On 8 August 2014, the Australian Government’s Department of Health invited industry to submit dynamic and innovative commercial solutions to provide Australians with convenient, efficient and secure ways to claim their annual $32 billion in medical and pharmaceutical benefits.
The government is in fact the largest purchaser of products and services in Australia and holds the key to breaking up highly concentrated markets. Imagine if the Department of Health structured procurement in such a way that multiple providers, big and small, were invited to continuously compete for the most innovative and efficient way to deliver the requested public services? Giant players like Australia Post or Telstra would be forced to compete and that along side with new competitors like Tyro, entering the market with disruptive solutions.
Today, Tyro Payments submitted to the Department of Health this approach which has been successfully implemented with Medicare Easyclaim, a real-time rebating solution that successfully marries security, stability and low risk with efficiency, innovation and competition. Tyro, ANZ, CBA, NAB and Suncorp provide this service. Tyro, the market leader in this space, credits the Medicare rebate in 11 seconds to the patient’s bank account at the end of the practice visit. This successful approach relies on three basic ideas:
- The architecture of the service delivery is “as a scheme” with set rules which allow private enterprise to develop their own solutions to meet the Department’s requirements. This architecture is vitally important since it creates competitive tension among private solution providers (innovation).
- The business requirement definition reflects a deep understanding of the user needs and perceptions which create rapid acceptance and thus the benefits the Department seeks flow quickly (acceptance).
- The EasyClaim-type solution fits into existing systems and procedures so that it could be developed as a discrete module without the need to modify the entire system (modularisation).
The Australian financial payments industry provides an infrastructure that is ideally suited to satisfy the payment side of the benefit claims and payment requirements in terms of security, privacy, access and ease of use. The Department of Health has an opportunity to re-invent the payments side of its benefit claims and payment service delivery by establishing an “Australia Government Scheme”. The approach is similar to the established business models, policies and procedures of the international schemes like Visa and MasterCard or the domestic scheme eftpos Payment Australia Limited.
The goal would be to sign-up Australian banks to deliver real-time payment and information services on behalf of the Department of Health processed through the existing Australian clearing and settlement systems and through the EFTPOS network. This proven and low cost infrastructure exists today and connects the providers’ points of business to providers, patients and consumers.
The government would benefit from the immediate coverage of Australian citizens through the issuing banks and the coverage of Australian health providers and their software providers through the acquiring banks. The banks provide as a standard business practice card holder and provider authentication and information.
Tyro would be very keen to compete under a panel arrangement with level playing field accreditation and commercial terms providing the payment and related information services under a scheme-type arrangement. Its acquiring and integration technology is ideally suited to deliver solutions in partnership with the software industry with minimum time-to-market.
Tyro Payments and our ancillary and primary health practice management system, as well as pharmacy point of sales software providers, would be very keen to be able to provide medical and pharmaceutical benefits claims process and payment services as part of our solutions to the health industry.
It is a big opportunity for Government. And it is timely, Australians want more competition.