Canberra Hospital is paying $580,000 to a consultancy firm which sued the last hospital it worked for over a dispute about the value of its work.
And the managing director of the consultancy business has a complicated prior relationship with one of the hospital's top executives, who not only recommended him for the role but also provided evidence used against him in a New Zealand court case.
Canberra Health Services chief operating officer Grant Howard and health consultant Lindsay Boyd go back many years and their working relationship has crossed state borders and even the Tasman Sea.
There is evidence of deep mutual admiration and part of Mr Boyd's work was even based on a paper written by Dr Howard. But there is also evidence, tendered to a New Zealand court, of sharply conflicting accounts of key events upon which potentially millions of dollars of public money swung.
Keezz sued the Waikato District Health Board, located in a region south of Auckland, alleging it was owed $782,000. The bulk of this sum comprised an "at risk fee" of $500,000 which Keezz claimed was due because it had delivered greater savings to the hospital than they said it had.
There was no dispute that the project undertaken by Keezz had been successful in improving the operations of the surgical division of the hospital but at issue was whether the savings were sufficiently high to trigger the payment of the fee.
Keezz's case was unsuccessful and part of that failure could be attributed to the evidence of Dr Howard.
Dr Howard gave evidence that Mr Boyd told him that, following legal advice, he was planning to leave New Zealand to avoid being barred from leaving the country as a result of a police investigation after his former business partner accused him of fraud. Mr Boyd denied this conversation took place but the court accepted Dr Howard's evidence.
Not only that, Mr Boyd had asserted the existence of a handwritten note written by Dr Howard saying he agreed with the consultant's claims over how much money he had saved the Waikato health authority. That note was never found.
But Dr Howard subsequently made the recommendation to Canberra Health Services they consider Mr Boyd's consultancy for a $580,000 contract.
Canberra Health Services has defended the handling of the contract and said all proper processes were followed. A spokesman said while Dr Howard identified Keezz as a company with expertise in the field he was not involved in the invite-only procurement process.
The spokesman said Keezz's work had already resulted in improvements at the hospital.
'Not the kind of conversation you forget'
Keezz has been engaged by Canberra Health Services as part of an effort to establish an operations centre for Canberra Hospital and to oversee the health service and manage patient flow throughout the hospital.
It is the third place Dr Howard and Mr Boyd have worked together. Keezz also had a contract with Queensland Health when Dr Howard was working there.
Dr Howard also recommended Mr Boyd for the job in New Zealand. This job ended in acrimonious circumstances when Keezz sued the hospital.
The Canberra Health Services contract began in March this year, which was less than a year after Dr Howard testified against Mr Boyd.
Court documents show Mr Boyd fell out with his former business partner who accused Mr Boyd of fraud and made a complaint to police.
Dr Howard said he was told by the Keezz managing director he had decided to return to Australia to avoid being banned from leaving New Zealand because of the police investigation.
Mr Boyd denied the conversation but Dr Howard made a note of it. The court accepted Dr Howard's version.
"I accepted Dr Howard's evidence as to the substance of the conversation and reject Mr Boyd's denial of it," Justice Geoffrey Venning said in the judgement.
"Dr Howard made a note of the conversation shortly after it. Further, as he said when pressed on the point in cross-examination, it was 'not the kind of conversation you would forget'.
"Dr Howard was a supporter of Mr Boyd ... he had no reason to make up the conversation or to paint Mr Boyd in a bad light."
Keezz was engaged by the Waikato District Health Board in 2017 under a $2.4 million contract but half of that (later varied to $500,000) was an at-risk fee. Under the terms of the contract Mr Boyd would not receive this until $25 million in savings had been achieved.
According to the health service, Keezz was able to achieve only about $9.7 million in savings. However, there was no agreement on how the savings would be measured, and Keezz insisted the savings were in the order of more than $36 million.
Mr Boyd alleged the savings calculations were included on a document given to Dr Howard, who was the then-interim chief executive, and he signed the document saying "I fully agree". Dr Howard told the court he had no recollection of making the note and a copy could not be located. The court did not accept Mr Boyd's evidence.
"I would have expected if there was such a document with Dr Howard's acknowledgement on it, either Mr Boyd would have kept a copy, or he would have referred to Dr Howard's agreement in contemporaneous email exchanges, or that WDHB would have it in its records," Justice Venning said.
The New Zealand Herald reported Waikato Hospital was spending $25 million a year in outsourcing elective surgeries. The hospital was also at risk of losing training accreditation in orthopaedics when Keezz was engaged.
Canberra Hospital has recently lost training accreditation in orthopaedics. The hospital has also lost training accreditation in other areas over recent years.
A Canberra Health Services spokesman said its contract with Keezz won't be liable to such a lawsuit because it has different terms.
The spokesman said that unlike the performance-based New Zealand contract, Keezz's contract with Canberra Health Services was based on the hours Mr Boyd had worked at Canberra Hospital. The contract can also be cancelled at short notice.
The contract requires a representative from Keezz to work at Canberra Hospital every day of the week with a focus on weekends.
"The integrated operations centre at Canberra Hospital looks at patient journeys, such as emergency department presentations or a planned admission through to discharge or transfer, to ensure patients are safely and effectively flowing through relevant hospital emergency departments," the spokesman said.
"The operations centre has a focus on balancing planned and unplanned demand across the health system, including all ACT public hospitals.
"The operations centre has already made a difference to the patient journey through Canberra Hospital ... has supported patients to move through our hospitals more quickly ... more bed capacity has become available which means better access and outcomes for patients."
The spokesman said part of the contract also includes training staff to ensure the centre can be sustained once the contract has ended.
Keezz does not have an online presence and no images for Mr Boyd could be found online. The Canberra Times was made aware Mr Boyd had an ACT government email address and contacted him for comment.
Mr Boyd responded to say any questions through that email address should be directed through Canberra Health Services. He provided a personal email but did not respond to questions sent there.
'Not part of the procurement process'
Despite the history between Dr Howard and Mr Boyd, Canberra Health Services said proper processes were followed. A spokesman said Dr Howard excluded himself from the procurement after identifying Keezz as a suitable company for the work.
Only three companies were invited to tender for the project. One of the companies declined to make a bid, the Canberra Health Services' spokesman said. Keezz offered the lowest price and had the greatest value against the tender criteria.
The spokesman said Canberra Health Services was aware Dr Howard had worked with Keezz in both Queensland and New Zealand and he had disclosed this information before the procurement.
Canberra Health Services was provided with a copy of the court findings by Dr Howard, a spokesman said. The spokesman did not directly respond to a question about how much they knew about the findings from the court.
"Dr Howard disclosed his previous history of working with Mr Boyd and excluded himself from any involvement in establishing or evaluating the tender process," he said.
"Dr Howard was not part of the procurement process. The procurement evaluation panel included an independent executive member from outside CHS."
Tender documents for the contract were not publicly available when The Canberra Times contacted Canberra Health Services. A spokesman said this was due to an error and the documents were then uploaded to the Tenders ACT website.
"It has been identified that the issue arose from the length of the file path, and the user was advised the file is uploaded, but the file will not be on the website. CHS have resolved the issue for this contract," a spokesman said.
"A quality assurance step through peer review has now been added to CHS processes to ensure all uploads are independently verified so there is no recurrence of this issue."
