ICSGlobal sues Medicare

By: Brett Winterford

update Electronic health transaction company ICSGlobal has filed a lawsuit against Medicare Australia, accusing the Federal Government agency of anti-competitive behaviour over the development of its e-health transaction network ECLIPSE.

ASX-listed ICSGlobal said it had invested some $20 million and the better part of eight years into the development of an online exchange network dubbed THELMA, which connects private insurers, banks and healthcare providers to manage the settling of healthcare-related transactions.

The company claims to have made this investment under the assumption that the Federal Government had no interest in facilitating such electronic exchange itself.

But in 2004, the Federal Government announced the release of ECLIPSE, its own system for managing such transactions. The initial modules of the system went live in July 2004.

ICSGlobal subsidiary THELMA today confirmed it had now filed an application and statement of claim in the Federal Court alleging that Medicare contravened the Trade Practices Act by launching a service that competed with its business.

Tim Murray, CEO of ICSGlobal, said the company spent a full year in the 1999/2000 time-frame scoping the market for a medical transaction exchange network after private hospital customers informed him of a need for such a solution.

"We knew we were about to invest a substantial amount of money," he said. "Twice we went and saw both HIC [Medicare Australia's predecessor] and the Minister for Health [at that stage Dr Michael Wooldridge] in 2000 and in 2001. And we asked them: 'Do you have plans to address this problem in the private sector?'

"They both said no, on both occasions. They both said, in fact, congratulations, it is fantastic to see the private sector stepping in to do this."

THELMA went live in 2001. In 2002, HIC called for requests for tender for a system Murray claimed was "basically another THELMA." But the CEO derided this tender as "a sham".

"You can tell if a tender is a sham when they ask that all the intellectual property of the system has to be assigned to HIC, that the solution proposed has to be free of charge, and under the full control of the HIC. What private sector business could do that?" he asked.

"So sure, people responded to the tender, but they all said you can't have our intellectual property and we have to charge something. HIC then calls them invalid tenders."

Murray claimed HIC only put out the request for tender to convince the Federal Government of a need to build its own system. He claimed HIC approached the newly appointed health minister, Kay Patterson, following the tender asking for in excess of $50 million to build ECLIPSE.

"Once they closed the tender process, they [HIC] could then go to the Government and claim that there is nothing in Australia that can meet HIC's requirements," Murray said. "They could say, hand on heart, that because nothing like this exists, they will have to build it themselves."

Asked if ICSGlobal had any documented evidence that HIC/Medicare made any promise not to develop such a system back in 2000, Murray said his proof was limited to "minutes of meetings".

But Medicare/HIC's actions only became illegal, Murray alleged, by virtue of its offering the same service as an existing private sector company at zero cost. ICSGlobal interpreted this practice as being in breach of the Trade Practices Act.

If Medicare Australia charged a commercial fee that reflected the true cost of providing e-health services to the private health sector, he said, they'd be competing on a level playing field with THELMA, and the better solution would win.

"We would welcome the competition," he said. "But you can't have taxpayers' money being used to set up cartels to provide free products and services simply to kill off the private sector."

Murray claimed ICSGlobal's business "is still growing" in Australia, despite the conflict. But he claimed the development of ECLIPSE has forced his company to take most of its business offshore.

"You reach a point where you are trying to compete with a free product," he said. "Large chunks of the private health sector are saying, we like your system, but there's a free system coming so we'll wait for that."

Waiting, he said, was what the sector was becoming used to from Medicare. Murray accused Medicare of spending over a billion dollars on failed technology projects and said that the hospital claims module of ECLIPSE was running five years late.

"It's in Medicare's interests, to protect their position of power, to make sure the health industry stays inefficient," he argued. "Medicare is an empire for processing paper. History has proven they will aggressively target anything that threatens that."

A spokesperson for Medicare Australia said it "intends to vigorously defend these proceedings."

The case will go before the Federal Court on 4 September.

Austin Health saves ancient apps

By: Suzanne Tindal

Melbourne healthcare provider Austin Health has moved key applications from a legacy Reality-X platform, which developers had not touched in 10 years, to a modern system by software company Intersystems.

(Credit: Austin Health)

Time had been ticking for the health organisation, which employs thousands of staff and treats tens of thousands of patients, because the contracts for the Reality-X platform, which supported specialised applications the company used in its everyday operations, were ending.

"We basically run our IT department on an oily rag," Austin Health application services manager Paul Girdler said. "We were going to be sinking a lot of money into legacy systems."

Girdler said that he had been considering a rewrite of the old applications sitting on the platform to escape the costs, but that such an action would have cost in the order of $200,000.

Instead, Girdler decided to buy the answer to his problem from Intersystems, moving the applications to the firm's CACHÉ platform and thus coming to a more reasonable estimate for keeping the applications running off the Reality-X platform of $60,000 for hardware, staff costs and software.

Having run TrakCare by the same company, Austin Health already had a conduit to Intersystems, Girdler said.

"That made it easier for us to make the decision," he said, although he added that there were no cost savings from already running an Intersystems product, except for having staff already trained up.

Since deciding on Intersystems, Girdler has moved the largest and most complex of the applications, a booking system for a dozen departments such as physiotherapy, psychiatry, social work and speech pathology, to the new platform.

We basically run our IT department on an oily rag

Paul Girdler

"We figured if we can't get that one across, there's not much point in doing the others," he said.

Having successfully shifted the application away from Reality-X, Girdler has progressed to seven other applications.

His developers now have an interest in the application, because they don't have to write MultiValue code to extend it, Girdler said. Instead they use CACHÉ, which he said was a dialect of Visual Basic.

Their programming skills will be put to good use next year to change the user interface for the applications, he said, because although they will have been moved to the new platform, they will still look and feel like a green-screen legacy application, one of the disadvantages of not doing a rewrite.

IBA Health posts record earnings

By: Karen Dearne

IBA Health Group has claimed the title of Australia's leading health software company with revenues of $361 million for the 2008 financial year, up by 381 per cent over the previous year.

Chief executive Gary Cohen announced a net profit of $49 million, up 113 per cent, after completing the takeover of its former rival, iSoft, in October last year. However, the profit result included $35 million in acquisition, integration and other one-off costs.

The rise in revenue, from $75 million in 2007 to $361 million, reflected the company's expanded global footprint and continuing strong income from existing products.

"Twelve months ago we were an IT company focused on the delivery of healthcare solutions, primarily in the Asia-Pacific region," Mr Cohen said. "Fast-forward to the present and we are one of the largest providers of healthcare solutions worldwide, with more than 13,000 customers in 35 countries and nearly 3800 employees.

"With operations across five continents, our business now generates more than 85 per cent of its revenue from outside our traditional territories in Australia and Southeast Asia."

IBA, which has retained the iSoft brand for its healthcare products, expects its next-generation web-based architecture, Lorenzo, to become the "global standard in healthcare IT systems".

Lorenzo has been deployed to early adopter sites in Britain's National Health Service IT reform program in conjunction with its partner CSC, and at university hospital sites in Germany and the Netherlands.

Mr Cohen claimed that IBA was also pioneering technologies such as affordable multimedia interfaces, remote consultation systems and more advanced electronic health records.

During 2008, the company won new business in Russia, South Africa and Mexico, and in the next 12 months it plans to open new operations in Dubai and South Africa.

"Asia also presents a key growth opportunity for the business," he said. "We are planning expansion into China, Indonesia, Taiwan, Brunei, Thailand and India."

In England, IBA rolled out its iPatient Manager hosted solution to more than NHS hospital trusts, and deployed the clinical product, iCM, in several sites in the London and Southern clusters.

And in Australia, the company won new contracts with health departments in South Australia and Tasmania.

IBA's Lorenzo nabs first customer

By: Karen Dearne

MACQUARIE University Private Hospital in Sydney is set to become Australia's first user of Lorenzo, IBA Health Group's next-generation platform, in a $7.6 million deal for advanced healthcare applications to be installed at the high-tech hospital due to open next year.

A $140 million joint venture between Macquarie and Dalcross Private Hospital is funding the construction of a 180-230 bed facility in the university's research precinct, with the aim of providing high quality patient care as well as opportunities for post-graduate medical training and health research.

IBA will supply its Lorenzo Acute Care suite of clinical, administrative and financial applications across the hospital and specialist clinics. The package includes full electronic medical record functionality, and will link to new systems for radiology and pathology.

Dalcross chief executive Carl Adams said the investment would allow management of the new facility "with a confidence that the essential administrative and clinical requirements can be achieved immediately, while ensuring a pathway to the next-generation" of health information systems.

"As an early adopter, we aim to play an active role in the development program and, with other users, help shape the future of healthcare IT," Mr Adams said.

IBA chief executive Gary Cohen said the contract marked a milestone that would help drive sales of Lorenzo in the region.

"With Lorenzo, everyone has the opportunity to play an active role in the delivery of care," Mr Cohen said. "It breaks down barriers to critical clinical information, helping health professionals to make faster informed decisions.

"There is a revolution in healthcare in which Lorenzo will have a central role."

Macquarie University Private Hospital will also be the first Australian hospital to install iSoft Financials, an integrated suite of web-based financial and purchasing products called Integra.

Yesterday, IBA claimed the title of the nation's leading health software company with revenues of $361 million, up 381 per cent from $75 million in 2007.

IBA registered a net profit of $49 million, up 113 per cent, after completing the takeover of its former rival, iSoft, in October last year. However, the profit result included $35 million in acquisition, integration and other one-off costs.

IBA expects Lorenzo - built on Microsoft's .NET platform - to set a new global standard for healthcare IT.

Vic rethinks e-health

By: Karen Dearne

VICTORIA is ruling a line under its patchy HealthSmart IT rollout, and has returned to the drawing board with plans for a new whole-of-health ICT strategy for the period 2009-2013.

When the now-$427 million program began in 2003, it was hoped that the ICT refresh and rebuild across the state's public hospitals, rural alliances and community health providers would be complete within four years.

But in April this year, Victoria's auditor-general Des Pearson said HealthSmart had been overly ambitious in its targets, and was at least two years behind schedule.

More than half of the original budget had been spent with only 24 per cent of the planned installations complete.

The audit office found that HealthSmart had failed to get the cornerstone Cerner clinical system working at any of its sites, and had replaced only one of 10 HOMER hospital systems which were obsolete when the program began.

Mr Pearson said the project judged most at risk, but with the greatest potential benefit, was Cerner's Millennium suite of e-health records, appointments scheduling, diagnostic services, results reporting and e-prescribing applications.

A $79 million deal with Cerner was signed in March 2006, but costs had risen by $17 million to $96 million in 2006 - the biggest price blowout so far, the audit office found.

"According to the original timelines, the acute hospitals in 10 health agencies should be using the clinical sysytems by now, but even if funding negotiations are concluded shortly, the first four agencies are unlikely to meet the June 2009 completion date," Mr Pearson said.

The department and the Office of Health Information Systems _ which has led the project _ have weathered repeated criticisms over technical and vendor aspects, including contract probity concerns raised in the state parliament.

It's also understood many of the state's health boards have raised concerns over the selection of systems and the likely cost to agencies of adopting the strategy.

Human Services secretary Fran Thorn defended the program at the recent Health-e-Nation conference in Melbourne(September 3), saying the first implementation of the Cerner suite would "formally commence" in October.

"Engagement with the next round of health services is underway in anticipation of rolling out to agencies over the next two years," she said.

HealthSmart was also rocked by early concerns over vendor iSoft's financial status and ability to deliver its next-generation software architecture, Lorenzo, as promised.

IBA Health Group bought out iSoft, and has taken over its contracts to supply the existing integrated patient and client management system, iPatient Manager.

To date, four agencies have implemented iPM, Ms Thorn said, and nine standalone health services are now using the client management system, TrakCare.

"Eight health services and 22 community health services will have these systems by this time next year," she said. "The integrated products support the management of patients across acute and community services, rather that just sharing data."

Last month, the Victorian Government allocated a further $104 million for HealthSmart in its 2008-09 budget.

Ms Thorn said HealthSmart would give the state ``one of the most up-to-date and capable health ICT infrastructures in Australia, ready for the future and able to adapt'' to a changing environment.

``Indeed, HealthConnect Victoria is leveraging off the investment in infrastructure and applications,'' she said.

``In partnership with our federal colleagues, a Shared Electronic Health Record project has been established to prototype a limited SEHR system across a number of public hospitals, primary and community care providers in the Bendigo Loddon/Mallee region.''

This project has received more than $1.5 million in federal funding, from October 2007 until June 2009.

HealthSmart two years behind schedule

By: Karen Dearne

VICTORIA's troubled $320 million HealthSmart project has failed to get the cornerstone Cerner clinical system working at any of its sites, and has replaced only one of 10 Homer hospital systems, which were obsolete when the program began four years ago.

Auditor General Des Pearson said HealthSmart was at least two years behind schedule and more than half of the budget had been spent with only 24 per cent of the planned installations complete.

In a long-awaited review, Mr Pearson said the original budget, which involved health agency co-funding, was not realistic, and the targets were too ambitious.

Victoria's Human Services Department and the Office of Health Information Systems have consistently deflected concerns raised in the state parliament by vendors, industry observers and even an anonymous group of healthcare workers.

The project judged most at risk, but with the greatest potential benefit, is Cerner's Millennium clinical suite, which includes health records, electronic scheduling, diagnostic services, results reporting, and e-prescribing capabilities.

"The first release of the clinical system has been tested by various user groups and is ready for use, but none of the four lead agencies have committed to using the new system," the report says. "According to the original timelines, the acute hospitals in 10 health agencies should be using clinical systems by now, but even if funding negotiations are concluded shortly, the first four agencies are unlikely to meet the June 2009 completion date."

The $79 million deal with Cerner was signed in March 2006, but costs rose by $17 million to $96 million in 2006 -- the biggest price blowout in the program.

A Cerner spokesman yesterday declined to comment, citing contractual obligations.

Reation suite.

ISoft ran into difficulties supplying systems to the British National Health Service Connecting for Health program, and was subsequently acquired by another Australian firm, IBA Health Group.

Communications director Greg King said IBA Health was "comfortable tracking to the time frames set by HealthSmart" for completion in 2009.

"The procurement process took longer than expected and the project started nine months later than anticipated, so the department, lead agencies and we as vendor are doing quite well catching up," he said.

"We've got nine lead agencies in our portfolio. We already have three live, we have one in implementation and two others are in the planning stage, so we've only got three sites pending."

Mr King said it was "always good to have a third pair of eyes looking at large projects" such as HealthSmart.

"We don't see anything in his report that we have any major disagreement with," he said.

Oracle achieved the best result among technology suppliers, with its E-Business financial management system implemented in eight of 11 participating agencies. The remaining three were due for completion this month.

Mr Pearson found the Oracle project came in $500,000 over the original budget, at $26.8 million.

TrakHealth has set up its standalone Client Management System in two community health centres, and a further 10 sites wish to install the product.

Mr Pearson found there was "room for improvement" in the shared services arena, where underperformance had a knock-on effect on systems availability.

Meanwhile, a lack of interest by agencies in taking up the payroll system might "trigger" payment of a revenue guarantee to the vendor.

Victorian shadow minister for health Helen Shardey said the auditor's findings were not unexpected, but the extent of the project's failure was a surprise.

"We have supported this kind of technology to bring our health system into the 21st century, so the massive failure is a tragedy," she said. "The project has been completely botched, and it points to a government that is just not capable of delivering on these important projects."

Lorenzo to boost IBA group

By: Karen Dearne

IBA Health Group expects the release of its new Lorenzo software will improve its forecast 18 per cent revenue growth next year.

Chief executive Gary Cohen said IBA was now the SAP of healthcare, and Lorenzo would transform the company into a "major international player" over the next two to three years.

"Health informatics will do for healthcare what enterprise solutions did for manufacturing and banking some 20-odd years ago," he said.

Australia's largest listed health IT company took a hit yesterday, however, due to costs associated with its $463 million takeover of former rival iSoft.

IBA's net profit for 2007-08 was $14.65 million, compared with $23 million the previous year, but the result included $35 million in acquisition, integration and other one-off costs.

Mr Cohen said revenues rose from $75 million in 2007 to $361 million last year, reflecting the company's expanded global footprint.

For 2009, IBA is predicting revenue of $540 million to $560 million, with earnings before interest, tax, depreciation and amortisation of between $120 million and $130 million.

"To the delight of many shareholders, we expect to reinstate the payment of dividends," Mr Cohen said.

The global launch of the Lorenzo platform is planned for November, with the clinicals release due early next year. Based on Microsoft's .NET service-oriented architecture, it it designed along plug-and-play lines.

IBA has also committed to opening the platform to outside developers. "That way, we'll quickly get more scalability and usability," Mr Cohen said.

Patient tracking system unveiled to solve drug errors

By: Liam Tung

Australian citizens will be assigned a unique identifying number to help healthcare providers protect their patients from accidentally being given the wrong treatment.

Australians' Medicare records will be accessed to create the "Unique Health Identifiers" (UHI), under an initiative announced by minister for Health, Joe Ludwig.

While Medicare will be responsible for the design, building and testing of the UHI system, Australia's National E-Health Transition Authority (NEHTA) will coordinate the project to collect information needed to develop the identifiers, as well as develop requirements for an identity management system.

The system is meant to resolve the limitations of current identifiers -- name, sex, address and date of birth -- which has led in some instances to the wrong test results being applied to a patient, according to an earlier NEHTA report.

At present, medical service providers such as community GP clinics, pharmacies, private and public hospitals have diverse methods and systems to identify individuals, which can potentially lead to the mis-allocation of tests and treatment. Likewise, medical provider information is often stored on disparate systems.

Want to know more?

For all the latest news, analysis and opinion on government, click here

According to NEHTA, no clinical data will be contained in the records, but they will contain identification and demographic data collected from Medicare. Other potential sources of data may include Australia Post's Geocoded National Address File and Births, Deaths and Marriages Registries for date of death data.

Work on core components of the UHI project commenced in February last year when the Council of Australian Government approved a AU$98 million budget for NEHTA to deliver identifiers for individuals and healthcare providers, which together make up the UHI.

Previously Medicare was not permitted to use its records for secondary purposes such as the creation of the UHI, however, last August Senator Chris Ellison passed legislation allowing the department to do so.

A privacy impact statement is yet to be created for the system, although NEHTA expects the development process to commence in February.

The UHI program will also involve establishing identity management systems to authenticate healthcare providers, workers and patients that access the system. While individuals will be required to use a single factor authentication system, NEHTA plans to establish a two-factor authentication system with the use of smartcards for healthcare providers.

Secondary uses for information collected under the UHI system are yet to be defined, however, NEHTA has proposed that research bodies, such as the Australian Bureau of Statistics, will be able to access anonymised information.

Last year, the Australian Law Reform Commission (ALRC) recommended amending the Privacy Act to include "genetic" information under the definition of "health information", which will govern the use of information collected under the UHI. At present, the Privacy Act does not sufficiently cover genetic information, according to the ALRC.

UnitingCare Health Extends Relationship with Cerner

UnitingCare Health (UCH) announced today it has chosen Cerner (NASDAQ: CERN) to remain as its healthcare information technology (HIT) provider for clinical and patient administration system solutions. Commencing their relationship in 1999, the two organisations recently signed a five-year deal, which will provide solutions to all of the health system's hospitals, including The Wesley Hospital and St Andrew's War Memorial Hospital.

"The business of providing private healthcare has become more challenging and highly cost competitive,' said Richard Royle, UCH Chief Executive Officer. 'I'm pleased to affirm that Cerner remains the best fit to our business needs."

UCH conducted an extensive market evaluation of the HIT software suppliers in the Australian healthcare market. The hospital conducted the evaluation, which spanned two years, to ensure it would remain competitive in the changing business environment in Australia. UCH decided to renew its contract with Cerner because it provides the best fit for its business needs and best value for investment.

'UCH has a strong reputation in providing high-quality care in Queensland,' said Rick Heise, Cerner Asia Pacific Managing Director. 'We are proud to extend our relationship with one of the top not-for-profit healthcare systems in Australia, and will continue to work together with UCH leadership to help them continue to deliver safe, efficient care to their patients.'

The five-year agreement will facilitate further enhancements of the Cerner Millennium^® solutions currently in use at UCH.

About Cerner

Cerner is taking the paper chart out of healthcare, eliminating error, variance and waste in the care process. With more than 6,000 clients worldwide, Cerner is the leading supplier of healthcare information technology. The following are trademarks of Cerner: Cerner, Cerner Millennium and Cerner's logo. NASDAQ: CERN. www.cerner.com.

About UnitingCare Health

Launched on the 13th of June 2000, UnitingCare Health now operates one of the largest not-for-profit private hospital groups in Australia. Our group of hospitals contain over 1,000 licensed hospital beds spread amongst our five facilities:

The Wesley Hospital

St Andrew's War Memorial Hospital

The Sunshine Coast Private Hospital

St Stephen's Hospital, Maryborough

St Stephen's Hospital, Hervey Bay

Today the group employs over 3,500 staff, being a mix of full-time, part-time and casual. UnitingCare Health will admit around 90,000 Queenslanders in this 12 months and undertake around 63,000 surgical procedures. In the last financial year, the group had a total annual revenue in excess of $350 million which will be used to improve our services and facilities.