Delivering HealthSmart Report - VAGO

More documents

Recommendations

Info

Realisation of benefits from the HealthSMART program $ Figure 4A explains the HealthSMART Services operating cost profile and expected revenue shortfall. $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $- Figure 4A HealthSMART Services operating cost profile and expected revenue shortfall. $9,282,870 $23,459,734 42 Delivering HealthSMART — Victoria's whole-of-health ICT strategy $41,083,563 $60,989,718 2006/07 2007/08 2008/09 2009/10 Time Cost Revenue Cumulative subsidy Source: VAGO analysis, based on OHIS projections. Currently, HealthSMART Services is expected to incur expenses of about $75 million during the period 2006-10. Taking into account projected revenue from health agencies of about $8 million per year, the impact of this funding shortfall is that HealthSMART Services will require an additional $61 million (i.e., additional funding) to subsidise the arrangement until it reaches a viable scale. As for the situation with agency ICT infrastructure, there is no identified long-term funding source to sustain HealthSMART Services. This risks the ability to maintain a consistent and industry-standard service to the health sector. 4.4.3 Conclusion DHS did not have a reliable basis for estimating or defining agency contributions and whole-of-life costs. This means that DHS was not in a position to accurately estimate the total cost of ownership of HealthSMART systems and infrastructure, nor what level of contribution should, or could, be made by health agencies. The June 2006 program budget revisions resulted in DHS contributing an additional $35 million. This cost escalation was made in recognition of the inability of agencies to meet the original DHS expectations of co-contributions.
Realisation of benefits from the HealthSMART program If past patterns of ICT under-investment continue, some agencies risk not being able to keep their infrastructure up to date, and not fully benefiting from the investments made through the HealthSMART program. 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 and lead to under-utilisation of a strategic whole-ofsector ICT asset. Recommendation 4.2 DHS should adopt a whole-of-life asset management approach to ICT investment in the VPHS, so that agencies are able both to address obsolescence and to develop as appropriate their ICT capabilities and infrastructure with more certainty than the current funding models allow. Delivering HealthSMART — Victoria's whole-of-health ICT strategy 43
Page 1 and 2: V I C T O R I A Victorian Auditor-G
Page 3: The Hon. Robert Smith MLC The Hon.
Page 7: Contents Foreword .................
Page 10 and 11: Executive summary Through the Healt
Page 12 and 13: Executive summary • seek authoris
Page 14 and 15: Executive summary Budget revision m
Page 16 and 17: Executive summary The Secretary of
Page 19 and 20: 2 About the HealthSMART strategy 2.
Page 21 and 22: About the HealthSMART strategy BHIS
Page 23 and 24: 2.1.5 Program implementation timeli
Page 25 and 26: 2.1.7 How program costs were to be
Page 27 and 28: 3 Achievement against the approved
Page 29 and 30: Achievement against the approved pr
Page 31 and 32: Component Achievement against the a
Page 39: Achievement against the approved pr
Page 42 and 43: Realisation of benefits from the He
Page 53 and 54: 5 Monitoring and review of the prog
Page 55 and 56: Monitoring and review of the progra
Page 69 and 70: Auditor-General’s reports Reports

Delivering HealthSmart Report - VAGO

Create successful ePaper yourself

Delete template?

Save as template?