Medicare shifts to Human Services IT

The Department of Human Services has assumed responsibility for Medicare applications and IT services in the final step of a two-year move away from outsourcer IBM.

Medicare, which manages Australia’s universal health care system, has outsourced mainframe, midrange, desktop, gateway and service desk services to IBM since 2000.

It decided to disengage from IBM in December 2010, a year after the Federal Government announced plans to consolidate the IT, staff and procurement at Human Services agencies.

A Human Services spokesman told iTnews this week that all Medicare systems were moved onto DHS hardware last month. The IBM contract is due to expire on December 31.

The department has inked nine contracts with IBM since November 2012, including deals for IT disengagement services, IT transition services and IT contractor services.

Of those, six contracts worth a total of $1.19 million were due to expire at the end of this month, including a $440,000 contract titled “Disengagement for Medicare Transition”.

Another contract, titled “IT Transition Services”, spanned almost three months between November 6, 2012 and January 31, 2013, and was valued at a total of $3.18 million.

The departmental spokesman credited its close working relationship with IBM for a successful transition that was “both complex and performed in a short period of time”.

“Handover of services from IBM took effect from 1 November 2012,” he said, noting that all services previously provided by IBM were now provided by Human Services staff.

“As part of the disengagement process, IBM provided ‘knowledge transfer’ workshops where DHS staff were able to gain detailed knowledge of the Medicare environment.

“Ensuring the transition was performed without impacting business was … a key challenge that was successfully accomplished.”

Human Services commenced detailed planning for the Medicare-IBM disengagement project in September 2011, after winning $373.6 million from the 2011-12 Federal Budget to integrate agency IT systems.

The so-called service delivery reform program aimed to consolidate Medicare, Child Support Agency, Centrelink and CRS Australia IT systems.

Human Services reported in October that it took back Child Support Agency’s systems in June, upon the expiry of the agency’s 12-year outsourcing arrangement with HP/EDS.

The department said this week that it had also begun work to move Medicare off a 11-year telecommunications contract with Optus and onto a consolidated, $474 million Telstra deal.

It did not expect “any significant disruption” to its operations, the spokesman said.