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Forging links between rural health service providers : the mechanics of a spectacular success

This paper examines the decision to appoint a CIO to the South West Alliance of Rural Hospitals with responsibility for ICT initiatives within the region and the impact this had on the ICT strategy that emerged. Since there was no formal ICT infrastructure in place that was shared by the independent service providers in the region it was felt from the outset that the provision of shared services would provide the key to establishing regional cooperation. The paper briefly describes the communications network that emerged between 1999 and 2002, it pays some attention to the implementation challenge but rather than dwell on the implementation problems the paper examines the implications of the approach taken. The emergence of the truly virtual health care network in Victoria’s South West holds a number of useful lessons for the delivery of rural, regional and remote health care.. Background to the case The continued growth in the availability and power of information technologies empowered by a parallel explosion in communications technologies has resulted in the radical reshaping of business strategy and the shape of organisations addressing these new strategies. Mindful of this in 1997 the Health Department of Victoria (DHS) felt that some action was needed to ensure the Acute Health sector was appropriately structured and making appropriate use of ICT. KPMG was engaged to prepare an ICT strategic plan, which had the prime objective of identifying if a significant investment in ICT could reduce the costs of delivering Health services. The KPMG ICT plan as presented to the Victorian State Government in 1997 proposed a capital injection of $400 million with the aim of saving 3.5% of the Healthcare Budget per year within four years. The strategy split Victoria into 14 health regions (5 Rural and 9 metropolitan). Each region would have a CIO appointed with a clear charter to implement the strategy in that region. In practice only $100 million was made available over the four years but immediate operating budgets were cut on average by 1.5% on the expectation of the planned savings. So this initiative was never fully funded, but it was locked in by the assumed operating savings factored into hospital budgets. This paper examines the approach taken by one of the 14 groups established, the South West Alliance of Rural Hospitals (SWARH). The model established in the south west is being adopted or examined closely by most of the other rural groups in Victoria and the SWARH model is also being examined by