United Nations Public Service Awards Case Studies

Prior to the implementation of ECLIPSE, interactions between doctors, hospitals, private health insurers and the government (Medicare Australia) for treatment of hospitalised patients took place almost exclusively by exchange of paper documents. This transfer of documents was labour intensive, time consuming and prone to error. So whether the papers were to confirm the patient’s eligibility for financial support from the government or health insurance fund, or they related to the lodgement of a claim, the processes were complex, disjointed and expensive.

The consequences of paper based interactions were:

• Poorer quality data;
• Delays in determining if a patient was entitled to financial support; and
• Delays in lodgement, processing and payment of claims.

There had been attempts by some of the larger private health insurers to address the issue of timely eligibility with the development of secure web sites to access this information. However, each private health insurer took a different approach to the problem and required different information from the practitioner or hospital. This did not resolve the underlying issue, and often caused its own problems where the differing responses were misinterpreted.

Medicare Australia had also implemented an EDI based claims process with the private health insurers to improve the claims processing and payment times; however, this was still manually intensive as the original claim had to be entered into the private health insurer’s system before it could be transmitted electronically.

Each of these issues diminished the perceived benefits of private health insurance and the private health sector. In the view of the Department of Health and Ageing, this resulted in declining membership for the private health insurers, and increasing premiums and out-of-pocket expenses for patients as medical practitioners and hospitals raised fees above those paid by the funds.

This had a flow-on effect on the public hospital system with increased waiting times and a decline in the quality of care.

What is the initiative about? (the solution)
The ECLIPSE initiative has enabled Medicare Australia to implement a solution that addressed the main areas of concern; data quality, eligibility and claims and payment. Medicare Australia has achieved this outcome through the implementation, in collaboration with the private health sector, of a secure Internet e-business system that links medical practitioners, hospitals, private health insurers and Medicare Australia for the purposes of timely and accurate data transfer for eligibility checking, claims and payments. The impact of ECLIPSE on the private health sector has not yet been fully realised. Of the 37 private health insurance funds in Australia, 30 of the funds, representing 90% of the privately insured population, have adopted some or all of the functions of ECLIPSE. Because of the delay by some major funds, the adoption of ECLIPSE by medical practitioners has been slower than expected, as many of their patients are members of these funds. Despite this delay, feedback from those private health insurance funds that have implemented ECLIPSE indicates that: • the rejection of claims due to incomplete or inaccurate data has decreased from approximately 40% to less than 2%; • the quality of patient data, held within medical practitioner and hospital systems has improved significantly; and • the time taken to receive a response is significantly reduced. This has been evidenced by the continued investment being undertaken by major private hospital groups and individual hospitals which view ECLIPSE as a major enhancement of their patient administration systems.

Who proposed the solution, who implemented it and who were the stakeholders?
The ECLIPSE initiative was originally proposed by one of Australia’s largest private health insurers, to address the existing paper-based and complex processes involved in the lodgement and payment of private health claims. In early 2003, Medicare Australia, in collaboration with industry stakeholders, prepared a business case which identified significant savings to the private health sector if a full e-business system for eligibility, claims and payments was introduced. The business case proposed the development of a full e-business system that could be integrated with the existing systems used by stakeholders to provide a single, consistent process across the private health sector. Medicare Australia approved the business case in June 2003, and in August 2003 the ECLIPSE project team commenced work on the system design. The ECLIPSE initiative required significant stakeholder engagement by Medicare Australia to establish the overall system requirements. This consultation process involved 85 stakeholder groups from private health insurance, public and private hospitals, medical practitioners, medical practice managers, State health departments, State Area Health Services, the Federal Department of Health and Ageing, the Federal Department of Veterans’ Affairs, consumer groups and other government agencies associated with privacy and competition. The outcome of this stakeholder engagement was a Stakeholder Vision document which detailed the needs of the private health sector and defined the system requirements. In determining how the system was to be delivered, Medicare Australia released a public Request For Proposal to the information technology sector seeking an existing system that could meet the private health sectors requirements. As none of the responses met the requirements, Medicare Australia, with the support of stakeholders, built the ECLIPSE system. This approach has enabled Medicare Australia to provide a single electronic system for Medicare and private health insurance programs that can be used by the entire health sector.

Describe how and when the initiative was implemented by answering these questions
a. What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The strategy was for Government to work closely with industry, including software vendors, to ensure delivery of an industry designed and agreed product. This ‘partnership’ arrangement was continued through the development phases. The main objectives of the ECLIPSE initiative were to develop and implement a system that permitted: • A patient’s Medicare and private health insurance eligibility to be determined, which allows the patient to make Informed Financial Consent before treatment; • The creation and lodgement of medical and hospital claims using data contained in patient management and administration systems; • The assessment, payment and reporting of claims information to be immediately updated into electronic records; and • The system to be enhanced as needed. The strategy adopted for the ECLIPSE initiative to meet this requirement involved the extension of an existing e-business product, Medicare Online, developed by Medicare Australia in 2001. This strategy offered a number of advantages for the private health sector, particularly medical practitioners, hospitals and medical software vendors, as it allowed a single software product to be used for Medicare and private health insurance claiming and information purposes, and still allowed medical software vendors to tailor their products according to the need of their clients. This strategy also allowed Medicare Australia to meet the requirements of a very diverse industry, in terms of the complexity of the technology needed for individual workstations, personal computers, and corporate server environments. The design and integration of the product with existing medical software products allowed medical software vendors to retain their existing system interfaces and reduced the need for extensive retraining of staff, which would have been needed if a separate system was developed. The ECLIPSE initiative was established in May 2004 under a Federal Government Budget Appropriation titled the eCommerce Partnership in Private Health. This was established by the Federal Department of Health and Ageing with administration and development of the initiative delegated to Medicare Australia.

b. What were the key development and implementation steps and the chronology? No more than 500 words
Development and implementation of the ECLIPSE initiative has followed a structured approach commencing in January 2003 with the development of the Simplified Billing New Claiming Model Business Case. This Business Case was approved by Medicare Australia in June 2003 and enabled the establishment of a dedicated project team to support the initiative. Following the formation of the project team Medicare Australia, on 1 August 2003, commenced a period of stakeholder engagement to develop a Stakeholder Vision for the system. This document formed the basis for the requirements contained in a Request For Proposal which was released to industry in late October 2003. By February 2004, all responses to the Request For Proposal had been evaluated by an independent organisation, Deloittes Consulting, on behalf of Medicare Australia. The evaluation report provided to Medicare Australia illustrated the lack of any existing systems that could deliver the specified business functionality. Medicare Australia then consulted further with stakeholders who requested that Medicare Australia consider undertaking the development by extending its existing Medicare Online e-business system. Medicare Australia accepted this proposal and commenced development. The development phases undertaken to date, and the business functionality delivered, have been: • Phase 1 – commenced in March 2004 and delivered online patient eligibility verification, in-hospital medical claiming and the ECLIPSE Server Adaptor, a software product designed for corporate server environments. Development and testing of this phase was completed and delivered to industry for integration in July 2004. • Phase 2 – commenced in June 2004 and delivered multi-patient online patient eligibility verification, in-hospital patient claiming, ECLIPSE remittance advices for medical practitioners and private health insurers and security support for Macintosh and Linux operating systems. Development and testing of this phase was completed and delivered to industry for integration in April 2005. • Phase 3 – commenced in February 2005, and delivered online eligibility checking, Federal Department of Veterans’ Affairs claiming for medical and pathology, two-way agency claiming and concession entitlement verification.. Development and testing of this phase was completed and delivered to industry for integration in October 2005. • Phase 4 – commenced in June 2005, and delivered in-hospital (accommodation) claiming. Development and testing of this phase was completed and delivered to industry for integration in February 2007.

c. What were the main obstacles encountered? How were they overcome? No more than 500 words
Medicare Australia encountered a number of obstacles in developing and implementing the ECLIPSE initiative. The main obstacles facing the ECLIPSE initiative were: • The need for many of the private health insurers to change internal business processes to align with the agreed industry standards During the initial requirements phase, representatives from the private health insurers identified that without agreed and standardised processes it would not be possible to develop a single solution which would meet the needs of the industry. As a consequence, while agreement was reached on these standardised processes by the industry, many of the private health insurers were required to undertake significant lead-in activities before being able to adopt ECLIPSE. • The need for some private health insurers to upgrade their system environments to enable the integration of ECLIPSE This has been the greatest obstacle to the implementation of the ECLIPSE initiative. The two largest private health insurance funds in Australia, Medibank Private and MBF, have both undertaken major core system replacement programs. As a result, neither of these private health insurance funds has implemented the ECLIPSE initiative for the primary business functions. This has impacted on the take-up of the system by medical practitioners and private hospitals. • The lead time required by medical software vendors to integrate and release ECLIPSE enabled versions of their software products This is a major obstacle to the rollout of ECLIPSE enabled practice management and patient administration software. On average medical software vendors require three-four months development time before the latest release of ECLIPSE business functionality can be provided to medical practitioners and private hospitals. This has resulted in many medical practitioners not updating their software and therefore limiting the benefits that the ECLIPSE initiative can provide to their practice and patients. • The need to change providers’ claiming environments to encourage greater use of electronic claiming.

d. What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
In developing and implementing the ECLIPSE initiative Medicare Australia required the ongoing collaboration of the private health sector which meant the investment of significant human resources, time and budget from all stakeholders. Stakeholder involvement ranged through Medicare Australia’s executive, business and technical areas with their involvement in: • The ECLIPSE Governance Board, chaired by Medicare Australia, and consisting of executive representatives from the private health insurance industry associations, the Federal Department of Health and Ageing, the Federal Department of Veterans’ Affairs, the New South Wales State Health Department, the Australian Private Hospitals Association and the Australian Medical Association. The ECLIPSE Governance Board was responsible for overseeing the strategic direction of the initiative, the marketing of the initiative and the review of each phase of development. • The ECLIPSE Reference Group, chaired by Medicare Australia, and consisting of business and technical representatives from the private health insurers, the private hospitals, medical practice managers, the Department of Health and Ageing, the Department of Veterans’ Affairs and the medical software industry. The ECLIPSE Reference Group was responsible for the development and approval of the detailed technical designs and specifications for each phase of development. The ECLIPSE Reference Group reported to the ECLIPSE Governance Board and interacted directly through the Reference Group chair with Medicare Australia’s ECLIPSE Project Team. • The ECLIPSE Project Team, established within Medicare Australia, consisted of a project manager and seven specialist sections responsible for business, technical, testing, support, policy and operations, marketing and communications, and administration. This team comprised approximately 70 staff and reported through the project manager to a Medicare Australia e-business Executive Committee. The initial business case and stakeholder engagement phases of the ECLIPSE initiative were funded by the Federal Department of Health and Ageing. When the overall scope of the initiative was agreed, Medicare Australia sought direct funding from the Australian Government for the development and implementation of ECLIPSE. In the 2004/2005 Federal Budget Medicare Australia received $54.6 million to develop and implement the ECLIPSE initiative over a four year period.

Is the initiative sustainable and transferable?
The ECLIPSE initiative is highly sustainable and transferable across a broad range of programs. The infrastructure and architecture developed for the Medicare Online/ECLIPSE systems was designed to be highly scalable, and adaptable to a wide variety of different business applications. The basic design of the system has already been successfully adapted within Medicare Australia for use with: • the Pharmaceutical Benefits Scheme; and • the Aged Care Online Claiming program. The system could, if required, be further developed as the basis for other aspects of the Australian health-care sector including electronic health records and allied health services claiming. Medicare Australia has demonstrated this initiative to a number of visiting international delegations from New Zealand, Hong Kong, Singapore and the Philippines, all of which have similar health e-business requirements.

What are the impact of your initiative and the lessons learned?
The lessons learned from the development and implementation of the ECLIPSE initiative have included: • Limiting the number of system changes In delivering the ECLIPSE initiative Medicare Australia took a phased approach to developing all required business functionality. This had an impact on medical software vendors and private health insurers as it forced these organisations to maintain an ongoing development process over a period of years to ensure that they were able to deliver the full business functionality. This increased the cost and implementation timeframe for these organisations and therefore affected the timely take-up of the system by medical practices and private hospitals. • Ensuring engagement with all sectors of the user community, e.g. hospitals, providers and software vendors. • Understand that players are at different stages of development and readiness across the sector, and therefore allow time for take-up. It doesn’t happen immediately.


Institution Name:		Medicare Australia
Institution Type:		Government Agency
Contact Person:		Catherine Argall
Title:		Chief Executive Officer
Telephone/ Fax:		61 2 61246300
Institution's / Project's Website:
E-mail:		catherine.argall@medicareaustralia.gov.au
Address:		134 Reed Street North
Postal Code:		2900
City:		Canberra
State/Province:		ACT
Country:		Australia

The Problem

Solution and Key Benefits

Actors and Stakeholders

(a) Strategies

(b) Implementation

(c) Overcoming Obstacles

(d) Use of Resources

Sustainability and Transferability

Lessons Learned

Contact Information