iSOFT: Australia playing follow the e-health leader


Australian e-health giant iSOFT has noted what it says are “early signs” of action on e-health by Australia’s Federal Government but today said its major growth driver would be the Unites States’ US$34 billion stimulus investment in health IT systems and that Australia would likely follow other countries in the area.

Federal Health Minister Nicola Roxon last week introduced legislation into Federal Parliament that would introduce a National Health Identifier to be implemented by the middle of 2010.

“In Australia … we have seen the early signs of the Government preparing the foundations for e-health, with the legislation for patient unique identifiers,” said iSOFT chief executive Gary Cohen in a briefing after the release of the company’s half-yearly financial results. Cohen also noted encouraging signs in Europe, China and Latin America for the company.

“However, the major growth driver is the US$34 billion stimulus investment in healthcare IT,” he said. “This will lead to the re-shaping and the transformation of the US healthcare IT market, as well as most likely lead to the rest of the world playing catch-up.”

Cohen said it was likely that Australia “will follow the lead of others” in the area of e-health.

The comments came as iSOFT revealed it had suffered a steep revenue downturn in the six months to 31 December last year compared with the same period the year before, with Cohen attributing the fall primarily to currency fluctuations.

iSOFT’s revenues sank 13.1 percent in the period to reach $239.29 million, down from $275.38 million in the half-year to the end of 2008. Net profit after tax was also down 44.2 percent to $5.2 million.

“These results should be viewed in the light of a significant currency translation effect on revenue and earnings when compared to [the first half] of financial year 2009,” said Cohen. “You may recall that over half of our revenue is in UK pounds and a further quarter is in Euros.”

“The substantial drop in these two currencies vis-a-vis the Australian dollar has meant that we have reported a lower revenue and earnings when these amounts are translated back to Australian dollars.”

Despite the steep falls, Cohen said in general that each of iSOFT’s segments performed “as expected or better” in local currency, which he said demonstrated the underlying strength of the global health IT industry.

One of iSOFT’s main contracts is its deal to implement (in partnership with IT services giant CSC) a massive e-health platform for the UK’s National Health Service. In December iSOFT had negotiated a new two-year agreement with CSC that the company said would provide some greater revenue visibility in the future, although it would also result in “some drop in revenue”.

Image credit: Wojciech Wolak, royalty free