Health brainstorms new IT system for Medicare and aged care payments

The Department of Health (DOH) is brainstorming the overhaul of its ancient IT systems which together deliver more than 600 million health, aged care and veterans’ payments annually to 99 per cent of Australians.

Health issued a Request for Information (RFI) earlier this week asking companies, including small and medium-sized ones, for their input and advice on designing and delivering the new Digital Payments Platform to replace the current one, which has evolved over 30 years.

The current system is incredibly complex and supports a huge range of payments including the Pharmaceutical Benefits Scheme, Medicare, aged care and related veterans’ payments, totalling around $50 billion.

“The Medicare systems alone comprise over 200 applications and 90 databases, many of which are ageing and based on obsolete technology,” say the RFI documents.

The government is under no illusions that the current system is broken and needs replacing.

“The current systems have become increasingly complex with a tightly coupled and inflexible architecture,” says the RFI.

 “The systems are no longer fit for purpose. They are unable to support the level of flexibility and service innovation that users – individuals and providers – and the government expect.”

There are a number of bespoke applications, all with different authentication processes for consumers and providers.

“Just as Australian families have upgraded their computers since the 1980s, the time has come for the government’s health payments systems to do the same,” the government said.

“The RFI provides an opportunity for respondents, including small and medium enterprises, to shape the future design of the new system which the Australian government will continue to own, operate, and deliver.”

Reforming the payments system is a touchy subject after the attention it received during the 2016 federal election.

Opposition Leader Bill Shorten seized upon the possibility of Medicare payments being outsourced to run his ‘Mediscare’ campaign during the 2016 federal election, suggesting it was a Trojan horse to privatise Medicare itself.

The Department is at pains to point out that the federal government will continue ‘to own, operate and deliver’ the payments as its asks for outside input.

“For the avoidance of doubt, the government is not seeking proposals for outsourcing,” it states.


Content of the RFI

In the RFI respondents are asked to estimate the cost of designing and building the new system and implementation and transition costs over five years; as well as how much it will cost to run.

The RFI is stage one of the project, stage two is the procurement phase of the Digital Payments Platform. The RFI will not be used to shortlist any suppliers for stage two procurement.

The DOH will be sizing up potential partners to get an idea of the level of interest, capability and capacity in the market and different procurement options.

The project will involve multiple phases over several years and will need to be able to adapt and grow to new payments and legislation.

The RFI mentions that interested parties should be able to demonstrate how ‘progress could be achieved by early 2019’.

“The vision for the program is to deliver a new Digital Payments Platform that supports a digital-first (or digitally enabled) service delivery business model and simpler, faster, easier services for users,” it said.

DOH said it designed the RFI in consultation with users, health and aged care providers and other stakeholders.

The deadline for respondents is April 4 and a procurement phase for the new digital payments platform will start in mid-2017.

Meanwhile, the new multi-billion dollar DHS payments system, Welfare Payments Infrastructure Transformation (WPIT), responsible for processing more than $100 billion Centrelink payments annually, including payments like Austudy and Youth Allowance, is also being radically reimagined over the course of the next seven years. 


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