For those observers with a deep knowledge of the real workings of the Australian ehealth industry – a category which apparently does not include many of the journalists, sundry “experts” and financial analysts covering it – today’s report in the Financial Review on what it described as the “prolonged” sale of Primary Health Care’s GP software business, Health Communications Network, couldn’t have been timed more exquisitely.
The AFR article suggested that investors are applying pressure for Primary Health Care to update the market by August 22 on the bidding process, amid substantial differences of opinion about the value of the asset; questions about why the company extended the bidding period and discussion of Primary’s “large debt load” and its limited refinancing alternatives, given its “lack of a credit rating that would allow it to access wholesale bond markets”.
According to the article, “Primary’s advisers at Deutsche Bank have assured some investors the sales process is on track, but others are talking it down, drawing attention to the apparent success of competitor Best Practice”. The AFR can’t resist taking a gratuitous swing at Best Practice founder, Dr Frank Pyefinch, accusing him of “boasting” about his company’s market share. Given the characteristic modesty of the man who had the vision to kick-start ehealth in Australia 21 years ago, it’s a ludicrous suggestion.
What they all seem to have missed is the fact that today, HCN’s major competitors – Best Practice, Zedmed, iSoft and Medtech – are in Melbourne attending a meeting of the NEHTA vendor council. HCN isn’t there, because, having being invited to join that panel, it chose pointedly to snub the invitation, proclaiming that the funding it was being offered was “just laughable”.
If anyone is smiling now, it’s HCN’s competitors. That “laughable” funding has allowed them to embed changes in their products which not only allow them to meet NEHTA’s ehealth agenda, but are also likely to represent a significant competitive advantage over HCN’s Medical Director software, whose market share continues to decline.
All four members of the panel have already met the specifications for what they call “Release One” which makes their software compatible with the Health Identifier standards introduced in legislation last year, and capable of displaying hospital discharge summaries and specialist letters in a CDA browser.
They are now working on adding the ability for a GP to press a button in their software and automatically generate a summary of a patient’s record and upload it for inclusion in a patient’s PCEHR, when it becomes available in mid-2012.
At meetings like the one in Melbourne today, they will be telling NEHTA which specifications they need to be refined to make it all work.
The situation is that behind the scenes, a considerable amount of progress is being made … but not, presumably, by HCN. Not only has it passed up the opportunity of being funded to make those changes, it doesn’t enjoy the access its competitors have to work with the NEHTA engineers.
That situation must surely impact on the future worth of HCN, despite the claim by The Australian, earlier this year, when news of the projected sale emerged, that “analysts expect healthy bidding tension, given HCN’s likely role in any national rollout of an electronic health record system”.
