Media releases

March 9, 2004

Decision on IT systems replacement announced

Australia's largest private health insurer, Medibank Private, has finalised the outcome of its closed tender process seeking a vendor to replace its core IT legacy systems.

The tender process began in July 2003, when a select group of domestic and international vendors was invited to submit proposals for the Medibank Private Core Systems Replacement project.

Medibank Private Managing Director George Savvides said the process was the most extensive evaluation of IT systems yet undertaken by the fund.

"We are very conscious that our core systems platform is critical in supporting our corporate strategies and improving our product and service offering," Mr Savvides said.

"Given the significant financial commitment such an upgrade would involve, we undertook a comprehensive evaluation process, which was diligently supported by the participating vendors."

As a result of the evaluation Medibank Private determined that the proposals submitted did not adequately meet the business's needs.

Mr Savvides said that the size of Medibank Private's member base and the unique functional challenges posed by Australia's health system made it difficult for vendors to fully meet the health fund's selection criteria.

"As a prudent steward of our members' contributions, we needed to be 100% satisfied that we were investing in a core systems solution that would help us build a better health fund. It would have been irresponsible for us to commit funds if we weren't completely confident on this point," Mr Savvides said.

"However, Medibank Private remains committed to replacing its legacy systems, and will continue to review the market for further developments."

"This will be a major investment for Medibank Private and we want to ensure that our members' funds are used wisely to provide the greatest efficiency and range of services. Whilst we monitor the market, we also address critical short-term needs through enhancements to our legacy systems."

The closed tender process incorporated both independent Quality Assurance and Probity reviews. Under this process Medibank Private is obliged not to disclose the identity and proposals of the participating vendors.

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