Australian State Health Departments may be headed for trouble unless they can learn the lessons of failed transformation projects overseas, according to a leading health transformation project expert.

But their timing couldn't be better for embarking on such projects, given the opportunity to learn from the "mistakes and missteps that have been made in other global markets".

Ivo Nelson, vice president of IBM Healthcare & Life Sciences and former CEO of Healthlink, who has been responsible for a number of e-health transformation projects, says project failures in the US and UK show that strong leadership and a commitment from all players to act as a team is essential to success. And Nelson says CEOs in state health departments will face, and must make, some genuinely tough decisions about best practices and standards if they hope to succeed.

Australian states have started, or are about to embark on, state-wide transformation projects to implement software applications to support clinical and patient administration functions. These are huge, complex and critical projects that must be successful, Nelson says. IBM Healthcare & Life Sciences has implemented similar projects for health departments and organizations across Asia Pacific, Europe and North America.

In the US Kaiser Permanente, the nation's largest not-for-profit integrated delivery system with more than eight million members, initially budgeted between two and three million dollars for its planned major clinical information system transformation, known as KP HealthConnect. So far it has spent twice as much on the effort to integrate all patient information in a single system linking medical information with billing, scheduling, and registration data, because of a lack of leadership and failures in collaboration, Nelson says.

And he says Australia's health system structure displays similar vulnerabilities.

"The same problem is going to happen in Australia where maybe there is a person sitting on top of an organization, but you have hospitals that tend to be independent in how they operate. Kaiser has multiple regions around the United States. The people that sit in the corporate office aren't necessarily always empowered to make those decisions. They make a decision and then somebody in the region may say 'well I think I'll do that, or maybe not'. So its that (lack of) collaboration, that (lack of) commitment to operating as a team that is what causes those problems to happen.

"And the UK is an example where a lot of very good contracting was done for systems, at a cost of somewhere around 20 billion dollars, and zero attention was really paid to change management and position adoption for the systems and so now they're really struggling with getting the systems to actually be accepted by the hospitals once they're ready to install."

Nelson believes that the most critical aspect of these projects is to implement best practice processes so that inefficiency is not hard-wired into an organization and to bring about change management within the organization (the doctors, nurses, administrators, executives etc)

CIOs need to engage the executive management and make sure that they are operating as part of a team and part of the process, and they need to especially engage the physicians and encourage them to be participative in and collaborative of everything they do.

"Those two constituents are the most important to them and that's probably true of a lot of IT projects," Nelson says.

"And secondly generally people underestimate the integration requirements. There's a lot of systems that have to be tied together usually in a hospital and having an understanding of the standards and the integration requirements is essential. That's all considered on the front end of the project and is another thing that causes failure."

Nelson says leadership must come from the CEO and the management team under the CEO. The CIO is clearly important for good execution, but it is the culture, not the IT systems, that are the major cause of failure.