Health software market heats up

Australian purchaser sees 'significant potential'

Competiton in the New Zealand health software market has heated up with the purchase by IBA of Wellington-software company E-Pi Ltd.

Australian-based IBA is paying $A3 million for E-Pi plus a differential consideration of $A1.6 million based on sales forecasts. E-Pi, which was established in 2002, has annual revenues of more than $2 million.

IBA, which has had a presence in New Zealand since 1988, has just three staff currently, but this will grow to 29 with the purchase of E-Pi, whose general manager, James Rice, will become country manager of IBA.

E-Pi delivers services to ten of New Zealand’s district health boards, while IBA has contracts with seven DHBs.

IBA marketing communications director Greg King says E-Pi’s hospital pharmacy system has been chosen in the past nine tenders in New Zealand. “It is capable of being implemented in a multi-hospital environment and integrated with a full clinical decision support system and has significant potential to deliver improved pharmacy, clinician and medication management services in Australia’s 1,200 public hospitals.”

King says IBA has recently made two acquisitions in Australia and is looking to make more, both there and in New Zealand.

He describes the purchase of E-Pi as a strategic decision. It is certainly that, given the dominance that iSoft has achieved in recent times in the New Zealand health market, most recently with its purchase of five DHB contracts from Hewlett-Packard.

UK-based iSoft entered the New Zealand market in January by purchasing i-Health and its sister company, the Galen Group.

Numbers provided by iSoft to the Commerce Commission in its application for approval to buy the HP sites show its market share by hospital is 42.4% compared to IBA's 12.3%; by customer 34.8%, compared to IBA's 14%; and by bed count 52.7%, against IBA's 15.8%.

iSoft’s Australian managing director, Nigel Lupton, is dismissive of the E-Pi purchase, describing its as “quite dubious”.

“They’ve overblown the value of the transaction,” he says. “E-Pi is about technical services rather than technical products.”

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