12 September 2016

Why has MedicalDirector swapped CEOs?

KnowCents Practice Management

Australia’s largest patient-management system provider, MedicalDirector, has quietly changed its CEO of nearly three years, Phil Offer, replacing him with Matthew Bardsley, previously the Chief Innovation and Information Officer at Primary Health Care.

Although it only came to light last week that Offer had been replaced – he has been seen around the traps spruiking the new cloud-based version of MedicalDirector at various events – it is apparent the change took place as a result of MedicalDirector’s acquisition by private equity around five months ago.

Bardsley told The Medical Republic the change had been largely kept internal, but when the group moved under their new owners, he had left Primary to take the CEO role and Offer took on the COO role.

Offer had previously reported to Bardsley inside Primary Health Care, but as CEO. Since that change, Offer has been seeing clients and selling the new cloud version of the product, Helix, but few people actually realised a change had taken place.

Offer had only in the last couple of weeks decided that he would like to move, Bardsley said.

He was leaving with the best wishes of the company and had done a fantastic job of guiding the business while it was under Primary’s wing.

The shift to put Bardsley in charge is likely an indication that the new owners want more speed at the pointy end of the business – technology.

Bardsley has been a long-time presence at MedicalDirector as a tech lead and manager. As CEO his immediate focus must be the launch of Helix, which, along with the yet-to-be-released, Titanium, from Best Practice, now trails some start-ups in the cloud space.

The race is on between the major providers of patient management systems in Australia to build cloud-based versions of their software so they can do for medical practices what Xero is doing to small business.

Neither of the two major providers has a working product yet. MedicalDirector launched Helix at this year’s GPCE in Sydney and followed up with demos in GPCE Brisbane last week. But in neither showing was anyone able to see it working independently of the MedicalDirector handlers, and it is understood that the timetable to a usable version is being extended into next year.

Bardsley says Helix is now being installed with its first clients and it is on track for a full commercial release in the first quarter of next year.

Best Practice’s Titanium is said to be due mid next year. Its launch was announced in September last year at the annual Best Practice get together on the Gold Coast, but not a lot has been heard since then.

It is understood Best Practice is currently taking a lot of market share from MedicalDirector on the old desktop versions of the software, which makes the impending battle for share of the cloud market potentially intriguing. It might mean that Best Practice is actually the market leader in GP installations, something it has been claiming for some time but which few actually believed. It might also partly explain why Offer has gone.

In the meantime, a few start-ups appear to have the jump on both the market leaders in terms of cloud functionality. The frontrunner is likely to be MediRecords, which launched with a fully functional cloud offering a few months ago. It is understood to have around 100 current users but according to CEO Jon Marshall, the group has had has decided to go a bit slower in order to make certain the product is meeting and beating customer expectation.

“We actually underestimated demand”, he told TMR. “Our initial group uptake was much bigger than forecast so we had to decide whether to take on more than planned and risk that weren’t going to execute well on customer experience. We’ve decided to stick to the plan. We think we’re first out of the blocks and have the time. We don’t want to get it wrong.

“Although the efficiencies of the cloud will undoubtedly revolutionise some of our clients’ businesses we can’t ignore how big the change to being so free and mobile is in terms of work practices. We want to make sure we are with our clients on that journey and that they are comfortable.”

Offer told TMR a month ago that although attitudes were changing fast, the cycle of technology replacement for doctors was a complex one, which involved lots of decision making, including investment timelines.

Bardsley isn’t too worried about the start-ups just yet either. He explained that the name Helix was given to the cloud version of their software to convey that there was 20 years of “DNA” in the development of MedicalDirector. This DNA is being inserted into the Helix cloud platform. “This sort of knowledge will be very hard for a start-ups to emulate,” he said.

“Helix is a platform that is going to provide a huge uplift in value for our customers. This is an iPhone moment for the sector. We can feel that there is real desire for something new and Helix is it, we feel.”

Other new entrants include Putty, HealthKit, Cliniko and Clinic-to-Cloud, but there is quite a bit of confusion emerging over how functional some of these new entrants actually are. Healthkit was quoted in the Australian Financial Review some months ago as having a market share approaching MedicalDirector’s, implying it competed with the MedicalDirector directly.

The AFR article states that: “HealthKit provides software on the cloud that integrates patient records, invoices, diary bookings, financial reports and Medicare claims for practitioners and allows patients to easily search for doctors and specialists.

“Ms Hardacre [the founder] said the business was closing in on its biggest competitor, MedicalDirector … and the money [$1.6m from a recent funding round] would help it become larger.”

However HealthKit is not a fully functional patient-management system like Best Practice, MedicalDirector and MediRecords. It features an “open notes” application with an appointment and booking module similar, in some respects, to Healthengine.

This has been confusing some doctors who are looking now for cloud functionality, but also a fully-featured clinical and financial system that does all that MedicalDirector and Best Practice have done in the past.

Both Bardsley and Marshall told TMR that they didn’t believe Healthkit was actually in the cloud patient-management system market. “We hardly ever come across it with our customers,” said Bardsley. “Definitely not in the sense that it is a competitor to what we do.” He added that “the AFR story was pretty strange”.

HealthKit claims in a recent press release announcing a partnership in Telehealth with CSIRO Data startup Coviu that it “is a cloud-based platform that combines practice management software for private practitioners (medical specialists, GPs, and allied health) with an integrated directory and portal for patients to track and manage their health”.

The group, which is based in Melbourne, claims it has more than 15,000 health practitioner users locally and that is now the largest health practitioner directory in the country with more than 220,000 listings. On traffic comparison analysis site SimilarWeb, Healthkit has an Australian Country rank of 3,650 and had traffic of 200,000 pageviews in August while long term booking engine and directory Health Engine has an Australian Country rank of 862 and traffic of over 800,000 pageviews in the same month.

Disclosure: The author holds a 0.8% share investment in MediRecords.