US tech giant Amazon has gone from lobbying at the highest levels of government for a role in shaping public health, to a prime position in a massive digital overhaul of stressed IT systems by Te Whatu Ora.
Amazon Web Services (AWS) made private presentations twice to then-health minister Andrew Little in 2021 and last year, “about the exciting transformational opportunity that lies ahead for New Zealand’s health system”, emails released under the Official Information Act (OIA) showed.
Billionaire Jeff Bezos’ firm now has a key role “to transform the health sector” by implementing its shift of patient and other data to cloud computing.
Globally, tech giants have been getting more and more into healthcare as ageing patient demand soars.
The November 2021 briefing of Little covered “enabling policy settings”, among other things.
“You appear to have misunderstood the nature of my interactions with AWS,” Little told RNZ on Tuesday. These were driven by his “longstanding cross-portfolio interest in cloud” opportunities and risks, he said.
Amazon in March this year offered similar briefings to the new Health Minister, Dr Ayesha Verrall: “We can also bring in colleagues working in healthcare digital policy offshore to chat,” it told her - which she had not taken up.
The company told then-prime minister Jacinda Ardern in September 2021 it wanted input into the country’s slate of major reforms, including in health, to inform the government about the “art of the possible” in “large-scale digital transformations”.
Ardern’s office earlier released the seven-page lobbying letter in full to RNZ. But Little’s office redacted the entire document on the grounds of commercial sensitivity - the letter is headed ‘Amazon confidential’.
Te Whatu Ora has since launched what it calls a “data and digital transformation”, that is being placed at the core of hospital upgrades, alongside models of care and bricks-and-mortar.
It had many parts, such as a national medical data platform, and another to handle all staff data. A third for patient data, called Hira, alone is costing $170 million. And Health NZ recently told the government it would need more - that health IT funding needed to at least double.
Amazon now occupied a key juncture in this, with its web services arm AWS winning a share of the national hybrid multi-cloud programme.
“This programme is well underway and is building out [Microsoft] Azure and AWS cloud platforms to transform the health sector, with initiatives focused on consolidating and enhancing services, and facilitating improved data management,” a Te Whatu Ora paper in May 2023 said.
“The programme to use cloud computing platforms will help will [sic] lead to improved accessibility, operational efficiency and patient satisfaction,” the officials told Verrall, the paper showed.
AWS described its public-sector role as “to innovate, evolve and solve citizen challenges”.
Little told RNZ he had no decision-making power over what to buy at the time, that this rested with the Ministry of Health. Ministry deputy director-generals were invited to his AWS briefings, the documents showed.
The buzzword “transformation” occurred repeatedly in the dozens of pages of emails and papers about US tech lobbying of the government, released under the OIA to RNZ.
But the barriers were evident, too: the need was dire but the rollout had been slow. Just last week the government took back a $106m contingency fund for the health data transformation work, saying it “has taken longer than anticipated”, and has had to be reprogrammed.
Te Whatu Ora had data in many locations, but was also juggling what to do about some vital clinical systems doctors rely on, such as the fault-prone radiology reporting technology that serves one million people in the central region.
Three years ago, Little was told the overall IT systems “do not support the delivery of safe and high-quality patient-centred care”.
Three years on, officials still do not know the scale of the problems nationwide. They set up a working group recently to look at it.
“This is a complex task,” a Te Whatu Ora internal update said in June.
Clipping the ‘new gold’ ticket
Globally, tech giants had been talking up their capabilities to help, offering their huge data-crunching power - at a price. A local industry insider said the trouble was, when data was the “new gold” and there was more and more of it to analyse, whoever held the data got to clip the ticket every time public agencies wanted to look at it.
Media had reported on tech firms’ increasing efforts to integrate themselves into both public and private healthcare worldwide.
AWS’ first briefing with Little aimed “to get a flavour of lessons learned in health IT innovation globally”.
His private secretary set it up for November 2021, telling Amazon: “There would be no consideration of any procurement issues.”
AWS replied by email: “We are looking forward to this as a ‘think big’ session about the exciting transformational opportunity that lies ahead for New Zealand’s health system, and an opportunity to share our insights from supporting ambitious health programmes regionally and globally.”
The secretary copied in Amazon’s paid lobbyist Neale Jones of Wellington firm Capital, who used to be Little’s chief of staff when he was leader of the opposition and earlier, when he was a union leader.
He also copied in the big consultancy EY, which the government had paid millions to help with the health reforms.
After Verrall took over, AWS wrote to her in March 2023, offering “an update on some of the work we’ve been doing, our engagement with various health agencies etc”, as well as briefings like those given to Little.
“Myself and the head of public policy for New Zealand [BLANK], have been working with Minister Little’s office up until now to brief the then health minister on cloud technology and it’s [sic] role in digital health services,” AWS’s public policy manager in New Zealand wrote to Verrall’s senior private secretary.
“Would it suit to catch up for coffee with you or someone in your team to see how we can provide similar briefings for Minister Verrall if interested?”
Verrall’s office replied she was too busy to meet. It told RNZ on Tuesday she had not subsequently met with AWS.
Little on Tuesday told RNZ: “When I was health minister I had no decision-making role in procurement decisions by Manatū Hauora - Ministry of Health.”
He was interested in cloud computing opportunities to link public services but also was aware of the “many risks”.
The AWS briefings - broken into two parts due to diary pressures - had used the health sector as an example of capabilities emerging overseas.
“Some of the cases raised weren’t even built on the AWS platform, and were implemented by their competitors,” Little said in a statement.
He had met with a number of cloud companies, including Microsoft and Datacom, and had refreshed the government’s cloud-first policy - to strengthen it - this year because the policy first introduced by National “was never meaningfully operationalised”, he said.
The emails show two deputy director-generals of the Ministry of Health were invited to the AWS briefings with the minister, as well as the head of the health reform transition unit within the Department of Prime Minister and Cabinet - and former EY partner - Stephen McKernan, who was pivotal to setting up Te Whatu Ora 14 months ago.
Earlier this year, AWS also sought to meet Digital Economy and Communications Minister Ginny Andersen, saying it “brings a capability that can help the government achieve its well-being budget priorities and change programmes such as health transformation”.
Within weeks of the November 2021 briefing, Little’s secretary began setting up the second briefing for March 2022.
Later in October, AWS asked Little to open a breakfast where an Amazon executive and ex-CIA (Central Intelligence Agency) deputy director Sean Roche was due to speak (in the end, Roche could not make it). The event was for 50 public sector executives - “there will be no media present”, Little was told.
AWS in its September 2021 letter to Ardern repeatedly talked up the benefits to New Zealand of having “the right regulatory and policy settings”, and said it wanted the chance to have input into “fine-tuning New Zealand’s policy settings”.
AWS wrote a second time to Ardern in mid-2022, but the government has so far failed to release this letter to RNZ, which asked for it months ago.
Amazon has had health successes elsewhere, buying up a big GP services company in the private sector in the US, leading the digital overhaul of New South Wales’ public health system, and doing similar at New Zealand’s largest private hospital network, Southern Cross.
All the big tech firms sold themselves on their efficiency in handling masses of health data in their hyper-scale data centres (several are being built in New Zealand currently). The government’s refreshed cloud-first policy more strongly advocated to shift public data to such centres, rather than keep it inside agencies.
However, the cloud giants also faced trenchant criticism about failed projects and profit-seeking amid growing competition, such as from private equity firms that now own more than half of all medical specialists in certain regional US markets.
The government for its part could not be seen to be too close to Big Tech, when it has been playing up the corporate failure to pay enough tax. Just last week it introduced legislation for a new digital services tax, stating: “With more and more overseas businesses embracing digital business models, our ability to tax them is restricted and the burden falls to smaller groups of taxpayers ... We don’t think it’s fair that everyday Kiwis pay their fair share of taxes but there’s no tax liability for large multinationals.”
The tax of 3 per cent on gross revenues was payable by firms that made over $3.5m a year from digital services provided to New Zealand users.
New Zealand is far from alone in struggling over the costs versus benefits, and local capabilities versus US hyper-scale muscle. In Europe, a cloud certification scheme has been proposed that is seen by some critics as a form of protectionism. Australia had been trying to ensure local cloud companies get a slice of the action.
The papers released under the OIA showed health’s “technical debt” included 4000 competing or obsolete IT applications, and ageing clinical and non-clinical data systems.
“There are risks associated with the current state of systems across Te Whatu Ora, notably cyber-security and... legacy systems which are end-of-life, out-of-support and/or not fit for purpose,” Verrall was told in May.
To tackle them, IT funding should be raised from 2-2.5 per cent to an internationally acceptable 5-6 per cent, the officials said.
“This structural deficit must be addressed if we are to fully modernise and transform health services.”
Three programmes were key to this: the hybrid cloud work AWS was an anchor of, a digital blueprint to “provide clear direction”, and a network and communications programme, the documents showed.