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 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.

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.

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.

The Lorenzo fantasy

All that we've been hearing from IBA (iSoft) since 2004 is that Lorenzo is going to change the world and fix all of our e-health problems. It sounds like a great idea but it has one problem - the product doesn't actually exist. The reality is that Lorenzo is shaping up to be just another web portal that interfaces in legacy systems and provides little to no intrinsic value overall. I'll give some credit to IBA's chairman and marketing department who have done a good job of ensuring that people are hearing about Lorenzo. Talking is unfortunately all that IBA has done. The issue still remains - when will we be able to actually see it working and "live" in it's full promised form. The sales pitches just aren't cutting it and IBA is looking a lot more like a failing company who is outsourcing it's development in labour cheap, quality poor India, promising a lot and delivering ... well ... nothing. So far at least.