Health confronts ghosts of failed govt IT projects in Medicare payments rebuild

April 26, 2017

There is a graveyard bigger than Rookwood Cemetery filled with the cadavers of failed government IT projects and haunted by the ghosts of scope creep, budget blowouts, frustrating delays and second rate outcomes.

It is a fate the Department of Health (DOH) will be dearly hoping it can avoid as it pushes ahead to completely reimagine its 30-year-old IT payments system, a system which underpins Medicare, aged care and veterans’ payments and the Pharmaceutical Benefits Scheme.

The project is still in its early stages. The Request for Information (RFI) went out in March this year as the government gathers as many ideas as it can from tech companies of varying sizes to design, deliver and integrate its digital payments platform, a project that will have multiple phases over the next five years, while keeping its procurement options open.

Vendors are likely to be salivating at the chance to score a lucrative, long-running contract which has about the highest public profile there is for a federal government IT project, perhaps surpassed only by the Department of Human Services’ $1 billion, seven-year Welfare Payments Infrastructure Transformation (WPIT), due for completion by 2022.

But it will not be easy money. It is not a straight forward task to disentangle the current system, which has over 200 applications and 90 databases and supports more than 600 million payments worth approximately $50 billion every year.

The Health Department cannot afford to slip up because if it does it will do so very publicly. The multi-million dollar transformation is an endeavour that will affect around 99 per cent of Australians who use the digital payments platform in one way or another.

CEO of business management company Holocentric, Bruce Nixon, who has worked with government clients such as the ATO, NSW Transport Management Centre, Sydney Water and IP Australia, says now is the right time to do it, before the labyrinthine system gets even more complicated.

“It’s pretty exciting and it is long overdue. It’s a good time to be doing it with new technology available,” Mr Nixon says.

“It is very difficult to integrate everything into the application so there are more and more layers on top and they become more and more complex and unwieldy.

“There does come a time where it makes sense to overhaul the system and replace it with something more modern that allows changes.”

Time is also limited so DOH has little choice but to act. Gary Sterrenberg, CIO of the Department of Human Services, which manages health payments for DOH, has said in the past that the current system has only about three years left before it is totally cactus.

There is no doubt that DOH needs to get on with it but it needs to do it well. 



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