Plan for private companies to operate hospital computers

Major efficiency improvements will be achieved and millions of dollars in savings made in Perth's public hospitals under a radical plan to use private companies to upgrade and operate their computer networks.

Deputy Premier Ian Taylor said the decision to contract private companies to maintain and operate the computer network would mean health funds could be directed towards better patient service and at the same time provide a boost for a major expansion in the local computer industry.

Mr Taylor said his Department of State Development was assisting the Health Department examine the provision of computer facilities in Perth's hospitals.

"The concept they have created is exciting and will help the hospital system while encouraging major computer companies to invest in Western Australia.  Once they have developed the technology and systems they will have the chance to sell similar services overseas," Mr Taylor said.

The plan - approved by Cabinet - reflected the economic initiative outlined in the State Government's 'WA Advantage' to encourage direct private sector involvement in the provision of infrastructure.

A number of major computer companies were now being asked to submit proposals for the project, which would be one of the first of its kind in Australia.

"While the computer networks will be contracted out, there will be no loss of jobs in the health system - in fact the program will create jobs in the IT industry," Mr Taylor said.

The Minister said under the terms of the contract the successful supplier would also be required to develop new programs for the existing hospital computer network including a system to streamline management of many aspects of clinical care.

"The decision to seek private sector participation has been caused both by the need to contain rising costs and the potential for the computer industry to supply such infrastructure," Mr Taylor said.

"In broad terms, WA's metropolitan public hospitals faced the prospect of having to spend at least $50 million over the next five or six years to update and expand their integrated computer network.

"Postponing the installation is not an option. Advanced computer systems are now so essential to the efficient management of hospitals that the State would be faced with multi-million dollar cost increases if we did not have them.

"One way to minimise the State's outlay is to seek private sector involvement.

"In this way the cost to the hospitals can be spread over a longer period and Government funds can be redirected to provide a better service for patients and to other important areas.

"Of course hospitals would still have to pay for the use of such a computer network, but we anticipate that the expense would be far less than if the hospitals owned it."

Mr Taylor said the advantages of this so-called 'outsourcing' arrangement were not purely financial.

As part of the contract, the successful supplier would be expected to ensure the network was always making use of the most cost-effective technology.

He said it would also be necessary for the successful supplier to research and develop new information systems to meet the expanding needs of the hospital service.

"In operation it will still be the doctors, nurses and hospital administrative staff who will operate and access the computer network," Mr Taylor said.

"The only difference will be that a consortium of private companies will have responsibility for ensuring that the network is always functioning effectively."

Mr Taylor said a selection committee drawn from the Health Department, Treasury, the Department of State Development and the hospitals would be responsible for selecting the successful supplier.

"We expect the new system will begin before the end of the year," he said.