iSoft trims workforce

By Karen Dearne

GLOBAL restructuring by iSoft will lead to job cuts in service delivery in some regions, including Australia and New Zealand, despite the company posting a 137 per cent rise in net profit to $34.7 million last week.

iSoft executive chairman Gary Cohen says a possible 70-100 IT positions may be lost in Britain - or around 10 per cent of the British workforce - but the overall impact would be offset by plans to add up to 50 new sales and marketing people to drive business growth.

According to Britain's E-Health-Insider, iSoft plans to reduce its frontline staff headcount from 193 to 131 through redundancies, and merge the support and technical teams into a single unit.

But Mr Cohen told The Australian that the restructure was "not about cost-cutting".

"This is about tailoring our operations to changed market dynamics, particularly in the UK where the old business was very focused on servicing the National Health Service's IT reform program," he said.

"While we're still working alongside CSC on those contracts, we're moving into a growth mode at the same time and for that the organisation requires a different set of skills.

"So this is about growing our businesses. We're currently a company with revenues of $600 million, and we want to more than double our size in the next three to four years."

Mr Cohen said a process of "bottom-up consultation" on corporate culture change and upskilling has just begun in the Australian and New Zealand operations, as well as in its Malaysian, Middle Eastern and Indian offices.

"While we're not looking at the same sort of restructuring as in the UK, the Australian operation equally needs to align its workforce to the dynamics of the market, and obviously with what's happening at both the state and federal level we're upskilling our competencies and looking to bring on higher-calibre personnel," he said.

"In that process, there may be people whose skill sets don't fit the new model, but we're still evaluating the situation and working through how best to achieve those outcomes."

Mr Cohen said no decision had been taken on likely job losses, but agreed there would be "people who are left behind".

"Let's be very clear, we are driving a cultural change in our company," he said. "Every industry and company needs from time to time to reshape and reposition itself.

"The overwhelming majority of our employees are totally motivated and focused on the future.

"Inevitably there will people who feel they don't fit in any more, and people who we think no longer fit, and that's a conversation we are having within parts of our organisation around the world."

In a statement to the Australian Securities Exchange this week, Mr Cohen said expected to "see more efficiencies come through from further restructuring of the UK business in the current year".

"We'll also continue to focus on building up our sales and marketing: under its previous ownership the company had become too reliant on the NHS connecting for IT program rather than building its own sales teams."

iSoft is also banking on changes mooted by Britain's opposition Tory party, that would allow local health services to deal directly with IT vendors such as iSoft, which holds 60 per cent of the English market.

IBA Health raising $124m to pare debt

HEALTH information technology firm IBA Health Group will seek to raise up to $124 million by issuing new shares to reduce debt.

IBA said yesterday it was offering two shares for every seven held by shareholders, at 55c per share -- a 29 per cent per cent discount to the closing price on Wednesday.

The institutional component of the offer, representing about $77 million, was committed.

IBA said its largest shareholder, AEP Financial Services Holdings, had committed to taking up its full entitlement, equivalent to about $32 million.

The balance of the institutional offer, about $45 million, is underwritten by ABN AMRO and UBS.

The retail offer, on the same terms as the institutional offer, is not underwritten.

IBA said it intended to use the proceeds of the offer to retire subordinated secured borrowings of $60 million from AEP, and other senior borrowings.

"The equity raising places IBA in a strong capital position to continue to benefit from investment in health IT by governments worldwide, and the computerisation of healthcare records," IBA chief executive Gary Cohen said.

"The outlook for the company is robust," he said.

IBA reconfirmed its 2009 full-year guidance for revenue of $540 million to $560 million and earnings before interest, tax, depreciation and amortisation of $120 million to $130 million.

"The company is well positioned to generate growth in the current economic downturn, with approximately 90 per cent of forecast revenues for full-year 2009 funded by governments either directly or indirectly," IBA said.

"Additionally, as at the end of January 2009, approximately 94 per cent of IBA's forecast full-year 2009 revenues were recurring, contracted and expected."

IBA shares, which were in a trading halt on Thursday, last traded at 77.5c.

Uniform health system in the mill

By: Karen Dearne

LARGE-SCALE production pilots of a nationwide e-health system will start this year, with the National E-Health Transition Authority set the task of making this happen as quickly as possible.

Peter Fleming says he hopes to run pilot projects this year

NEHTA chief executive Peter Fleming has been given a mandate to create a uniform IT infrastructure, starting with an incremental build-out of existing clinical and communication platforms.

Federal and state government agreement on the urgent need for healthcare safety and efficiency gains - detailed in several recent reports - signals an end to years of under-investment and fragmentation as parties pursued their own technology agendas.

"Legislative changes are needed, but from a technical perspective we aim to be in a position this year to run some pilots," Mr Fleming said.

"We're in very close dialogue with a number of groups about trials of electronic medication management and hospital discharge summaries."

Late last year, the Council of Australian Governments approved $218 million in funds to extend NEHTA's operations.

Mr Fleming said the organisation was working with software vendors to assess their capabilities and move towards the goal.

Medical Software Industry Association president Vincent McCauley said members were "hopeful this is the year things happen".

"That, of course, remains to be seen, but we're keeping our fingers crossed," Dr McCauley said.

The association is advertising for a part-time general manager in response to increased industry involvement in consultations over national projects.

IBA Health Group chief executive Gary Cohen said there had been a fundamental shift in attitudes, and "not many in healthcare are interested in trying to preserve their own patch" any more. "People have realised that we have to do things differently, and we need a more national approach to healthcare delivery," he said.

Mr Cohen said the Rudd Government should be "emboldened" and develop a vision of investing in healthcare IT infrastructure. "There should be a central funding body that's responsible for allocating funds for infrastructure," he said.

"People within state health departments are locked into a particular environment - really, only the federal government has the capacity to make those big changes," Mr Cohen said.

Helen Hopkins, outgoing executive director of the Consumers Health Forum, said there was more recognition among health professionals and bureaucrats that people were important stakeholders.

"Consumers want access to their health information when and where they need it, so we're continuing to push for a full e-health record," she said.

"If that's going to take some time, they want some easier things first, such as their hospital discharge information to be sent to their GPs," she said.

Uniform health system in the mill

By: Karen Dearne

LARGE-SCALE production pilots of a nationwide e-health system will start this year, with the National E-Health Transition Authority set the task of making this happen as quickly as possible.

Peter Fleming says he hopes to run pilot projects this year

NEHTA chief executive Peter Fleming has been given a mandate to create a uniform IT infrastructure, starting with an incremental build-out of existing clinical and communication platforms.

Federal and state government agreement on the urgent need for healthcare safety and efficiency gains - detailed in several recent reports - signals an end to years of under-investment and fragmentation as parties pursued their own technology agendas.

"Legislative changes are needed, but from a technical perspective we aim to be in a position this year to run some pilots," Mr Fleming said.

"We're in very close dialogue with a number of groups about trials of electronic medication management and hospital discharge summaries."

Late last year, the Council of Australian Governments approved $218 million in funds to extend NEHTA's operations.

Mr Fleming said the organisation was working with software vendors to assess their capabilities and move towards the goal.

Medical Software Industry Association president Vincent McCauley said members were "hopeful this is the year things happen".

"That, of course, remains to be seen, but we're keeping our fingers crossed," Dr McCauley said.

The association is advertising for a part-time general manager in response to increased industry involvement in consultations over national projects.

IBA Health Group chief executive Gary Cohen said there had been a fundamental shift in attitudes, and "not many in healthcare are interested in trying to preserve their own patch" any more. "People have realised that we have to do things differently, and we need a more national approach to healthcare delivery," he said.

Mr Cohen said the Rudd Government should be "emboldened" and develop a vision of investing in healthcare IT infrastructure. "There should be a central funding body that's responsible for allocating funds for infrastructure," he said.

"People within state health departments are locked into a particular environment - really, only the federal government has the capacity to make those big changes," Mr Cohen said.

Helen Hopkins, outgoing executive director of the Consumers Health Forum, said there was more recognition among health professionals and bureaucrats that people were important stakeholders.

"Consumers want access to their health information when and where they need it, so we're continuing to push for a full e-health record," she said.

"If that's going to take some time, they want some easier things first, such as their hospital discharge information to be sent to their GPs," she said.

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.

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.

IBA picks up $3.5m NZ work

By: Liam Tung

ASX-listed e-health vendor IBA Health has secured AU$3.5 million worth of contract extensions with three New Zealand district health boards through its subsidiary iSOFT.

Waikato, Lakes and Tairawhiti District Health Boards (DHB) have separately signed deals to extend contracts with the e-health vendor for its i.Patient Manager and HealthViews software, according to a statement to the ASX today.

Waikato's three-year extension covers its use of i.Patient Manager software, installed at several of the district's hospitals in April 2007. The deal was signed following iSoft's agreement to add functionality to the current system, according to IBA Health.

Meanwhile, Lakes and Tairawhiti DHBs have signed five-year deals following joint reviews of existing iSoft systems at the boards' hospitals. Waikato's implementation will be a template for future system improvements at Lakes' and Tairawhiti's hospitals.

"The solid relationship with Waikato, Lakes and Tairawhiti, gives all parties the certainty and confidence to agree to long-term commitments and us the ability to offer favourable commercial terms," Gary Cohen, IBA Health's CEO and chairman said in a statement.