By: Natalie Akoorie

Waikato DHB’s interim chief executive Derek Wright says the cost of running the SmartHealth service was too expensive. Photo / Alan Gibson

A controversial virtual health app that failed to attract enough users and drew consults for penis enlargements has been canned, with critics slamming it as a waste of $18.8 million of taxpayer money.

Waikato District Health Board today announced it had pulled the plug on SmartHealth because it could not justify spending another $7.2m on a contract with American-based technology company HealthTap to continue providing the service.

The news comes before an EY (Ernst Young) review of the online doctor service, commissioned by the DHB last year, is complete and as the Auditor-General continues to probe the procurement of the original two-year contract with HealthTap.

The Herald revealed in October the proposal to proceed with the HealthTap app was rushed through board approval by disgraced former chief executive Dr Nigel Murray and former board chair Bob Simcock in one month in mid-2015.

The business case has never been made public.

Former Labour MP Sue Moroney, who in December asked the Serious Fraud Office to investigate the circumstances surrounding the procurement of HealthTap when she complained about Murray’s excessive spending, said the contract had been a waste of $18.8m of taxpayer money.

“It’s an absolute failure of governance,” Moroney said. “These are the very reasons why boards need to make sure that they do proper due diligence before they commit tens of millions of taxpayer funding to any project within health.

“I think also it’s important that because the contract has been cancelled that means there should be even more scrutiny on the circumstances under which it was granted in the first place.”

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