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’20k jobs at risk’: government seeks interest in claims processing

The Community and Public Sector Union fears the loss of 20,000 public service jobs as a result of moves to privatise some of the functions run by the Department of Human Services — with no official word to the public servants likely to be sacked.

An advertisement published today in The Australian Financial Review seeking private sector expressions of interest to run the Medicare, Pharmaceutical Benefit Schemes and Department of Veterans’ Affairs payment and claims systems has the union concerned that the work, currently undertaken by Human Services, will be fully privatised.

The Department of Health’s ad said the Medicare and PBS claims involve the annual movement of $29 billion as a result of 600 million individual transactions, which has experienced steady growth over the last three years. For DVA, there are more than $2 billion in claims moved annually as a result of more than 33 million transactions:

“We are seeking dynamic and innovative commercial solutions capable of providing these claims and payment services with a high degree of efficiency and integrity and which are adaptive and responsible to ongoing changes to the underpinning policies aimed at improving Australia’s health system.”

The department is seeking a commercial partner with considerable experience in calculating entitlements, processing payments, reporting on activities and disbursements and delivery of client services with a focus on meeting customer expectations.

The expressions of interest will be open until August 22 as a market test. The department has not confirmed whether the decision has been made to fully privatise or conduct a trial.

CPSU national secretary Nadine Flood said the move could cost up to 20,000 jobs, and affected staff were “stunned and appalled” at the news. The community will “pay more and get less” from Medicare, she said in a statement:

“This is another part of the Abbott Government’s plan to murder Medicare. Medicare is a highly effective key part of Australia’s great public health system, yet this Government is determined to dismantle it and sell the profitable bits to its big business mates. It is absolutely shocking.”

“It’s even worse they’re doing it without a word to the community or to thousands of Medicare workers whose jobs are in the firing line. The first we hear of this is a tender to sell off Medicare. This is a nasty, sneaky move by the Abbott government.”

Requests for clarification of the changes were referred to the Department of Health. The Mandarin has sought confirmation of the scope of the expression of interest proposal and what alternatives are being considered.

UPDATE (August 8, 4.40pm):

Minister for Health Peter Dutton has released a statement confirming the expression of interest is part of a proposal to privatise the claims and payment services in the 2014-15 federal budget, designed to streamline and simplify systems for patients, doctors and other health providers:

“The current IT systems that manage the claims and payments processes are dated and in need of a substantial upgrade. In these circumstances it is good process to review and test existing and alternative systems. The market test will determine the level of private sector interest and capability in providing those IT services for both the Department of Health and the Department of Veteran’s Affairs.”

The EOI process will guide the decision making of government to whether the commercial sector can deliver the processes with greater efficient, flexibility and agility. No face-to-face services provided by Medicare will be included, he said.

Author Bio

Harley Dennett

Harley Dennett is editor at The Mandarin based in Canberra. He's held communications roles in the New South Wales public sector and Defence, and been a staff reporter for newspapers in Sydney and Washington DC.