Canadian Health IT Scandal a Warning for U.S. Stimulus Spending

(MoneyWatch)  A scandal unfolding in Canada should serve as an early warning for anyone concerned about how the U.S. government will spend the net $19.2 billion in federal stimulus funding earmarked for health IT.

Ontario's top health-IT official was fired over the weekend after reportedly handing out millions of dollars in no-bid consulting contracts, signing off on allegedly dubious expenses and taking a hefty bonus after just five months on the job. It's a shame, because Sarah Kramer, hired late last year to head the newly formed eHealth Ontario agency, actually figured out how to make data interoperability work in healthcare.

In her previous job as VP and chief information officer of Ontario's central cancer registry, Kramer successfully demonstrated that a well-designed "master patient index" of all records in a database can facilitate the kind of information interoperability that we're striving for here in the States. At the same time, she was working to reduce wait times for healthcare services that critics of government-run medicine love to seize on.

Kramer seemed an obvious choice to head the agency leading an effort to bring EHRs to everyone in Canada's most populous province by 2015. Now, she's out of a lucrative job, and some political opponents are calling for her former boss, Ontario Health Minister David Caplan, to resign.

A fellow health IT reporter in Toronto tells me that he lost confidence in Kramer when news broke a couple of months ago that she had spent C$51,500 on new office furniture when she came on board last fall, just as the global economy was tanking.

According to CBC News, Kramer also signed off on contracts for out-of-town, C$2,700-a-day consultants -- not counting their per-diem and travel expenses -- who had been fired by a predecessor to eHealth Ontario. Kramer herself reportedly took a C$400 limo ride with her family on the public's dime. "And yet what has people really upset is some minor details," my reporter friend tells me in an e-mail. " It turns out that these consultants have been submitting expense items such as soft drinks, tea, doughnuts, etc. for amounts like $1.50. That kind of pettiness is more than people here can bear."

Imagine the outrage on this side of the border if the Department of Health and Human Services starts directing billions of taxpayer dollars to high-paid insiders and frivolous expenses when it should be leading the way toward a more efficient health system. It may take more than a $1.50 beverage to set off the alarm bells here, but power and expense accounts have their ways of corrupting competent people.

Consider this an inexpensive lesson from our northern neighbors.