Aged care providers want scale in vendors too

November 21, 2014

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

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.”

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