Personal ties exposed in eHealth's untendered contracts
Last Updated: Wednesday, June 3, 2009 | 12:52 PM ET
CBC News
Executives at two companies awarded untendered contracts from eHealth Ontario had close personal connections to the CEO and board chairman, CBC News has learned.
The provincial agency, tasked with creating an electronic health record system, has been under fire over nearly $5 million doled out in untendered contracts during the first months after its creation in September 2008.
Sarah Kramer is CEO of eHealth Ontario. (CBC) New information shows an intricate web of connections between eHealth and at least two of the consulting firms — Accenture Inc. and Courtyard Group — that were granted more than $3.3 million in contracts never subjected to competitive bids as the agency was first set up.
Sources also told the CBC that some senior officials in the Health Ministry opposed the appointment of Sarah Kramer as eHealth CEO on the grounds that she wasn't qualified to run the $2-billion agency.
Kramer is well acquainted with Will Falk, a senior partner at Accenture. Falk's wife is a childhood friend of Kramer's and Kramer listed Falk as a personal reference when applying for the eHealth job in late 2008.
Accenture secured two untendered contracts worth nearly $1.1 million on Oct. 29, 2008, about a week before Kramer took her post as CEO but while she was advising the board in an unofficial capacity. A third untendered contract worth about $248,000 was awarded to the firm in January.
"The board did have me on early as an adviser, and that's the role I played until I became officially the CEO," Kramer told CBC News in an earlier interview.
According to Kramer, the final seal of approval for contracts awarded in October, however, came from the board of directors, chaired by Dr. Alan Hudson.
Several ties between Courtyard exec, eHealth board
Ties between Hudson and Courtyard Group, a firm awarded nearly $2 million in sole-sourced contracts, have also come into question.
EHealth Ontario was created in September 2008 with the merger of SSHA and the e-health program at the Ministry of Health. (CBC) Sources say Hudson, who is also in charge of Ontario's strategy to reduce health-care wait times, was an old colleague and mentor to Michael Guerriere, a founding partner at Courtyard.
Guerriere left St. Michael's Hospital in the mid-1990s after he was recruited by Hudson to join the University Health Network, where he went on to become the chief operating officer and chief information officer. He was widely believed to be Hudson's personal choice to succeed him as the head of the network, but the job went to someone else and Guerriere left to help form Courtyard.
When Hudson later served as chair of Cancer Care Ontario, Courtyard received consulting contracts. That continued at eHealth where Courtyard received $915,000 in October 2008 while the board, with Hudson at its helm, held the agency's purse strings. The firm received another $1 million in contracts several months later under Kramer's leadership.
But Hudson wasn't Guerriere's only connection on the eHealth board. He's also related to one of four board members who were serving in October — Matthew Anderson, CEO of the Toronto Central Local Health Integration Network. Anderson is married to Guerriere's cousin.
On top of the contracts awarded to his company, Guerriere also served temporarily as eHealth's senior vice-president of strategy, billing more than $3,000 a day as a consultant while also overseeing the work of Courtyard and advising Kramer on future consulting needs in his role as vice-president.
Guerriere's wife, Miyo Yamashita, also heads a firm, Anzen Consulting, that benefited from a $280,000 untendered eHealth contract in October. Yamashita charged the agency for such tasks as reading New York Times articles from her husband, reviewing a holiday voicemail message and debriefing during a subway ride.
New Democrat health critic France Gélinas denounced eHealth for what she described as outrageous "white-collar corruption."
Interim Progressive Conservative leader Bob Runciman described the connections as a "you scratch my back, I'll scratch yours" kind of relationship.
"I think it's an incestuous little relationship amongst a relatively small group of people who have known each other for many years and worked together for each other for many years and are looking after each other in a very profitable way for them," he told CBC News.
Connections expected, eHealth spokeswoman
Asked about the board awarding contracts to Courtyard, an eHealth spokeswoman, Deanna Allen, said when someone has worked in the health field as long as Hudson has, there are bound to be connections.
Hudson has refused requests for an interview until a review of eHealth's spending practices is complete.
The Ontario government has requested that provincial Auditor General Jim McCarter accelerate a review already underway into the agency's spending practices that was due for December.
A third-party consulting firm, PricewaterhouseCooper, is also reviewing the agency's books, under the management of an internal government auditor, the Health Ministry said.
Premier Dalton McGuinty said he wants to see the auditor general's report before taking action. "There are some interesting perspectives brought by the opposition and others who've chosen to weigh in on this, all of that's very helpful," McGuinty told reporters Wednesday morning. "But I think what would be most helpful is a dispassionate, calm and thoughtful review by the auditor general."
The premier reiterated that private firms, such as consulting agencies, hired by the government should be subject to the same expectations as those in the public sector.
EHealth Ontario was created with the merger of SSHA and the e-health program at the Ministry of Health.
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