Media release from Healthlink

A major medical software provider is proposing to charge monopolistic prices before allowing the free exchange of New Zealanders' medical files between health providers.  This action will either impede the development of an efficient electronic healthcare environment or become an unnecessary cost to the already financially stretched primary health care sector, which will ultimately be borne by taxpayers.

The company proposing this is ASX-listed Medtech Global Ltd (formerly Australian Healthcare Technology Ltd), an electronic medical record (EMR) vendor which provides software systems to nearly 90% of New Zealand's 1200 general practices, has told HealthLink that if the higher fees are not paid it will not enable its GP systems to communicate with other health providers via the widely used HealthLink communication service - effectively freezing New Zealanders' private medical information in some situations.

HealthLink calculates that if applied across the country for all services that are foreseeably affected, the increased fees Medtech is asking for would add between $4 million and $8 million in costs to the New Zealand health sector per annum over the next few years.

Medtech Global's systems are used to hold patient notes, including the results of laboratory tests, specialist visits and hospital encounters - all of which are transferred electronically through the HealthLink system. HealthLink is the electronic communications service that moves patient information around the health system, and is the predominant means by which information is exchanged between GPs and other healthcare providers.

Medtech Global charges a number of healthcare providers for its software services, including the approximately 1,000 general practices which use its systems. Medtech also charges public health organisations, district health boards and central government agencies. Medtech Global and HealthLink have worked together collaboratively for the past 15 years, and for the past decade HealthLink already pays Medtech an annual fee of $50,000 to support HealthLink's services.

Two years ago, HealthLink launched an electronic referrals (eReferrals) system for district health boards (DHBs), to enable their local GPs and specialists to send referrals to them. Under this arrangement, HealthLink charged DHBs a fee of $50 per general practice per month and paid Medtech a fee of $15 per practice per month to support an electronic link to its software needed for the eReferrals service.

In the past three months, more DHBs have sought the same eReferrals solution. Medtech Global initially indicated that the same $15 per month fee would be acceptable; however, on the afternoon that a major bid closed, HealthLink was notified that Medtech would charge a new licence fee of between $42 and $82 per practice per month plus technical support-if required, at $200 per hour.  This represents a fee increase of between 180% and 450%.  Given that HealthLink only charges DHBs a $50 per month fee, the national roll-out of its eReferrals service cannot proceed without significantly raising charges to DHBs or general practices.

"We are extremely reluctant to increase our fees to the health sector in order to support what are, in our view, unjustifiable demands and anti-competitive practices," HealthLink CEO Tom Bowden says. "Medtech Global has made it clear that unless the fee increases are met, they will block HealthLink's ability to exchange New Zealanders' health records between healthcare providers, rendering it impossible for HealthLink to transfer many of the one million items of information it exchanges each week.

"In essence, Medtech is trying to control who has access to New Zealanders' private medical information, as they attempt to impose this major cost increase on the health sector. We question why a commercial organisation should be able to restrict the way in which a patient's information is able to be used for the benefit of the patient? Our health sector is designed to support the flow of patient information amongst providers and minimal cost.  Restricting access to that information on an arbitrary basis is inevitably going to restrict the quality of care that patient receives.

"These fee demands threaten to hinder the management of patients' personal medical information, and this should be cause for grave concern for both taxpayers and everyone who uses the New Zealand health system. In our view patient data, and access to patient data, must not become a bottleneck, sold to only those that can afford it, we are taking a stand on this matter."

Analysis of trial projects such as eReferrals is showing significant (20-40%) improvements in referral efficiency. Mr Bowden says acceding to Medtech Global's demands by raising fees to DHBs and GPs for access of patient data would price such services out of reach, resulting in poorer healthcare delivery.

HealthLink is currently asking the Commerce Commission to look into this matter.

Questions and answers about the dispute

About HealthLink Ltd

HealthLink is an electronic communications and integration service that is used by all organisations within the health sector to exchange electronic patient information via their computer systems. HealthLink is used by more than 8,000 medical practices across Australia, New Zealand and the Pacific region.

Set up initially as a public-private partnership in 1993 under the last National Government, HealthLink's role continues under private ownership to develop and implement electronic communications and security services to make the New Zealand health system more efficient.

Taking a careful and conservative approach to this task, HealthLink has steadily increased the range of services it provides to the health sector and today is responsible for the electronic exchange of more than one million separate items of clinical data each week.

Typical uses for HealthLink include:
• Delivery of pathology reports
• Hospital discharge summaries
• Patient referrals
• Specialist letters
• Messages between general practices and chronic care management systems
• Communications with the National Cancer Registry
• Communications with the National Child Immunisation Register

The efficiency that HealthLink's services afford the New Zealand health sector is internationally recognised. New Zealand ranks alongside Denmark as one of the world's most 'connected' health systems.

In 2000, HealthLink expanded its services into Australia, where its services are now used by more than 60% of general practices.