Primary Health Networks consistently using large amounts of government money to try to become tech providers — rather than analysers and commissioners of local health services — wasn’t specifically addressed in the BCG review, but it should have been.
Before we get going on today’s rant it’s probably important to say these things up front:
- PHNs are a good idea and they do good things – they are going to be a vital part of system transformation to actually having a prevention focus, if we can get them right;
- The vast majority of people working in PHNs are committed and work hard with the full intent of achieving good things – and some do;
- The BCG PHN review was an articulate assessment of the key problems with PHNs and how we might go about fixing them. Notably, PHNs themselves weren’t actually identified as the major problem.
The BCG PHN review found that PHN effectiveness is being constrained by inconsistent capability across PHNs (no alignment of skillsets or pooling of capability), unclear governance and accountability (DoHDA’s fault), and funding and performance frameworks that limit strategic delivery (again, see DoHDA).
In essence, BCG identified the Department of Health, Disability and Ageing’s management framework for PHNs as the main problem – at least to start with – not the people running the PHNs themselves.
By the way, what consultant do you know these days who gets commissioned to review an element of a system being run by a government department and concludes that the main problem isn’t so much the system element you’ve been asked to review but the government department who paid you to review them?
More of that please.
But if the BCG findings came as a relief to some PHN managers, they should be thinking a bit harder about what is actually going on..
You don’t have to read between the lines too much to realise that, badly governed or not, PHN leadership often exposes itself as making some very bad individual choices about what they do with their funding.
You suspect that if the government can sort out its not insignificant problems with governance, measurement and inconsistency in capability, then it can’t be too long before a few PHN bosses might end up getting the chop.
The BCG review is fairly kind about what you suspect they must have recognised in their review, them being management consultants and all: why have some individual PHN managers been making demonstrably poor management calls.
If the government does what BCG recommends they do, the fault lines in managerial capability and performance at the PHN level itself should become very obvious, if they aren’t already.
Buried inside the report is a line – a subset of the “unclear governance and accountability” line – that hints strongly at the issue being referenced here.
The line says that PHNs are often distracted by “diversifying into other operations or lines of business”.
The first question to ask here is: if PHNs do wander off reservation doing wasteful things, who is to blame: their poor governance framework causing confusion, or the PHN managers themselves?
This isn’t clearcut yet. It looks like a mix of both, but in some cases, you really have to wonder how capable a PHN manager is to have taken an organisation so far away from its core capabilities and objectives.
This is the part where I start to alienate a chunk of the PHN community – I’ve already got a lot them upset over the years – but there are many who are going to recognise this problem and want it clarified in some way, now the BCG review is out.
A lot of PHNs over the years have spent a lot of government money on trying to reinvent themselves as a sort of new age entrepreneurial technology provider to the sector.
But PHNs:
- have been given no formal remit to diversify in this manner: see DODHA’s own definition for what PHNs are supposed to be doing;
- hardly ever have any internal management skillset or experience in building out such businesses;
- are using government money to unfairly compete with existing private companies that built their businesses using private money, taking significant risk with that money;
- build stuff which is either already built or could be built much better by actual technology companies;
- often build the same thing that other PHNs are trying to build in a different region but in a manner that it can’t be reused across regions.
Even in those rare circumstances when a PHN does identify a technology problem that no one else has formally identified and genuinely might need a new technology solution, PHNs should not be allowed to try to build such technology or solutions themselves.
Markets do fail and when they do government sometimes needs to step in to help fix things.
But PHNs aren’t qualified to do it. They are qualified to identify need.
That need will sometimes manifest itself in the potential for a new technology solution. And it’s okay to be identifying such a need. It’s not OK going beyond this step, into a realm where they have no core capability to succeed.
Now let’s make a few more enemies.
If you analyse the many technical builds that PHNs have tried over the years it’s very hard to identify a single one that wasn’t either already in market from existing technology providers or could have been much better built by an actual technology company.
Some PHN managers will likely arc up on this comment, pointing out businesses like Polar, Primary Sense, and Primary Health Insights (PHI).
Some of these businesses work and the technology is now being used by some PHNs.
But in the case of each, the same businesses already existed in market or could have been built with more national scope and effectiveness if they weren’t built by a PHN.
If PHNs think they can do better, or need much better, then the process should not be to use government money to compete in a market that is either already delivering the services or could be better built out by a well-managed independent technology company.
That PHN management has consistently wanted to move upstream in the control of patient data by building out these businesses was foreseeable in a governance vacuum.
Data is power. Look at what is going on with AI at the moment. It’s sexy, enticing and career enhancing.
But to take public money, spend it on learning things about running technology that is the full-time remit of actual technology providers, then build stuff with zero risk because if you fail it wasn’t your money, isn’t a dynamic the government can afford to keep enabling.
We have now rolled data technology businesses and infrastructure across a slew of PHNs.
In doing so we not only rebuilt different versions of a couple of platforms that already exist in a few good iterations in the private sector – PenCS, Cubiko, KPeyes and more – we also built a sophisticated $10 million plus data lake storage facility in Western Australia, with a view to managing all PHN data (it doesn’t, by the way, manage all PHN data today).
The PHNs which did all this not only competed with the private sector using public money, they sought and gained an ACCC ruling that it would be okay to develop what was effectively a PHN-controlled monopoly on data extraction and control.
Why buy from the private sector when your PHN friends have the same service for you cheaper (subsidised by taxpayers)?
Who in DoHDA could honestly point to these projects and say that the remit they have given them is to become technology companies in the course of their core work on delivering regional health needs?
Maybe some will try, after all, the government had every reason and opportunity to stop the more-than-$10-million PHI data lake project in WA and it didn’t. It funded it.
So, who should we blame for a half stranded $10 million PHI facility in WA? (Note: it looks very much like the PHI facility will now be subsumed into a central government data plan via the AIHW, which will potentially optimise this project, but this was not the original plan).
It’s instructive to understand who most likely came up with PHI concept initially, shoehorned it into the DoHDA framework for PHN governance somehow, convinced WAHPA management it was a natural progression of their business model, and then helped sell it all to the government? Because it wasn’t WAHPA on its lonesome.
It was, unsurprisingly, a big-C consultant starting with the letter that follows C.
You would have loved to have been a fly on the wall of the first few whiteboard strategy sessions with that particular consultant and WAHPA. Not surprisingly, the consultant ended up getting a lion’s share of the follow-up work managing the build of PHI … no conflict there, I guess.
Data extraction, security, maintenance and analytics, which was never the formal remit for a PHN business, are not the only things PHNs have felt they should try their hand at to evolve their business models.
Recently a few have seen fit to play around in the e-referral and interoperability space.
Data is one thing. You can at least see a connection to why PHNs might think about moving upstream in data management.
But building out web-based e-referral and interoperability networks? That’s going very wide.
A couple of years ago, North Western Melbourne PHN, collaborating apparently with 11 other PHNs, decided it would build its own e-referral system and (if it worked) push it out across its 11 collaborating partners.
Not commission one. Not go to market. Just … build one.
From what we can see, the project was not put out to tender. We estimate that at a bare minimum the project is vastly exceeding the $1 million mark, but you can’t see anywhere in their financials where they spent this money and how much it actually all adds up to.
You can’t see it in the financials of any of the 11 other PHNs who collaborated on this project either.
This should ring alarm bells with DoHDA. It’s not like they can’t see what has gone on.
There is a whole report on the project put out by the PHN HERE, complete with Medicare branding. The project has been in play nearly four years now, with nothing much to show for it – 350 e-referrals only achieved so far, according to the report – and there’s not much talk of it.
Meanwhile, multiple PHNs across a couple of states — including Hunter New England, Murrumbidgee and Healthy North Coast (are any of these in the original collaborating 11, we wonder out loud?) — are all using a commercial platform to manage Medicare mental health e-referrals.
This is a system that works off the shelf with properly built and tested integration technology, including integrations to the major GPS patient management systems. Even better, it is already used in an ever-expanding series of hospital networks across the country, most of them, ironically, in Victoria.
The same commercial system was in market when NWMPHN started their project. Notably, NWMPHN did in fact partner with a vendor which can manage e-referrals, but which mostly uses old secure messaging technology as its communicating platform, and which hasn’t been configured properly.
When other PHNs and other network vendors approached NWPHN to connect to their new system, they were told that they don’t have any APIs yet to do that. That’s a sort of 101 rookie error if building anything interoperable these days. But they said they might build them, if they get enough new funding.
When the same vendor who was servicing six other PHNs for mental health referrals and many hospital networks said to NWPHN, “cool, we have an API to connect with the vendor technology you’ve implemented, we work with them already”, NW Melbourne told them, “sorry, we don’ t have the money for that work either”.
This is about as far away from modern interoperability architecture and planning, which typically prioritises open, reusable APIs and vendor-neutral integration, as you can get.
Relevantly the internal development capability of NWPHN for this project appears extremely limited for what is effectively a multi-layered integration platform – apparently a single developer.
It gets worse. Of course it does.
Because the system is unable to integrate with other systems, having no APIs, the PHN needs to do a bit of mechanical Turk work to bridge the gap in information that can’t get into their system. In this case they’ve apparently contracted Amplar nurses to download referral PDFs from other systems and manually enter them into their system.
Not sure why they didn’t cost integrating properly with the vendor servicing other PHNs and LHDs against paying Amplar nurses to do this work over time, but they haven’t. Ampler nurses are expensive and surely they could be better used in the health system.
What we appear to have then is a PHN with good intent but a fundamentally misdirected approach with a result that they are effectively stranding GPs, specialists and hospitals in their region from effective networking.
They’ve tried to build a system meant to digitise and streamline referrals, but which — at least in parts — appears to be introducing new layers of friction rather than removing them.
Instead of improving patient movement, reducing waiting lists, and supporting clinicians, we have:
- A bespoke, PHN-built layer sitting alongside existing vendor solutions;
- Duplication of capability already available in the market;
- Fragmentation of what should be a nationally consistent workflow.
Again, all funded with taxpayer money.
This is exactly the behaviour the BCG review was hinting at when it talked about PHNs “diversifying into other operations”.
What makes this example particularly striking is that NWMPHN is not building a simple tool — it is effectively acting as a product owner, system integrator and software developer, assembling a stack of forms, middleware, APIs and workflow management.
That is obviously something much better done by a domain expert technology vendor, not a health services commissioning body.
This isn’t a failed project in the traditional sense of technology implementation. It’s something more concerning: a technically needed project delivered by the wrong organisation, in a way that duplicates existing capability and fragments the system further.
The NWPHNs e-referral solution, PHI, Polar and Primary Sense aren’t isolated incidents.
They form part of a long-term pattern of how PHNs have rolled over the years – of PHNs identifying a “problem” and immediately jumping to, “we could build that”, without properly asking:
- Does this already exist?
- Can we commission it?
- Can we scale something proven?
- Do we have any core capability to build and run a technology platform?
The answer, almost always, is no. PHNs in this situation are almost always trying to solve a problem in the wrong way with the wrong capability.
And if you’re thinking this pattern might only a be a recent phenomenon because of how technology is evolving, think again.
About 10 years ago, South Western Sydney PHN started a $10m plus interoperability project which was so big and complex in its vision – to build a regional interoperability layer, connect GPs, hospitals and specialists, and create a data shared environment (essentially a regional HIE) – someone somewhere in government should have noticed the obvious likely problem emerging.
It was a visionary idea, but why was a PHN was allowed to pursue such a complex technical project without someone pulling them up and asking some hard questions of them?
SWSPHN did contract a few high-level vendors who had built HIEs in the US system to help them: iRAD and dbMotion were two platforms used, both good platforms, but both very expensive and requiring significant technical capability to plan and deploy. And these vendors weren’t in charge. They were just supplying tech and trying to meet the needs specified to them by the PHN.
Over time, the project ballooned, millions went into it, it eventually spluttered, people moved on, and then one day, it just vanished.
There was no reporting of its ending in any annual report we could find on the whole debacle. When Health Services Daily rang SWSPHN a few years back to follow up on what happened they said they’d get back to us, but they never did.
Before the SWSPHN fail, there was an even more serious fail in a technology project by North Brisbane PHN which spent over $20m trying to emulate the technology of a local technology company Extensia. It failed in very suspect circumstances and like SWSPHN there was no audit of what occurred and no repercussions for anyone.
Related
Today SWSLHD has an e-referral solution in place which also does networked advice and guidance, by effectively connecting local GPs, specialists and hospitals via a real time web based asynchronous application.
It’s the same vendor which NWPHN passed over although it is collecting PHNs, LHDs and other hospital networks in a manner that should have someone in DOHDA asking, maybe this solution works better than anything one of our PHNs could build?
If this vendor platform is working well, we don’t have a technology problem. We have a category error – PHNs taking the lead on solving the wrong problem, in the wrong way, with the wrong capability.
But as things stand today, it’s likely that PHNs will keep doing this.
And aren’t they going to have a lot of fun trying to sort out how they can use AI to service their GPs, specialists and allied health providers if we don’t reign in the exuberance. Some are already doing work to test the various AI scribes viability for their region. That’s just a crazy waste of money.
But fiddling with AI, data, and technology is fun and interesting work, especially if you don’ have to show any return for your investment in fiddling. Doing this sort of work feels strategic and it creates the illusion of system leadership.
So this will keep happening unless someone does something formal soon. As the BCG review so clearly points out, there is still very little governance, accountability or constraint to stop it happening.
Instead of analysing population need, commissioning services to meet those needs, and supporting providers to move to better integration we are getting multiple, random, side quests into technology businesses.
Funded with public money.
Every dollar spent building redundant, bespoke technology platforms or learning about AI when you don’t need too for what you do, is a dollar not spent on actual care — and in many cases, a dollar spent competing with vendors who are already solving the problem.
This is not complicated. That’s why it’s a bit weird that it still hasn’t changed in any way.
If a PHN identifies a technology problem, which being at the coalface of regional care delivery they should be doing as a core part of their work, then they should be escalating that problem centrally to have the issue assessed across the whole PHN network for viability.
If they see an AI application that they think will improve productivity that they don’ t see anywhere else, absolutely, write it up and send it to the middle for consideration.
If qualified people identify a need that isn’t already being met by technology providers in market, there should be a proper process of assessment, planning and tender, run by people who know how to do that, with the aim of build it once, deploy it nationally where needed, and make sure it can talk to the future of the system, as planned by the Australian Digital Health Agency.
PHNs are not technology companies. They were never meant to be.
Every time they try to become one, the system pays twice: once in wasted money and workforce and then again in lost opportunity.
The BCG review was right to focus on governance.
But once governance gets fixed, the thing that will become very obvious is that some of the worst decisions being made in the system are not structural but local and discretionary.
And they’re costing everyone a lot more than anyone seems willing to admit.
Note: PHNs are possibly one of our most important levers if we truly want to transition our healthcare system to a true focus on prevention. So if you’re in a PHN, and you aren’t too upset after reading this piece, we’d love to see you in Canberra on June 16 and 17 for our Prevention Pivot Health Leaders Workshop and Summit. We want to see you so much we’ve made available 10 tickets at a 50% discount HERE. using this discount code: Extra50 (note: you will a PHN email address).If you’re a PHN who has already paid at a higher price – there are few of you, email us and we’ll give you this deal if you’re in the 10 (greta@healthservicesdaily.com.au). If you want to bring three more people we will give you an even better deal.
