Delivering HealthSmart Report - VAGO

Executive summary
Budget revision means greater subsidy by DHS
DHS did not have a reliable basis for estimating ‘whole of life’ costs arising from the
program, or for defining agency contributions.
It also did not seek to identify whether agencies were able to meet their anticipated
contributions.
This means that DHS was in a position neither to accurately estimate the total cost of
ownership of HealthSMART systems and infrastructure, nor to estimate what level of
contribution should, or could, be made by health agencies.
Revisions to the program budget were made in June 2006, resulting in DHS
contributing an additional $35 million. This DHS cost escalation was made in
recognition of the inability of agencies to meet the original DHS expectations of cocontributions.
No source of sustainable ICT investment for health agencies
The ability to plan and accommodate HealthSMART costs is dependent on the viability
of individual health agencies. While some agencies have sufficient reserves to pay for
their share of implementation expenses and ongoing costs, others have struggled.
Adequate funding of ICT infrastructure within health agencies is an ongoing challenge
within the sector, as ICT competes for funds with general medical equipment, which is
given priority due to its clinical ‘patient facing’ usage.
If the past patterns of ICT underinvestment continue, some agencies will not be able to
keep their infrastructure up to date and are at risk of not fully benefiting from the
investments made through the HealthSMART program.
Delays mean greater subsidy of shared services
Delays in implementation of applications will mean that the HealthSMART shared
services arrangement will have to be subsidised by an extra $61 million until enough
agencies have implemented HealthSMART applications.
This could divert significant funds from DHS service delivery budgets and lead to
underutilisation of a strategic whole-of-sector ICT asset.
Recommendations
• DTF and DHS should work with the VPHS implementing agencies to develop
an evidence-based business case, in line with current better practice
guidance, to better assure the effective delivery of the incomplete components
of the HealthSMART program.
6 Delivering HealthSMART — Victoria's whole-of-health ICT strategy