Auckland-based electronic health records developer I-Health is suing troubled UK-based health software giant iSoft for breach of contract and breach of the Fair Trading Act.
I-Health alleges iSoft breached a sale agreement by substantially ceasing development of the HealthViews software it bought from I-Health in early 2004. It also alleges the iSoft Group failed to market the software worldwide and to license it at market price, instead selling it for substantially less than the list price.
A statement of claim lodged with the High Court in Auckland also states iSoft “knowingly and deliberately sought to replace HealthViews in major reference and other sites with another of the iSoft Group’s products, Lorenzo.”
The Australian and New Zealand iSoft subsidiaries named in the statement of claim deny I-Health’s allegations.
Many district health boards use I-Health’s software, according to company founder Brian Allen. He cites the Northland, Waikato, Lakes, Tairiwhiti, Pacific (Bay of Plenty), Otago, Southland and West Coast DHBs as customers.
However, Allen was not prepared to elaborate much further on the case except to say I-Health first notified iSoft of its concerns just five months after the sale was inked.
ISoft was not prepared to comment.
ISoft bought the businesses of I-Health and associated company Galen Group in January 2004 for $1.48 million with additional payments over five years of nearly $25 million. Richard Craven, chief executive of iSoft Asia Pacific, said at the time the acquisition was an exciting one as it extended iSoft’s product offering.
“Most significantly, this purchase augments iSoft’s product portfolio with I-Health’s proven, web-based Electronic Health Record (EHR) technology. The need for EHR solutions is gathering significant momentum at present as governments and healthcare organisations globally look to establish interconnected models of patient care and deliver consolidated patient information ubiquitously,” Craven said.
Electronic Health Records seek to create a comprehensive record for a patient, combining hospital records with those of GPs, specialists and community caregivers.
ISoft is one of two major software suppliers of patient management systems to the New Zealand health sector and the major software partner involved in the UK’s National Programme for IT (NPfIT).
NPfIT is attempting to create a single integrated software system for the whole of the British National Health Service.
The primary contractor for the project is services giant CSC with iSoft contracted to deliver the bulk of the software.
However, after repeated delays in delivering its next generation health software — the Lorenzo system named in I-Health’s statement of claim — iSoft is struggling to retain the loyalty of its UK customers, according to UK media reports.
NPfIT officials have developed a list of alternative software suppliers to be used in case Lorenzo, being developed in India, does not surface soon, UK technology site The Register reports. Lorenzo was originally due by 2004.
Last July Computerworld reported iSoft made a series of profit warnings and shed nearly 90% of its market value. The company is listed on the UK FTSE 250. At the time, the company had delayed publication of its full-year results because it has been unable to conclude negotiations with its banks, according to The Times.
ISoft began 2006 trading at £4.00 (NZ$11.8) but has since dropped to as low as £0.49. The company also wrote to all its clients in New Zealand and Australia to reassure them about the business’s viability. Eighteen of New Zealand’s 21 district health boards were clients.
Nigel Lutton, iSoft Australia and New Zealand managing director, told Computerworld at the time that many stories about the company have been speculative and “a little hysterical”.
“There is no board consideration of divestment or sale. The group has no intention of disposing of any operations,” Lutton said.
In October, however, iSoft put itself on the market and in February, it emerged that Australian health software developer IBA was in the running to acquire the company.