Updated: Health IT war of words goes to Commerce Commission

HealthLink takes on Medtech over alleged fee increase plan

A war of words has erupted between medical systems provider HealthLink and practise software developer Medtech, after HealthLink laid a complaint with the Commerce Commission last week.

HealthLink says Medtech is refusing to allow the free exchange of New Zealanders’ medical files unless its demands for a fee increase of between 180% and 450% are met. HealthLink has complained to the Commerce Commission, alleging anti-competitive behaviour.

However, Medtech chairman Vino Ramayah says there are commercial reasons behind HealthLink’s complaint as the two companies are involved in a competitive tender bid. Ramayah says Healthlink is not motivated by public interest in taking the issue to the media.

“This has nothing to do with the day-to-day sending of messages between practices,” Ramayah says.

Medtech says day-to-day messaging is continuing as usual and the pricing dispute relates purely to a tender bid now underway in the Auckland region.

Ramayah says if the Commerce Commission decides to investigate, his company is glad to cooperate. He says HealthLink and Medtech had a commercial agreement, but then HealthLink wanted exclusive use if its solution. Medtech was not prepared to go along with such messaging restrictions, he says.

HealthLink’s CEO Tom Bowden, in turn, disputes that claim.

“We never, ever said that or hinted at that,” he says. “We are completely against exclusive solutions of any kind.”

He backed this by sending Computerworld an email he sent to Ramayah on March 20 that he says proves his point:

“We have no problem with Medtech joining other consortia, however, we would ask that personnel with a key involvement in competing solutions not be directly involved on our project,” it says.

In a subsequent statement, Medtech elaborated, saying HealthLink asked Medtech to join it in a bid for an open tender. Ramayah says that joint bid would have seen HealthLink’s messaging system used should the the contract have been won.

Medtech told HealthLink it is unable to support the proposed HealthLink centralised architecture that restricts choice in terms of messaging carrier for its customers, Ramayah says.

HealthLink says Medtech, which provides software to nearly 90% of New Zealand’s 1,200 general practices, has told it that if the higher fees are not paid it will alter licensing agreements to block access to Medtech’s systems.

HealthLink calculates that the increased fees Medtech is asking for would add between $4 million and $8 million a year in costs to the New Zealand health sector over the next few years. Medtech says this is incorrect.

MedTech chairman Vino Ramayah says the pricing changes relate only to the tender bid now under way. Normal message exchanges are unaffected, Medtech says.

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.

“Medtech Global and HealthLink have worked together collaboratively for the past 15 years, and for the past decade HealthLink voluntarily has paid Medtech an annual fee of $50,000 for Medtech Global’s support of HealthLink’s services,” says HealthLink’s Bowden.

Two years ago, HealthLink launched an electronic referrals system for district health boards (DHBs), he says. 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 a link to its software.

“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 fee of between $42 and $82 per practice per month plus technical support if required, at $200 per hour.

“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.”

Update: In a further statement to Computerworld, HealthLink's Tom Bowden says HealthLink’s system is open and based on industry standards and allows interoperability with any other messaging systems, decision support system or electronic medical record systems.

"HealthLink does not advocate use of a centralised architecture or seek to restrict choice of messaging carrier or any other service component. HealthLink’s success in its field has come about because of its focus on developing systems based on industry standards.  HealthLink is committed to the standards process and invests a substantial amount of time and effort in supporting it," he says.

He also charges that senior Medtech personnel have told medical practices and primary health organisations that HealthLink’s new online eReferrals service is not going to be accessible via the Medtech software unless HealthLink pays the new Medtech single purpose license fee of $500 -$1000 per practice per annum plus the other fees.

"HealthLink suggests that Mr Ramayah reverses this policy and gives an assurance to practices that there will be no charge imposed (either to HealthLink or to Medical practices) for connection to any communications services whether online or messaging based," Bowden says.

As to the suggestion HealthLink is commercially motivated, Bowden says that while this dispute has been prompted by commercial concerns over marketplace behaviour, there are wider issues at stake. These include ensuring that "access to patient information is not restricted or sold to the highest bidder and ensuring that New Zealand’s health sector IT environment remains open, competitive, dynamic and innovative". 

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