Australia's fragmented health technology procurement system is driving up costs, disadvantaging smaller software companies and diverting funding away from implementing digital health systems, according to the MSIA.
MSIA chief executive Emma Hossack says inconsistent procurement requirements across Commonwealth and state governments are creating unnecessary costs for technology suppliers and health services.
“Number one, I think procurement is in a mess, and number two, there’s just not enough of it in our industry,” she said at The Medical Republic and Health Services Daily’s AI and Hospitals Summit in Melbourne last week.
Ms Hossack argued that governments were failing to adequately fund the implementation and training required to make purchased technology effective.
“If they could all actually start funding implementation, not just software … it fails if it’s not implemented properly. We all know that,” she said.
This article originally ran on TMR’s sister site, Health Services Daily. TMR readers can sign up for a discounted subscription.
She questioned whether government procurement processes paid sufficient attention to patient outcomes rather than contractual requirements.
“How many of the contracts that are put together by bureaucrats actually look at the outcome?” she said.
Ms Hossack said software companies faced different insurance, privacy, cybersecurity and contractual requirements across jurisdictions, adding substantially to the cost of competing for government work.
Smaller Australian companies were particularly disadvantaged because they lacked the financial resources of multinational technology suppliers.
She also criticised government procurement contracts that could give purchasing agencies ownership of suppliers’ intellectual property, arguing that such arrangements discouraged innovation.
As a potential solution, Ms Hossack proposed using Commonwealth funding arrangements to encourage states and health services to adopt standardised procurement contracts.
“Follow the money. Always follow the money,” she said.
Related
She suggested Commonwealth funding could be used to require health services to adopt common contractual templates for health software procurement.
Standardising fundamental requirements, while allowing variations for specific circumstances, would reduce the costs of negotiating contracts and meeting different compliance obligations, she argued.
Ms Hossack identified insurance as one of the largest expenses facing software companies outside staffing, particularly professional indemnity and cyber insurance.
She called for nationally agreed baseline cybersecurity standards that could reduce uncertainty for insurers and suppliers.
The MSIA chief also questioned the cost and regulatory burden of new digital health compliance requirements, including those associated with electronic prescribing.
She argued that greater scrutiny of regulatory requirements, combined with standardised procurement arrangements, could reduce unnecessary expenditure.
“There’s also a lot of money, and that’s costing too much to procure, and that money would be much better spent on implementing and giving services to the patient,” she said.
The TMR and HSD summit was held in Melbourne on Thursday 29 October 2026.
