Govt opens wallet to keep Medicare payments system in house

The government will spend $67.3 million this year working on the overhaul of the Medicare payments system after being forced to ditch a proposal interpreted as the first step in a long-term plan to privatise Medicare.

Following the backlash around its business outsourcing proposal for the Medicare payments processing engine last year, the government was today at pains to point out the new funding would ensure the Commonwealth continued to own the platform.

The money will help “modernise the health and aged care payments system and ensure that the government continues to own and operate the ICT systems that deliver Medicare, the PBS, aged care and related payments into the future”, it said in its 2017-18 federal budget papers.

In March this year the government asked the market to pitch a replacement for the Medicare IT back-end after being forced to back down from its 2016 outsourcing proposal.

It is now hunting for an off-the-shelf solution that can handle the 600 million payments totalling $50 billion per year made to Medicare, the Pharmaceutical Benefits Scheme, and to veterans and aged care recipients.

The Department of Health is currently assessing pitches following its April 4 deadline for submissions.

It is only looking at what solutions are available at the moment, and whether “demonstrated progress” can be achieved by 2019.

Human Services CIO Gary Sterrenberg estimated earlier this year that the existing 30-year-old system only has around three years of life left in it.

The government today said its new funding injection would allow “market engagement, procurement, and design work to continue” while keeping the existing payment system up and running.

Modernisation of public sector tech

The government has also ordered the wider public sector to get its IT in shape and has given agencies almost $200 million for the effort.

The  budget papers detail specific reforms under the $500 million public service modernisation fund announced last year.

Just under $124 million of the total funding will go towards “corporate service delivery and workforce capability”, intended to accelerate agencies’ transition to shared corporate services arrangements.

“This will support an additional 60 agencies to consolidate their core transactional corporate services” - finance and HR systems - “and associated back office IT systems into one of six corporate services hubs”, the budget documents state.

It is hoped that around 97 percent of public sector staff in scope for the shared and common services will be serviced from one of the hubs by June 30 2021.

DTA de-duplication

The government has also given the Digital Transformation Agency $64.6 million to “reduce duplication between agencies and improve the user experience when accessing government services online”.

It will specifically target ‘tell us once’ systems so users don’t need to report the same information to multiple agencies; the ability for users to choose how they receive notifications; and standardising agency access to the RBA payment systems.

The DTA will also develop a “federated data exchange platform” that removes the need to build and maintain bespoke point-to-point data exchanges between agencies, the budget papers reveal.