New Zealand's unused contingency funds for digital health projects have been diverted to resolve issues in healthcare payroll systems.

Based on recently disclosed government documents, the government decided early this year to tap the contingency funds under the "Data and Digital Foundations and Innovation" initiative to pay for "roster to payroll stabilisation."

"[S]tabilising payroll systems has emerged as a risk that will require immediate investment. Investment may be required to address payroll systems that will reach [their] end of life within the next 18 months," it said. 

THE LARGER CONTEXT

Te Whatu Ora is currently focusing on addressing incorrect leave payments to current and former employees, dating back to 2010. The government body, established in 2022 to replace the previous 20 district health boards that made up the country's health system, said it inherited payroll systems that were "set up differently with different practices and local arrangements in place." None of them did not comply with the Holidays Act as well. 

"Further to this, there are parts of the country that are not only non-compliant but will require immediate rectification to ensure they will function while a medium-term solution is found."

Te Whatu Ora is now limiting ICT expansions and moving to more robust platforms, as it discovered over 4,000 clinical and business system applications across the health system having reached or beyond their end of life and are incurring high technical debt.

In Budget 2024 announced in June, NZ$330 million ($203 million) that was set aside for the "Data and Digital Foundations and Innovation" and "Data and Digital Infrastructure and Capability – Enabling Health System Transformation" initiatives were returned to the government's coffers as savings. Both initiatives, which covered the national health information project, Hira, aim to deliver digital health reforms. 

Funding for free telehealth was also cut in Budget 2024, as uptake was found unsustainable and patients preferred receiving care more in person than online or remotely.