest. Santa Rose did not directly participate in the clinical and ERP (enterprise resource planning) software selection decision or the ensuing contracting process”.
Still, Dr Gomez’s Cabinet memorandum argued that Allscripts’ final price represented a 46.57 percent savings on its original proposal of $34.227m.
While optimism about the contract appeared to survive the change in administrations, the PHA’s former managing director bluntly warned senior Allscripts and Infor Lawson executives of his “grave concern” that the project was “at high risk” of failing to meet its timelines and budget in a letter written just four days after Dr Sands voiced expectations that the system would launch in summer 2018.
Herbert Brown, in a July 25, 2017, letter obtained by Tribune Business detailed multiple problems that included charging despite failing to deliver, over-selling, billing and charging discrepancies, overruns, missed timelines, and costs and services that Allscripts/Infor Lawson were trying to shift to the PHA regardless of their contractual obligations.
“As would have been indicated at contract signing (in August 2016), and as I would have reiterated on more than one occasion to you and/or relevant associates of your companies, the Government of The Bahamas is placing highest priority on the successful completion of these projects,” Dr Brown wrote.
“These contracts represent a considerable investment in modernising information management throughout our healthcare sector. The total cost for the Allscripts/Infor package for a 10-year contractual period is $18.389m (excluding VAT). We were, therefore, all charged to ensure that the Bahamian people are afforded value for this major investment.
“That said, I must express my grave concern that the two projects are at a high risk of not meeting the expected targets of timelines, scope and budget.....” Allscripts uses Infor Lawson as a third party vendor to provide elements it does not offer, such as general financials and supply chain management, and Mr Brown from mid-2017 was demanding better co-ordination between the two.
Calling for “an immediate review and reconfiguration”, he blasted the co-ordination between the two PHA vendors for “not meeting expectations at any acceptable level”. A similar verdict was delivered on their failure to produce a plan for integrating their systems almost a year after the contract was signed.
Dr Brown then queried Allscripts’ implementation billings of $1.126m, or 50 percent of the contract amount, with less than a year gone. He also asked whether the PHA had received all of the contractual license and hardware promised after paying the $3.1m full amount.
“Over $1m in monthly support has been billed as of June 2017 despite there being no system to support,” Dr Brown said, adding that there had been “great alarm” after the PHA found out that Allscripts did not provide certain IT functions it required.
Questioning whether the Allscripts solution had been scaled to account for growth in Bahamian patient numbers, the former PHA managing director said: “In response to our RFP, Allscripts along with its partner, Infor Lawson, presented its overall cost inclusive of software and hardware. Subsequently, the PHA was advised that the contract costs did not include servers for the Infor Lawson solution.
“Hence the PHA expended an additional $132,767 to purchase the servers. In agreeing to cover this unexpected and unbudgeted cost, I had indicated to Allscripts and Infor Lawson my complete displeasure in having the PHA placed in such a position due to this gap in the receipt of critical information required from our vendors.”
And, while Infor Lawson had informed the PHA that its implementation fees would total $550,000, it then used a third-party vendor, AVAAP, to perform this task. While Infor Lawson failed to manage its contractor, Dr Brown said: “Additionally, as of July 18, 2017, AVAAP has advised the PHA that an additional $935,865 will be needed to complete the implementation.
“In essence, the current estimates indicate that consulting hours for Infor’s implementation will be almost three times’ the contracted cost.” Describing AVAAP’s numbers as “excessive”, Mr Brown added that the reasons it gave for delays “are erroneous” and added: “Such cost overruns are alarming, and a detailed explanation/justification is required......
“To date the PHA has been billed over $261,000 for AVAAP consultant hours (AVAAP claims billings should amount to $373,792). Only after repeated requests, the PHA finally received, on July 20, 2017, some explanations/justifications for hours worked.
“The PHA had indicated that they will not pay these invoices until the aforementioned are provided. And even prior to either Infor or AVAAP providing the requested information, they had indicated that all project work will be halted until payment is made. The PHA is always eager to settle its bills. However, we have a legal and fiduciary responsibility to ensure all payments are duly justified.”
Mr Brown concluded his letter by expressing concern that AVAA had again revealed the need to hire more third-party vendors to complete the project “at additional unbudgeted sums”.
Other PHA documents indicate how critical the integrated healthcare management system project was to improving the financial viability of the Princess Margaret Hospital (PMH), Rand Memorial Hospital and other facilities by replacing “the archaic” 33-year-old “mission critical systems” it is currently using.
“There is an urgent need to focus on the PMH’s inability to currently issue integrated patient bills, obtain electronic reimbursements for individuals with private health insurance or government-run health plans, bill for radiology services or charge the credit cards of the 11,000-plus tourists who require” medical services,” a PHA position paper updated on April 27, 2019, states.
It adds that the loss of revenues due to PMH patients being treated before they are registered “would be eliminated by a fully-integrated health information system”, thus saving the public healthcare system a multi-million dollar sum that could be reinvested in improving patient care quality and healthcare infrastructure.
“Absence of a fully-integrated health information means that currently the only systems that are interfaced are inpatient drugs and laboratories,” the PHA position paper revealed.
The documents seen by Tribune Business also reveal that Bahamian taxpayers are further exposed to the “crashed” contract by the CIBC FirstCaribbean loan, with figures ranging from $8m to $13m, that financed it as this was guaranteed by the Government.