Aged care’s $300M tech gamble: A costly digital trap?

Is the Federal Government falling into a classic corporate software trap as the true costs of implementation unfold – lured in with a $13.5 million contract, only to now find itself on the hook for what has become a $150 million piece of software? 

The much-needed digital overhaul of aged care has ballooned to almost $300 million, with providers and taxpayers footing the bill.

Initially promised as a solution to streamline compliance and improve care, the Government Provider Management System (GPMS) – built on Salesforce technology – has become yet another case study in tech giants embedding themselves deep into government systems, only to hike the price once dependency is locked in.

With the full rollout now delayed and concerns about sector readiness mounting, is this massive investment truly delivering value, or has aged care been caught in a high-cost tech spiral?

Key points

• The Department of Health and Aged Care is implementing the Government Provider Management System (GPMS), a comprehensive platform built on Salesforce technology, to enhance reporting and information sharing in line with the new Aged Care Act effective from July 2025
• After initially winning the tender for GPMS in 2022 for $13.5 million, recent expansions have increased the investment to almost $150 million, including an additional $12 million for Salesforce licenses and services
• The shift to a phased rollout hopes to address challenges related to system preparedness and resource allocation, particularly for smaller and rural/regional providers

More time for providers

The Federal Government has quietly admitted that only the ‘critical elements’ of its major aged care technology overhaul will be ready this year with full implementation now pushed back to February 2026.

Initially, the aim was for eligible providers to be digitally ready for the new Aged Care Act by July 1, 2025. A $10,000 grant for providers who need financial support to implement IT changes was announced to alleviate some financial pressures. 

Few would agree that amount goes far enough, with providers stating the cost of digital transformation isn’t even in the range of hundreds of thousands – it’s millions of dollars. 

Conversations with the Aged Care Transition Taskforce – a group of industry experts who meet monthly to discuss relevant issues and needs – have identified that digital readiness is a top concern and there is mounting evidence the July 1 deadline could impact care levels and other operations.

The Minister for Aged Care, Anika Wells, has stated publicly that the department understands digital transformation is a significant change and that Taskforce feedback reaffirms that more time is needed for providers to meet the requirements. 

This has resulted in the July 1, 2025 deadline for ‘critical elements’ being retained while full implementation is now required by February 2026.

Shifting goalposts

The backpedal follows Federal opposition concerns over patchy readiness for the switch and warnings from the Taskforce about digital capability shortfalls that could impact care.

Opposition Senator and shadow minister for health and aged care Anne Ruston grilled officials last week over the apparent shift to a phased rollout, arguing the government had been ‘categorical’ about meeting the July 1 deadline.

Department assistant secretary Josh Maldon had earlier defended the timeline, claiming a phased rollout was always planned to ‘an extent’ to refine the system and core capabilities based on sector feedback. 

“I’m sorry, but I can’t follow your logic there,” Minister Ruston said in a tense Senate Estimates hearing.

Services Australia officials maintained confidence in key support systems, including the provider portal.

Regardless of the criticism, additional preparation time for the government and providers should prove beneficial. 

This week, a report from the Digital Health CRC and CSIRO’s Australian e-Health Research Centre stated that ‘reform has not explicitly followed a logical path in terms of the digital journey’. 

It also stated that there are differing levels of digital maturity between systems used in the sector and critical differences in abilities to record, share and analyse data. Continued investment by government and service providers was a top recommendation, alongside universal adoption by aged care of digital technology and My Health Record. 

“The transition to reform and improved aged care in Australia has made significant strides in recent times, but sustained progress and long-term improvements to the quality and efficiency of aged care will be powered by good data management,” the report added. 

The cost of delays

The government’s aged care ICT infrastructure commitment in the 2024 Budget was significant: $1.2 billion over the next five years. 

The GPMS, designed to streamline reporting and regulatory compliance, is expected to become the government’s “master source of truth” for aged care providers.

When Salesforce first signed the contract for licensing and professional services to support the GPMS in 2023, it cost $13.5 million. InnovationAus’ senior reporter Joseph Brookes revealed this main deal is now worth $41 million. Last month, Salesforce added another $12 million for software licenses and services.

All up, Salesforce’s aged care contracts are hovering around the $150 million mark. Overall contractor and system integration work and other new aged care technology has swelled to almost $300 million. Accenture and Capgemini are organisations also benefitting from contract blowouts. 

A department spokesperson told InnovationAus the ‘latest extension to the department’s Salesforce contracts reflects an annual extension to service and licensing fees, and that the original GPMS platform was completed last year’.

Despite the spiralling costs and delays, the government insists GPMS will ultimately reduce regulatory burdens and free up providers to focus on care. However, officials declined to reveal how many providers are actively using it.

All residential aged care, Home Care Package, and short-term care providers must use GPMS, with Commonwealth Home Support Programme (CHSP) and National Aboriginal and Torres Strait Islander Flexible Aged Care (NATSIFAC) providers joining in July.

With a shaky rollout, rising costs, and growing scrutiny, questions remain – will the aged care sector be ready by February, and can the government afford ballooning contract costs?