A couple of weeks ago the announcement that patient cloud management system start-up MediRecords had won the contract to replace the patient management system used by medical officers employed by Queensland Health who also practise privately, seemed to pass with little fanfare.
Pulse+IT, perhaps our most influential industry newsletter on health technology, subsequently wrote an opinion piece saying that most GPs weren’t ready for the cloud, and that the major primary care vendors, MedicalDirector and Best Practice, had made the decision that their client loyalty and the general market conditions meant they could take more time in developing their cloud offerings.
I am on the board of MediRecords as a non-executive director and I’ve been involved or on the periphery of electronic patient management systems since the start of our original system, MedicalDirector, in 1995. And I think we might all be missing a trick here. A trick of how technology and timing work. And one that GPs, in particular, might need to be careful about in the coming few years.
One trick that Pulse+IT missed in its reporting is the significance of the MediRecords win in Queensland. The installation will be used by 2500 administrators and practice managers to support more than 5000 medical officers. Pulse+IT estimated the contract to be worth about “$1 million over five years”. If Pulse+IT meant $5 million over five years, it still missed the mark by multiples of that figure. It’s a big contract covering a lot of ground.
Not that the money is the important point here. The important point here is that we have a cloud-based PMS servicing one client via, initially, 450 “desks” seamlessly over the web. That’s unheard of so far in Australia. Apparently Primary Health Care’s Helix installations are struggling past 10 users.
The Queensland contract was hotly contested among 13 vendors. So how did a relatively young (MediRecords system has been on the market for less than two years) no-name group, with only hundreds of users on its system as opposed to long-established brands, some with thousands of users, win such a big and important contract?
Queensland Health demanded future proofing in its tender. It specified the requirement for a robust, scalable cloud architecture as the base of any system. And MediRecords was the only vendor that had a viable, scalable, cloud platform offering.
MediRecords is the only full suite, (it includes a patient app, appointments and even a kiosk), highly scalable and fully operational cloud architected patient management system in primary care today.
According to Pulse+IT, the dominant market position of both MedicalDirector and Best Practice, and the stand-off attitude of GPs themselves towards this new technology, makes waiting, or upgrading to older desktop technology if you are at the end of your current technology cycle, an acceptable strategy.
Best Practice has its cloud system under development and founder Dr Frank Pyefinch says he is taking his time quite deliberately to get things right. Estimates vary for the group’s cloud product, called Titanium, to be market ready, but it is likely somewhere in the next 12 to 18 months. In the meantime, Best Practice appears to be working on a patient app that is due for release very soon.
If every Best Practice installation captured every patient on its app then that would be 12 million patients. That’s a lot. And that is probably a very important “lock on” strategy for its customers. It’s one thing to have your doctors familiar and happy with your system, your brand, and to have all their data on your product. It’s quite another to have that doctor and their patients familiar and liking an integrated system, and to have patient data there as well.
It’s a very clever strategy on the part of Best Practice, and it is arguable that it’s the best strategy for its users to have this integration before they have cloud, given how difficult it is to get a cloud system to work in a scalable manner with enough integrations. But those users will need, one day, to go to the cloud. And when they do, bridging the data and the communication protocols between the old desktop architecture and the cloud architecture will be challenging, and probably more so if Best Practice has a patient network to deal with on top of the doctor network.
MedicalDirector has its cloud version on the market already, called Helix. But it doesn’t have a patient app. Nor does it have one for its desktop system. Helix also reportedly lacks some key integrations you’ll find in the two main desktop products.
This occurs because cloud system introduction can be chicken an egg for a vendor. To justify a key integration, you need enough clients using the system. For example, appointment systems such as Health Engine have a very low return to connect to you if you don’t have enough customers using your system. And if it’s a cloud system, then that is a different way of connecting than they are used to.
These things are reportedly holding up, or at least slowing, adoption of Helix by groups outside of Primary Health Care.
Primary Health Care is contractually obliged to roll out Helix, as a part of the sale of MedicalDirector to Affinity by Primary 18 months ago. But that roll-out has slowed down, reportedly because Helix struggles for stability over a certain amount of users per installation.
MedicalDirector CEO Matt Bardsley has so far been a passionate supporter of the move to cloud-based PMS systems and has campaigned quite strongly for the utility of such systems moving forward.
MedicalDirector is owned by private equity, which by definition is private, so it is difficult to get a handle exactly where MedicalDirector is at with its possible technical issues, and the other issues around timing and the introduction of its cloud-system integrations, including its own patient app. But you have to imagine the company is working hard to get things going.
Cloud systems are a big change in all sorts of ways, so there are reasons to be careful in considering changing over. Some of those reasons include:
• You can’t replicate full desktop functionality on cloud systems – not yet anyway
• By their nature, they are a big change in any practice because they are mobile and always on. The main issue is human, not technical. People who have been using one system for nearly 20 years are going to need to adapt, and no one likes to do that. The human factors are usually the most underestimated issue and probably the most important.
• Cloud systems can go down. So can desktop systems, of course. But the nature of downtime for both is very different. Usually desktop systems have some sort of offline workaround, especially because desktops are generally discrete installations, so there is natural back-up in a practice. But if the internet goes down, which it sometimes does, you don’t have a system on a cloud PMS until it gets back. Having said that, banks rely very heavily on the cloud, so it’s largely a perception issue in a change equation.
• You will be faced with that horrible old chestnut of migrating your data, whether you migrate with your existing brand or not. No one likes this changeover.
The flipside of being careful is that being too careful might create significant and long-term disadvantages for any practice that considers and then abandons the idea of a cloud system in the next couple of years.
In terms of replacement cycle and financials, most practices will look to update or replace their PMS every three to five years. This means about 33% of practices around the country will be looking to upgrade their PMS within the next three years at least. In primary care, that is maybe 1800 practices representing up to 9,000 GPs.
Given that there are cloud systems that work today, or are very close to working as we presume Helix must be, then in the next three years you might be faced with one of the most important business and clinical efficiency decisions of your career. Whether to go cloud or not.
Going cloud is without doubt a major decision. The main issue is that you have to rethink how your business is structured and you have to build your business and people around what cloud offers to obtain its enormous advantages. It’s an easy decision to make to stick with the old and familiar.
But it’s possibly a bad decision depending on your circumstances and how fast things are changing around you. After all, if you renew to a new version of a desktop system you will lock in your workflow and culture for another three to five years. And if you do that you might have to sit back and watch the world change radically around you while you wait for your next PMS investment cycle to run its course.
Pulse+IT might have it that you are timing things right. That cloud systems need some maturing time. And you should be waiting for the major vendors, as they have the track record and experience. These are sensible considerations. Both these vendors are good at what they do. In the case of Dr Pyefinch and Best Practice, he has been at it longer than anyone else in Australia and he knows his client base intimately.
But this is all about timing. The cloud is a game-changing technology if you are ready for it.
Bill Gross, one the world’s leading thinkers on what is behind the successful introduction of new technology, and why start-ups pushing this technology succeed or fail, teaches that the critical factor in introducing new technology is not the idea, the technology itself, the funding, or even the people and the team building out that technology.
The critical factor in success is almost always timing. But timing technology is not an exact science, even for all those masters of the universe who make technology investment bets each day. It’s calculated guessing based on the evolving context of a market.
To help us there are some sensible rules to narrow down timing and technology decisions. The most famous paradigm for new technology and start-ups is probably a protocol called PESTEL. This is about looking at the context of a technology introduction with reference to the Political, Economic, Social, Technological, Environmental and Legal factors surrounding that technology.
The ground is very fertile for cloud-based PMS. In terms of when it will actually break out however, the next best advice you’ll get is, you just don’t know, but you do know it’s close, so prepare. If you are ready and can take advantage of the change then you will be in good shape.
If your PMS is due for renewal you are going to be pondering a decision which is at once your single biggest infrastructure cost outside of perhaps rent or dwelling, and critical to your clinical efficiency and outcomes.
Is going cloud right for you?
And what about the incumbents?
It’s unlikely, given their knowledge, management and market share that either Best Practice or MedicalDirector would be wiped out if they were waiting too long. So your tried and trusted vendor isn’t likely to get disrupted out of the market and leave you with old technology.
But of all the PESTEL components in play for cloud PMS, there is some irony so far in that both incumbents don’t have fully operational cloud systems to currently offer their client base. If a GP wanted to change today to the cloud and stick with their old and trusted past providers, they can’t.
MedicalDirector might argue that this isn’t the case with Helix. That Helix is ready for anyone to swap today. If you want to do that, then my (admittedly conflicted) advice is to at least check out the start-up competitor which managed to win the hearts of Queensland Health against a long line of experienced players. After all, Queensland Health isn’t the sort of group that does light due diligence and takes risks.
If Helix isn’t yet up to scrub, my guess is MedicalDirector is working hard at getting it there, and it won’t be long. If Best Practice is moving on its patient app soon, MedicalDirector will need Helix as a market point of difference. And, MedicalDirector has positioned itself as the cloud market leader and campaigner.
Pulse+IT makes the comment that while most practices are content to wait for the cloud and the major vendors to get their systems up and running properly, the big corporates probably aren’t because cloud systems provide the potential for a much better organisational view of things, and that they are great for the bottom line.
If you’re IPN and you’ve just taken over a 20-doctor practice and want to get them on your network, then the difference between being on the cloud and having to move in with trucks, servers, data communications specialists and the like is really chalk and cheese. The old way will cost you a bomb upfront and you will need to capitalise over the next five years and create a complex financial management situation, not to mention the difficulty of actually networking older local server based systems and getting good data out of them seamlessly.
If you are a cloud system, nominally you just need your doctors to have decent devices and bandwidth. That belies the huge issue around training, education and culture that you need to bring with cloud systems. But that is what change is really about. Otherwise, the costs of installation are virtually nothing, and ongoing costs are operational costs and relatively small.
A recent survey looking at the real full system costs for a five to 10 user cloud practice and a desktop one suggested that the real costs of everything for a desktop practice can be up to four times higher over the life of the system.
“Life of the system” is an interesting concept in the context of cloud. Cloud systems tend to be seamless to their users in terms of system replacement. You only need to update your devices really, and make sure your internet connections are good.
So why is cloud an advantage for the big corporates only? Why wouldn’t a five or 10-person practice look at cloud for the same reasons?
And why wouldn’t a single-person practice look at cloud come to think of it? What is holding back your day-to-day GP? Is it just brand loyalty and fear of change?
Largely it is perception and approach to change. The technology is here. And some big practices and organisations are already starting to use it, so there is demonstrable user experience and due diligence to rely on now.
The two-minute pitch for a cloud-based PMS goes as follows:
• It costs a lot less to install and run.
• It makes your surgery interoperable between doctors and even between multiple practices, and it will make them far more interoperable for communications and workflow with your patients – mobile-to-mobile
• It makes your workforce instantly mobile – any worker in your practice can access using almost any device and they can do it at any time
• It is architected for the future – all major integrations will start to become available on the cloud from here on, so your desktop system will eventually be the odd technology out, not the cloud system. We are approaching that singularity now and will likely be there in a year or two.
To the last point here, the Queensland government contract that MediRecords won, was won for one very simple reason. Queensland Health had specified that any system they were going to put in place had to be cloud architected and functional.
Only one vendor could meet that specification.
Queensland Health is a probably the front runner in digital healthcare in Australia among the state governments, but most of the others are now hot on its tail.
Do we think it’s going to be long before other state governments define the cloud in this way, as base architecture to be integrated with them? And we know the Australian Digital Health Agency is already there in principle.
The Queensland Health contract might turn out to be the starting gun for cloud based systems in medical care.
Are the major primary care PMS vendors still right to be relaxed about when and how they introduce their working cloud-based versions of their desktop software?
If groups such as Queensland Health are already demanding future insurance with future technology, and if that technology is actually available and working, is everyone really going to just sit back and wait for the major vendors to decide the timing?
The answer is almost certainly no. I know that because I am privy to how some major GP centres that are renewing their systems are looking at this problem now. If some key GP practices start moving to cloud and become comfortable, will we witness an earlier beginning to significant migration to this new technology?
Another factor not yet considered in the timing equation is the power of the patient to specify over the coming few years.
In nearly all the digital disruption we see in other markets such as travel, banking and advertising, it has been the consumer that has driven the tipping points in timing.
In the PMS market the consumer, so far, is only the GP. But the real consumer of health – the patient – is perhaps not far off now. If Best Practice can get its patient app to fly we might start to see the patient start to gain a lot more influence in how GPs view their systems and technology.
Let’s just say that the Best Practice patient app is a great hit with GPs and their patients. Do we think that such things as a live updated medical record to a mobile, telehealth on demand, appointments and online prescribing will potentially drive some patients to get fussy about who is servicing them?
Will a patient want the cool stuff their friend has, who has a Best Practice-using doctor? Will patients form networks of recommending communities on their own social networks?
It feels like some will.
What are you going to do when your 10 to 20 doctor multi-site practice is coming up for technology renewal?
It feels like the decision to simply roll through to the best upgrade on a desktop system is not as simple as it might have been, even a few months ago.