IBM settles with Australian government over e-health contract

IBM and the National E-Health Transition Authority have settled a dispute over the termination of a key AU$24 million contract.
Written by Josh Taylor, Contributor on

Although it appeared bound for the courts, IBM and the National E-Health Transition Authority have settled a dispute over the termination of an AU$24 million contract for IBM to deliver an authentication service as part of the Australian government's billion-dollar e-health project.

In 2011, IBM was tasked to develop a system that would use public key infrastructure and secure tokens, such as smart cards, in order to provide an authenticated service. This is so that healthcare personnel and providers can exchange e-health information, including referrals, prescriptions, and personally controlled electronic health records (PCEHRs).

It was part of the Australian government's initial AU$466.7 million investment in e-health record systems that came online in July 2012.

The IBM National Authentication Service for Health (NASH) system was due to be delivered by June 30, 2012, however NEHTA and IBM confirmed in October last year that the contract had been terminated and it was an "ongoing legal matter".

In the meantime, the government implemented an interim NASH system.

While the IBM and NEHTA dispute appeared to be bound for the courts, in a response to Questions on Notice provided to Liberal Senator Sue Boyce in April, the NEHTA confirmed that it had settled with IBM.

"NEHTA and IBM Australia have reached by mutual agreement a conclusion to their discussions regarding the termination of the National Authentication Service for Health (NASH) Design & Build and Operate contracts. The terms of that agreement are confidential," NEHTA said.

The authority indicated that discussions were ongoing through October last year, and the agency had obtained advice from lawyers outside of NEHTA about the termination of the IBM contract. It has refused to disclose the legal advice it received around the termination of the contract.

"For NEHTA to achieve the best outcomes for taxpayers in relation to legal matters arising in the course of its operations, it needs to be able to access full and frank legal advice," NEHTA said.

"Open disclosure of the advice which NEHTA received about termination of the contract and its discussions with IBM may have jeopardised those discussions those discussions and the ultimate agreement with IBM."

Next week's Budget estimates hearing will likely provide the latest statistics for how many Australians are taking up the e-health records, but April reporting suggests slightly over 100,000 have registered for the Personally Controlled E-Health Records (PCEHR), well short of the 500,000 the government had estimated would be on the system by the end of June this year.

As of May 7, 2013, the Department of Health and Ageing said that 1,250 clinical records have been uploaded to the system, which would include discharge summaries and shared health summaries. Patients have put in 14,600 of their own health summaries, custodian reports and other documents as of May 7, 2013.

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