The Victorian Government has abandoned its statewide HealthSMART IT project, reportedly citing a cost overrun of at least $140 million.
A spokeswoman for Health Minister David Davis' office told iTnews that funding for the project would conclude on June 30 this year.
Four lead agencies - Eastern Health, Royal Victorian Eye and Ear Hospital, Austin Health and Peninsula Health - will continue using HealthSMART, after adopting the system almost a year ago.
However, the other six health services slated to have received the system will be able to make their own choices about the computer systems they require, according to a report by ABC News.
The ministerial spokeswoman said that the Government would also look at alternate arrangements, and set up an expert panel to inform it of next steps.
The state government has considered abandoning HealthSMART as early as February 2011.
At the time, The Age reported "dozens" of crucial staff had either been axed or would not have their contracts renewed.
A month earlier, the Australian Medical Assocation's (AMA) Victorian state branch had urged the State Government to stick with HealthSMART, commit funding and to turning the "mess" around.
However, in November 2011, an own-motion investigation by Victorian ombudsman George Brouwer into the sorry state of some IT projects added another critical voice against HealthSMART.
The Ombudsman expected the initial $323 million budget for HealthSMART to blow out to a projected $566 million.
HealthSMART's woes were compounded by a revelation by Brouwer that the project had no business case.
Until late February 2012, the AMA publicly held out hope that the project could still be salvaged.
''I've had discussions with government and they know it will improve efficiency and safety and they want to institute it, they just have to find the money,'' AMA Victoria president Harry Hemley told Fairfax.
The project was to have brought hospitals a new clinical, patient and client management, resource management and picture archiving systems.