WA Health inks $75 million outsourcing deal

The Western Australia Department of Health has extended its information management alliance contract with Fujitsu Australia for another five years.

The renewed contract with the InfoHealth Alliance Consortium is worth $75 million and extends the contract through to June 2010.

Under the deal Fujitsu Australia will oversee an applications and infrastructure overhaul to support more patient-friendly health services.

The contract supports the Western Australia government's $1.7 billion capital commitment to improve health services in the state, including a $335 million capital injection for an information and communications technology upgrade.

The increased funding supports the recommendations made by the Health Reform Committee last year and follows a performance review of the department's initial five-year contract with Fujitsu.

An independent benchmarking study was also carried out by analyst firm Meta Group.

The InfoHealth Alliance is aiming to replace separate sets of patient records at individual hospitals with a centralized model.

WA department of health acting director general Dr Neale Fong said the new contract includes the delivery of a range of core clinical and corporate applications, including the management of public patient data across the state.

Fujitsu A/NZ CEO Rod Vawdrey claims the company is the only IT company with a consistent footprint in the healthcare sector at both the state and federal level across Australia.

In contrast to traditional IT outsourcing agreements which lock the parties into a set of agreed deliverables, the Alliance is a co-sourcing arrangement with a high degree of flexibility to change priorities and services. Under the agreement Fujitsu will lead a consortium of companies and can engage third-party providers to access the best capabilities in the market.

"We call this an 'open book' model," Vawdrey said. "It is an ideal approach to outsourcing for the public sector because it provides better cost visibility as well as the flexibility to ensure the investment is always going towards the highest priorities."

The WA Department of Health first worked with Fujitsu Australia in June 2000 to consolidate and stabilize its information technology systems.

Significant system outages have been reduced from around 70 per month to a few and the goal over the next five years is to reduce support and maintenance costs and redirect them to new infrastructure and systems renewal projects.

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