Health New Zealand says it chose big US tech firms to deliver a landmark data project because they have better size, security and robustness than local bidders.
Te Whatu Ora is using cloud computing platforms from Microsoft and Amazon Web Services.
Its $4.5 million hybrid multicloud project would be a foundation for the digital shift needed to "transform" health systems, it said.
The government was told in 2020 health IT needed at least $2 billion in upgrades; in May, the Health Minister was warned again of ageing systems and that IT funding was still lagging at half the level it should be, according to an Official Information Act request.
Te Whatu Ora is now pledging to both deliver the foundation cloud platform as well as improving "the safety and effectiveness of existing clinical systems".
The choice then, is not between gold-plated data management system and ailing life-saving machines - Te Whatu Ora said New Zealand could get both.
"While this foundational cloud work progresses, we remain committed to improving the safety and effectiveness of existing clinical systems," said integration and delivery director Stuart Bloomfield in a statement.
"Savings generated as a result of cloud adoption can be used to upgrade and extend vital clinical IT tools to help our frontline clinicians provide better care."
In 2020 and 2021, Amazon was at the heart of a lot of the Covid-19 IT systems set up by the Ministry of Health, such as contact-tracing. Its wide range of services provided a fit with data storage and analysing, as well as monitoring and surveillance.
Now in phase two - as a recent OIA revealed - the hybrid cloud project was "a "big step towards better digital healthcare".
It "will be a foundation of the data and digital shift required to transform and modernise our systems".
Cloud bidders were chosen on a case-by-case basis, Bloomfield said.
"After a competitive tender process under government procurement rules, these providers [Amazon and Microsoft] were chosen for current needs due to their better scale, security, and robustness.
"This doesn't mean that we won't utilise other suppliers, local or global, in future.
"There is still an important role for local providers in other areas of our cloud programme such as testing, design, advice, and support."
Many current systems were old or had significant limitations, he said.
As in any sector, upgrades demand increasingly high-tech systems. In health in particular, these then generate more and more data which requires other upgrades or new systems to store, analyse and share it.
This trend worldwide has provided a big 'in' to healthcare for tech firms, especially those that run hyper-scale cloud data centres.
An industry survey last year said "despite the huge progress made in healthcare IT in recent years, healthcare organisations continue to struggle with the collection, analysis, and application of data to make timely decisions".
Many such surveys arise from within the very companies competing in the sector.
It is common for tech firms to say health organisations must become more "agile", and this is echoed in Te Whatu Ora's own language: It calls its new US buy an "agile and scalable platform".
"Transformation" is another buzzword shared by the two sectors - tech, and public and private health.
Bloomfield told RNZ the hybrid multicloud platform was an advanced, reliable system "essential" for any modern health service.
"For example, each of our hospitals require multiple highly connected and coordinated software systems to operate."
He put a plug in for local capability: "Local providers know the specific needs and features of the New Zealand healthcare sector.
"Te Whatu Ora wants to work with them and include them in the national programme.
"It is a joint effort using both overseas and local expertise for one common goal - a modern, resilient, and efficient healthcare system."
The government has directed all public agencies not to upgrade their own IT storage systems, but to shift their masses of public data to off-site cloud computing processors - the largest of which are run by Amazon, Microsoft and Google, at this stage all offshore.
In public health, this shift is integral to the so-called "transformation".
Amazon Web Services (AWS) engaged in substantial lobbying of government ministers about what it called a "transformation" of public health via IT upgrades, back to 2021 at least.
AWS also achieved traction with an offer taken up by the Health Minister to help out when Waikato hospital was hit by a cyber attack in May 2021.
Growing cyber threats provide an obvious promotional angle for the larger tech firms to play up the scale of their security systems - though recently Microsoft has copped a lot of flak over hacks.
With health data in particular being so sensitive, and valuable, this can contribute to risk aversion among official procurers around what system to buy.
Cynical local industry observers have commented that organisations' inability to tell who has sufficient digital skills has led to a "a vicious circle of mounting ineptitude".
"They hire a big firm because it is personally a safer, more defensible action," one said. "Years ago, when IBM was the biggest game in town, there was a phrase that all managers and procurement people knew, 'No one ever got fired for buying IBM.' "
But who holds the data creates its own issues.
The government has received advice from a King's Counsel lawyer, and from privacy impact experts, that using foreign-owned data centres - even if the centres themselves are in New Zealand - places the data under the legal jurisdiction of the foreign country, and raises the risk the other country could obtain the data. The US has a Cloud Act that raises this possibility.
Officials appear ambivalent on the issue, various OIA documents have shown, and the New Zealand government is increasingly committed to moving public data to hyper-scale data centres.
Free trade deals complicate how control or "data sovereignty" can be used in weighing up tenders, though health data can get more protection than most.
The deals, though, set a high bar for the government if it wanted to restrict what personal information can be taken out of the country, said law professor Jane Kelsey.
"To date NZ has limited obligations to the US, but will have under the Indo-Pacific Economic Framework currently under negotiation," she said.
"The rules, if adopted, would say New Zealand can't stop those companies taking the data out of the country to wherever they want.
"The government could impose restrictions on the US companies taking the data out of the country if there isn't an agreement that yet covers them."