Aged care providers want scale in vendors too

Just as Australian aged care providers are undertaking mergers and acquisitions to achieve economies of scale, they are also looking for scale and stability in their suppliers, says iCareHealth managing director Chris Gray.

Just as Australian aged care providers are undertaking mergers and acquisitions to achieve economies of scale, they are also looking for scale and stability in their suppliers, says iCareHealth managing director Chris Gray.

Mr Gray was commenting after this week’s announcement that Telstra Health has acquired the Australian arm of iCareHealth as part of its broader e-health vision to create a better system for patients, providers and funders.

iCareHealth is the only aged care software provider to offer a single person electronic health record across the continuum of aged care. Its software is used in the the provision of care to 50,000 residents for clinical care management and 30,000 of those residents for medication management.

Chris Gray
Chris Gray

Mr Gray, who co-founded the organisation in 2002 and has been at the helm since 2007, said such transactions were a sign of things to come as Australia’s ICT aged care sector comes of age.

“The needs of the aged care providers will be for more scale and more stability within the vendor so you would have to think naturally there will be consolidation of IT providers within the aged care sector,” Mr Gray told Australian Ageing Agenda.

“That is not just in the clinical and medication side; that’s anybody that is supplying information or IT systems into the aged care industry.”

For providers it is about their financial stability as well as getting the IT they need to support their operations and for iCareHealth it is about making wider healthcare connections, he said.

“Being part of the Telstra Health vision, our role is to play the aged care part of that, particularly in residential aged care and how we connect into the pharmacy and the GP and provide all of that healthcare information about a resident to the nursing and care staff on the floor.”

While the business has a new shareholder Mr Gray said his and the rest of the management team’s roles remain the same and iCareHealth would continue to deliver the same service to its clients.

“People’s roles don’t change. It is more about connecting into the other pieces of the software puzzle that Telstra Health is bringing to it and being part of that,” he said.

A good fit for clients, staff and Australian aged care

The sale is the result of an unsolicited approach from Telstra Health, said Mr Gray, adding that iCareHealth did not immediately accept an offer.

After years of heavily investing in taking the technology developed in Australia into the UK, it took a lot of discussion among the board about separating the Australian and UK operations, he said.

Mr Gray said they decided to split the company as Telstra Health was a good fit for iCareHealth’s clients and staff as well as the Australian aged care market.

“It is quite exciting for our clients who have invested with us over a 12-year period. For them to be able to realise further benefits from what they have invested in and for our staff from a career development perspective being part of this also is very important. The story for them is great.”

Looking beyond their own clients and staff, Mr Gray said the move to Telstra Health would benefit larger aged care providers that want scale and stability and the smaller and rural operators in terms of access to ICT software and infrastructure.

He said key for smaller and non-metropolitan providers was the connectivity that Telstra brought and iCareHealth moving its software to the cloud. iCareHealth recently announced a partnership with Microsoft Azure in Australia to put its software to the cloud.

Putting things into the cloud meant an aged care provider did not have to invest in IT infrastructure and maintain that infrastructure over a long time, he said.

“Their total cost of ownership of the software becomes far lower and it becomes more accessible to them as an organisation, so they get all the efficiencies of the larger aged care providers in a far smaller scale but they are seeing all of those benefits.”

He said the ability for rural and remote aged care providers and smaller providers to have software and be connected into the wider healthcare network, including telehealth capability, was crucial because it was very difficult to get a specialist or GP to an aged care facility in a city let alone in a rural or remote setting.

Mr Gray said he was personally excited by the partnership and what it would be able to deliver their clients.

“It accelerates our plan. We agree with the Telstra vision of connecting. We can accelerate things with Telstra Health and that’s what’s exciting for myself and the management team.”

Tags: chris-gray, icarehealth, mergers-and-acquisitions, software, Telstra-Health,

2 thoughts on “Aged care providers want scale in vendors too

  1. It is clearly happening . . . the privatised ownership of client information, excluding any number of relevant treatment and health management modalities in favor of an essentially pahrmaceutical / allopathic model. Or so it seems.

    I am alarmed at the way in which information technology is being marketed as the final solution for the health management of older people. Statements about the difficulty of getting health professionals, in this instance general practitioners or allopaths, into rural or remote, let alone city care facilities, being met with telehealth provision as a solution, is chilling.

    Instead of calling very loudly for a much greater level of training and provision of aged care doctors, nurse specialist practitioners, general nurses, and specialists from other health modalities such as naturopathy, physiotherapy, massage therapy and so much else, we see a bunkering down around the highly profitable telehealth notion of takmg care of the diagnostic and health management needs of an increasingly large and poorly serviced section of the community.

    We are looking only for solutions that fit lucrative aged care and IT business models. Sure, they will work for what they are. People can be reduced to a market, and the principal beneficiary is the market. People can also continue as people with the same dignity they had prior to entering a care siruation, needing and entitled to have doctor visits, continued access to other modalities, support from condition specific health suppot associations and all the rest of it.

    At a time when we need to be starting to address a far broader range of health concerns for the elderly we see an IT assisted reductionism coming into play, that will lead to all manner of oversight and neglect. Dollars will be made big time and people will use the old mantras of mergers and acquisitions to ensure their market reach rather than any expansion of options and hands on support for the elderly.

    No one can doubt the power of information technology in ensuring that some essential knowledge is available to those whose job it is to know and to help manage, but the capacity this ionically, sadly, brings to reducing people to inadequate checklists whose focus reflects the business model of those tapping the aged and their care as a segmentable market, is a real danger.

    This article on aged care management as a a subsidiary of Telstra Health read like a self promoting, self congratulatory investment prospectus for continued concentration and narrowing down of the diverse tools and options that might be of use for older people especially once they have been sucked onto the aged care conveyer belt.

    If ever a sector needed public resourcing and accountability, shaking up, and at least some notion of equality of access, it is the aged care sector. It will not happen. I know it and the businesses poised to cash in on a sector being hurriedly defined to match do-able market modelling, also know it. And more’s the pity! Mores the pity!

  2. Really?

    So, Telstra buys iCare and everyone magically gets fast broadband..even remote rural areas.

    How does that work exactly?

    Will Telstra give priority service to customers running iCare software while the guy next door stands on his roof to get a signal?

    This is purely a commercial acquisition story…there’s no tangible benefit to anyone except those involved in the deal. Telstra, like many other businesses, wanted a piece of the aged care action so they bought a software company. Thats it.

    It’s a perfect match really..A dinosaur Telco company has naively bought a dinosaur software company. With landline revenue plummeting and more nimble operators nipping at their heels, Telstra’s trying to diversify. They’re too big, too slow and too old…iCare should be a perfect partner.

    Can someone please explain to me why anyone buys these programs? Like most ‘Aged Care’ specific software, its little more than a collection of paper forms in electronic format. We look like a bunch of hicks that just got the electricity connected to the farm.

    Aged Care please grow up. Simply buying a computer doesn’t mean you’re all techno cool. Replacing a paper filing system with an electronic one doesn’t address the care issues we all face daily. The software choices currently available (with the notable exception of peoplepoint) are little more than filing cabinets and most providers still use them in combination with paper files. Missed orders, incomplete charts and gaps in care delivery and documentation remain the norm in most facilities using any of the (insert name here)Care software.

    I’ve witnessed the decision making process. The IT guy or the CEO (but never anyone that will actually be using the software) chooses the software. It’s cheap for a reason folks.

    And lets be clear about ‘The Cloud’…its not magic. You still need to invest in IT infrastructure (computers, wi-fi, etc.) but you might save a few hundred dollars not buying hard drives. Big Deal. Telcos love it because they can charge you for data services and storage…so please explain those cost savings again?

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