Government won’t outsource Medicare payments system: Turnbull

The rollout and management of an updated Medicare payments system will not be outsourced to the private sector, prime minister Malcolm Turnbull reaffirmed last night.

When asked on the QA program if the government had given up on privatising the payments system, Turnbull said there had been consideration of revising the platform, which is 30 years out of date.

In 2014, the government called for expressions of interest to replace old infrastructure that is used to process around $19 billion in medical benefits claims annually.

But Turnbull said that no decision had been made, or no proposal accepted, to undertake any revision of the system.

“I am saying to all Australians … that no part of Medicare that is delivered by government today will be delivered by anyone else in the future,” he told the audience.

He confirmed that this includes the payment system, which he said needs to be updated to get to the ‘smartphone era’.

We will revive it, or renew it, we will modernise it and we will do that within government,” he said.

Turnbull went on to say that he doesn’t have an ideological view about outsourcing government services.

“But I am very skeptical about the way in which very large IT services have been outsourced to big systems integrators in the past. And the efficiencies have often been less in reality than they were in promise,” he said.

Turnbull said that this is why he set up the Digital Transformation Office (DTO) as an agency to operate like a start-up, intended to revive and renew government online services from within rather than signing contracts with big system integrators.

“Medicare’s payment system will not be outsourced, full stop. And I am not an unqualified fan of outsourcing at all and if I wasn’t an unqualified fan, I would never have set up the Digital Transformation Office.

“You can see from my deeds what I am saying to you is a matter of genuine conviction, that what we have to do is … bring government into the 21^st century, and bring government services into the 21^st century.

“You don’t do that solely by pushing them all out the door so that there is nothing left inside government. There’s a lot of innovation that can be done inside government if you provide the right leadership and the right culture,” Turnbull said.