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Health NZ spent $72m+ on IT spend amid mass IT staff cuts and delayed projects

Health NZ IT news
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Health New Zealand (HNZ) has come under scrutiny for spending $72 million on contractors and consultants for a single IT project while planning to eliminate over 1,000 IT staff positions in a bid to save $13 million annually.

A single recruiter, Robert Walters, received $17 million over two years for the troubled Health Sector Agreements and Payments Programme (HSAAP), which has faced delays, cost overruns, and limited functionality.

While HNZ defended its reliance on contractors due to internal expertise gaps, critics argue the strategy exacerbates deficits and undermines innovative projects, including the Tuhi AI app, a promising mental health assessment tool developed for just $100,000 but now at risk due to staffing cuts.

The HSAAP project, initially budgeted at $116 million, has ballooned to $140 million and remains only 4% operational.

At the same time, contractors’ contracts are being extended in multiple districts to prevent project collapses, raising concerns over resource dependency.

The cuts to IT teams have sparked fears among clinicians about jeopardising initiatives like Tuhi, which could double patient assessments.

While HNZ assures more permanent hires next year, unions and experts criticise the decision to downsize amid significant operational challenges, warning it could undermine both efficiency and innovation in the country’s healthcare system.

Image credit: Getty Images

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3 COMMENTS

  1. They, govt, are heavily reliant on expensive software and licenses from big name mainstream suppliers. They could switch to free alternatives in many instances, greatly reducing costs.Just look at the adoption of open source Linux, as a desktop replacement in many European and Asian nations. This would have a flow on effect of extending the life of ageing hardware, too. given a lot of this software runs lighter and is not as dependent on newer hardware.

    As far as recruitment goes they could take a similar approach to other small nations, like Malta, who offer several years of tax breaks to skilled workers coming into the country to live and work. Easing the path to PR and citizenship could be enhanced too. Not to mention reducing study costs for medical students.

    Of course, this requires government that is actually focused on the needs of their own people first and that as far as I can see, is simply not the case. Too busy bowing down to three letter foreign organisations and businesses.

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