Canada sale keeps firm healthy

Tom Donnelly says Intrahealth Systems opted for Canada because entry barriers were lower. Picture / Greg Bowker

Auckland medical software company Intrahealth Systems expects to reap more than C$10 million ($12 million) from a deal to provide advanced patient management technology to a large Canadian health authority.

Intrahealth says its contract with Fraser Health Authority in British Columbia - signed last week - is also an important foothold in its quest to win more lucrative North American business.

"This contract is our Canadian beachhead," said chief executive Dr Mark Matthews.

"We'll start in British Columbia and hopefully spread across Canada and then in time into the USA."

Intrahealth, co-founded by Matthews eight years ago and now employing about 60 staff, has developed software products to record and share patients' medical histories.

It started talking to Fraser Health more than two years ago when it began researching a possible entry into the Canadian market.

Fraser Health has an annual budget of about C$2 billion to service a population of 1.4 million people, and employs 23,000 staff, including 2000 physicians.

Intrahealth's chief operating officer, Tom Donnelly, said the Fraser Health contract was worth C$4 million to C$6 million in initial implementation work.

He expected ongoing support would push its value above C$10 million over the next three to five years.

Donnelly said Intrahealth had differentiated itself from international competitors by developing its software around a single technology platform that offered better speed and flexibility.

As well as providing medical staff at different Fraser Health sites with easier access to patient records, the system would also allow patients to access their own records online.

"It should reduce the incidents of drug interaction, mis-diagnosis - all the challenges that are associated with having no history and often not understanding the health history of a patient."

Intrahealth received government funding through NZ Trade and Enterprise to investigate opportunities in the UK and Canadian markets and opted to focus on Canada, where entry barriers were lower, Donnelly said.

NZTE's ICT sector director, Hans Frauenlob, said Intrahealth was one of several New Zealand health IT companies taking on big players in the international market.

"Canada is investing in upgrading its health systems throughout the various provinces. New Zealand companies in this sector are leading edge," Frauenlob said.

"They've got a certain world-class ability with their software, often developed from efforts in New Zealand to use IT to provide better health outcomes."

Donnelly said Intrahealth had stuck to a deliberate strategy of wooing a major client in Canada, rather than relying on small initial sales.

"We have consciously resisted the temptation to simply head to Canada, open an office and start selling," he said.

His advice to others wanting to break into the market: "Software technology development always takes longer than you expect [and] opportunities take longer that you expect to realise.

"We've been talking to Fraser for 2 1/2 years. You certainly need the commitment and the perseverance."

In New Zealand, Intrahealth projects have included providing software technology to 180 community health sites for the Ministry of Health's Maori health directorate and solutions for the Auckland District Health Board's community, mental and sexual health services.

Who: Chief operating officer Tom Donnelly.
Where: Based in Auckland, offices in Sydney and Vancouver.
What: Software company specialising in patient healthcare management tools.
Why: Unlike most of the company's international competitors, Intrahealth's software runs off a single technology platform.