Multibillion money machine kept health going in Covid-19
BRISBANE – Australia’s healthcare system and its frontline workers perform miracles daily. Behind the scenes, coordinating the cash for what is the third largest line item in the federal budget is something of a marvel itself.
The sums involved are enormous and must be delivered securely, seamlessly and transparently.
That’s where the National Health Funding Body comes in. It co-ordinates $60bn in state and federal funds across 143 hospital networks with 690-plus public hospitals annually, delivering 41 million services to the Australian public.
Those payments are co-ordinated by a team of just 30 full-time equivalent staff and, until recently, were processed using a “clunky, cobbled-together” system built in haste in 2012 by the then department of human services.
For NHFB chief executive Shannon White, upgrading the system was his No.1 priority when appointed to the role in 2018.
“We couldn’t control the users that had access to the system,” White says. “That was controlled by Human Services.
“We couldn’t run reports from the system, we had to take manual offline reports to be able to do reconciliations, and we couldn’t generate the payment files we needed to send to the Reserve Bank of Australia.” (The RBA handles transactions between state and federal governments.)
The unfit-for-purpose system was not only a security risk but an operational one.
“One of the things that almost happened to one of my predecessors is they almost failed to make a payment, which meant that a state health department was at risk of not being able to pay all their frontline health employees through their payroll run,” White says.
The NHFB was in urgent need of a solution. One option was an $8m enterprise software solution provided by a large multinational consultancy. The build time was two years and would cost another $1m a year to run.
Brisbane-based Software as a Service provider TechnologyOne also bid for the contract. Its costings came in at a quarter of the alternative bid and the build time was just six months, with an additional three months added to enable co-design with states and territories.
For White, it was a no-brainer, and the fact it was being conducted by a home-grown company a pleasant surprise.
“It was just such a compelling business case,” White says. “But having a Canberra office about three streets away from where we were definitely has helped, as has having a team in Brisbane for a quick phone call to tap into the expertise and knowledge in that office to troubleshoot any issues. It wasn’t something I thought about beforehand but it has definitely come in handy since then.”
The consultation process meant state health departments collaborated to co-design the payments system, reducing implementation friction and generating goodwill. The project was not only delivered on time but also was timed perfectly. The new system came online just as Covid-19 struck the country, placing enormous pressure on the health system.
Facing a logistical crisis, the government called on the NHFB to administer the National Partnership on Covid-19 Response, seeing an extra $14.7bn paid to states and territories to support them financially for PCR testing, state-run vaccinations, emergency stockpiling of personal protective equipment, securing private hospital beds, staff and intensive-care unit beds for any surge capacity, and cleaning across hospitals, schools and public transport.
“Had we still been on the old payment system, there’s no way we could have done that work,” White says.
Since the new system was put in place in 2019, the NHFB has processed a quarter of a trillion dollars in payments and conducted more than 4500 transactions throughout the year, often as large as $2bn.
White’s key concern – security – has been satisfied, with the solution offering full user control with multi-factor authentication, encryption on payment files for antitampering, and best-in-class cyber security accreditation.
“On the security side, it’s fantastic,” White says. Another benefit to NHFB’s vision has been improving the transparency of public hospital funding in Australia.
As the “single source of truth” on public hospital funding, the NHFB needs to publish timely, up-to-date information. Previously, a single month’s report used to take five months to publish.
Since the change, the body takes less than three weeks to produce a month’s report, something it has achieved for the past 30 months in a row.
White says it is a fantastic productivity improvement that has freed up staff by eliminating basic processing to allow trend analysis and broader financial projections.
“It means less of the manual work and more of the thinking work,” something White says he believes is critical in the face of rising healthcare costs.
Having helped co-ordinate the Covid-19 response, White is acutely aware of the challenges the health supply chain experienced, and that has cemented, in his mind, the importance of building local resilience to deal with future crises. He sees working with, and building up, local companies as part of that process.
“In the Covid-19 pandemic we saw a pivot back to building national capability and supporting domestic industries across the country,” he says.
“So I think building up local companies is a good thing.”
Reproduced with permission from The Australian.
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