In the second of a series of articles focusing on Australia’s new National Digital Health Strategy, NZHIT talks to some Kiwi health IT companies already operating across the Tasman to provide market insights.
‘Do your research’ is the consistent advice for New Zealand health technology companies looking to take advantage of opportunities in Australia.
The country’s new Digital Health Strategy - Safe, seamless, and secure: evolving health and care to meet the needs of modern Australia – points to a variety of areas where the Australian health system will be looking to invest over coming years and Kiwi companies are well positioned to benefit from these. (You can access a copy of the first article here).
Australia is a natural next step for many NZ-based health IT companies and while some are already operating there, others will be wondering how best to tackle the market.
The view from Orion
David Dembo, General Manager Australia Orion Health, says that while he cannot quantify the budget associated with the Australian strategy, “what’s clear is there’s a full commitment to the journey”.
Companies with capabilities that align with the strategy and that are looking to enter the market could make a good start by engaging directly with the Australian Digital Health Agency.
However, his key piece of advice is that, like any new entrance to a market, it takes time.
“Business here is still driven around trusted relationships and it takes time to develop those. There is an overarching pragmatic theme in e-health in Australia, so the market is going to be intrigued by innovation, but only contemplates procurement when that innovation looks pragmatic,” he says.
“Most companies that have entered the market have looked at an investment period where they establish credentials, where they have a legitimate product that resolves a significant issue, they have credibility as a company as they have delivered before and demonstrate that they will stay the course. Australia doesn’t like flightiness. They are looking for partnerships more than product so demonstrating a commitment to the market is important.”
Dembo adds that New Zealand has some advantages over other international competitors, the most obvious of which is proximity.
“Australia being the dark side of the moon for many other software suppliers makes it a less attractive market whereas we have the proximity advantage,” he explains.
“I think New Zealanders have a cultural advantage in Kiwi ingenuity. It’s a country prepared to roll up its sleeves and knows it has to look after itself; it’s a doer and it’s that cultural DNA that’s given it a bit of a lead on other western systems in some aspects.”
Follow the funding
Dembo tells NZHIT that while understanding the national strategy is important, it is equally important for companies to read and digest each state’s individual strategy.
“Because of the delineation of funding and governance there’s alignment in intent around quality and efficiency, but if you want to understand how that translates tactically into immediate opportunities you can’t just take a federal view, you have to pull down into each state,” he explains.
“If you are new at it you probably want to find a ‘beachhead’ as you can’t spread yourself too thin, but you need to understand the strategy of the purse string holder.”
Healthcare dollars are spent at both federal and state level, as well as by private providers and consumers and each provides opportunities.
“Companies shouldn’t underestimate the voice of the consumer. It’s an assumption that the health system in Australia is essentially public government funded and it is in the majority, but if you look at consumers out of pocket outlay, it contributes almost 20% of the country’s recurrent expenditure,” Dembo adds.
Figures show that total health expenditure in Australia in 2014–15 was $161.6 billion
Of that, around $53 billion was spent by individuals, private health insurance and other non-government sources. Growth in non-government expenditure in 2014–15 was higher than for government and above the average annual growth over the decade (For more information click here).
The regulatory environment
Greg Garratt, CEO of Medi-Map Group, says the company has had very good dealings with the Australian federal government as part of the regulatory approval process for its medication platform.
“The Australian Department of Health and Australian Digital Health Agency have been really engaged and co-operative – at no point has anything been negative. The reason for that is we are very open with them and very clear on what we are trying to achieve,” he adds.
Garratt says the most important thing to do before entering the Australian market is research.
“We spent just under a year researching the environment so we understood how the regulatory environment worked and understood the key people we should be talking to. After that, we door-knocked and went and saw them many times.”
The company is now operating in Victoria and South Australia.
“The critical thing to understand is federal regulation and state regulation – you need to understand very carefully which things are done at federal level and which at both.”
Despite being a much smaller country, Garratt says that in many ways New Zealand is a more difficult place to get things done, because of the 21 DHBs that do not cooperate on standards delivery or software platforms.
In contrast, in Australia there are six states to deal with. So, New South Wales, which has around the same population as New Zealand, has just one bureaucracy.
“In our experience, New Zealand is a good place to implement tests and prove your use case then if it fits the environment in Australia you can move to a market that’s five times bigger and scale your product or service. It’s good to be in an environment that’s small and controlled to do that testing and make sure everything makes sense,” Garratt says.
Up in the cloud
David Carter, director of Stratos Technology Partners, agrees that building relationships is key to a successful launch into Australia.
The company has just finished building a system for the management of patients with IBD, which will be rolled out across Australia. Stratos won a contract with the Australia New Zealand Inflammatory Bowel Disease (IBD) Consortium to build the system and this is its first entry into the Australian market.
Carter plans to use this as a stepping stone to introduce other products and services across the Tasman.
He says Stratos built a cloud-based solution as, much like in NZ, hospital IT departments in Australia tend to be overworked and under-resourced and are often busy implementing big patient management systems. Using the cloud reduces the amount of work needed from the inhouse team.
His experience has been similar to Garratt’s in that he has found the state-based agencies to be very receptive and helpful. He says they see cloud-based products as a good thing and are keen to engage with vendors in that space.
“It’s very easy to do business over there,” Carter says.
Stay tuned for the next update in this series where NZHIT will focus on what New Zealand, which is developing its own digital health strategy, could learn from the Australian example.