The provincial government’s $324-million deal to contract out administration of its Medical Services Plan and PharmaCare to a U.S.-based company has failed to bring the expected benefits, according to B.C.’s auditor general.

In a report released Thursday, John Doyle says the 10-year deal between the Ministry of Health and Maximus B.C. Health Inc. has led to improvements, but that many expected benefits — which included improved service levels, security of personal information and technology — have not been realized.

In about half of the areas, the report says, proper background data was never established in order to assess progress.

“Of concern to me was some of the benefits needed benchmarks against which to measure change, and some of those benchmarks don’t exist,” Doyle said.

Maximus operates Health Insurance B.C., which takes calls about PharmaCare and the Medical Services Plan.

The contract, signed in 2004, was one of the first large outsourcing deals made by the province, which has signed 11 such deals — totalling about $2.4 billion — with private-sector organizations.

One of the failures cited in the report was the replacement of three information systems mentioned as part of the reason for contracting out. One was done well and on time; one was replaced six years late; and one is outstanding.

“It’s just a shame … that the system hasn’t been able to bring in these new changes and, therefore, the benefits are not being realized as well as they could have been,” Doyle said.

Data security is also a concern. The ministry needs its own information to ensure data is being protected and should not rely on Maximus self-reporting, the report says.

“Part of that is to put in place audit-type software and protocols to ensure you can detect breaches — and two of them have not been put into place,” Doyle said. “The second is to do a bit more work to ensure Maximus reports accurately and correctly.”

Health Minister Margaret MacDiarmid said she’s pleased the auditor general found ways to improve the contract.

“I was a [doctor] … and I can remember the terrible frustration everybody had,” MacDiarmid said of the old government-run services. “This is just infinitely better.”

Work is underway on several recommendations, she said, suggesting the government would sign a five-year contract renewal before the agreement expires this month.

While Maximus has improved some service levels by implementing new call-centre technology and answering calls faster, Doyle said the government has not done an audit of the company and still needs to let the public know what’s being achieved and at what cost.

NDP health critic Mike Farnworth said the audit shows the government has not been properly measuring the benefits it claimed would be possible by contracting with Maximus.

“The reality is they haven’t monitored or been thorough in terms of whether those claims have actually been achieved,” he said. “We need to make sure they are actually done.”

Maximus was fined five times in 2005 for not meeting service-level targets. It has since met or exceeded benchmarks, according to the Health Ministry.

charnett@timescolonist.com

rshaw@timescolonist.com

— With files from The Canadian Press

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