Following in the footsteps of other Australian states, Tasmania and Western Australia (WA) recently provided details of their plans to implement state-wide electronic medical records (EMRs) for the first time.
Earlier this month, the WA government said an A$100M (US$65M), first phase state-wide hospital EMR rollout would include a digital medical record with single sign-on technology and virtual desktop infrastructure at around 80 public hospitals.
This first phase is part of an A$1.2B (US$782M) digital infrastructure and public hospital capacity upgrade programme in Western Australia. There is, at this stage, no indication of when the first phase contract will go out to tender or be awarded.
WA’s announcement comes weeks after Tasmania issued a request for proposals (RFPs) for its first state-wide EMR and ambulance electronic patient record. The A$150M (US$97.8M) first phase will, the state government said, be rolled out over four years. It is part of an A$475M ($309.6M), decade-long digital health programme on the island.
The Signify View
It was only a matter of time before WA and Tasmania embarked on their journeys towards state-wide EMRs. Signify Research described in this recent Insight how the move to state-wide contracts was shaping the Australian EHR market in 2023, and confirmation that these states are now moving forward reinforces our view.
The seeds of WA’s EMR plans were sown in 2019 when the state government published its digital strategy vision. A state-wide EMR lay at the heart of this vision, and the state government has set a July 2029 target to have a ‘functional’ system in place. Implementation will take place in four phases, although it is unclear at this stage when vendors will be invited to submit requests for proposals (RFPs) for the first phase contract.
Tasmania’s story is similar in many ways. The government in Australia’s second-smallest state published its digital health transformation strategy 18 months ago and, as in WA, a state-wide EMR is a central pillar of this. Tasmania, however, has higher aims: it sees an EMR as being the key to creating the first fully-integrated healthcare system in Australia.
Land of Opportunity
Tasmania’s goal to establish the country’s first fully-integrated healthcare system is bold but viable. The state’s current system is rudimentary, with most health record inputs still done manually. There is no installed EMR base on the island, although there is a basic patient database that was implemented more than a decade ago by iSOFT (which later became CSC, DXC and now Dedalus). Tasmania has just four large state hospitals, 14 regional hospitals, seven private hospitals and 144 primary care practices with fewer than 1,000 GPs in total.
Contrast this with other, much more populous states in Australia, like New South Wales and Victoria, which have various iterations of EMR systems spanning more than a decade in some cases. In Tasmania, with a population of little more than half a million, putting in place a system that seamlessly connects hospital and primary care EMRs should therefore be relatively achievable. But, as state-wide EMR deployments in other Australian states have demonstrated, there are clear challenges.
Inflation’s Curse
One immediate challenge facing both WA and Tasmanian rollouts is inflation, which ran at 7% for the year to March. Although it is starting to ease, inflation will impact project budgets, scopes and vendor margins. A$100M (US$65M) in WA and A$150M (US$97.8M) in Tasmania will not stretch far in the current high inflation environment and, in other state-wide deployments elsewhere in Australia, funding top-ups have been needed.
In WA, another challenge is its sheer geographical size. It is the country’s largest state by some distance, and so state-wide EMR implementation in often remote hospitals presents immediate logistical hurdles. Once the EMR is in place, providers in WA face the additional challenges of patient engagement, especially in remote communities that lack good communications networks.
Muscle Flexing
Despite their relatively modest value, the contracts in WA and Tasmania will be seen as another good opportunity for international vendors to flex their muscles and experience on state-wide programmes. In WA we’d expect to see the usual cast of contenders to include Epic, Oracle Cerner, Altera, and, InterSystems and MEDITECH, all of whom have experience (both good and bad) on Australian state-wide contracts. These names will probably also be in the frame in Tasmania, but there could also be interest from Telstra, in partnership with Alcidion, a UK-based data aggregator and Dedalus, which also has a sizeable Australian footprint.
Any involvement by Telstra would be significant in the sense that Australia’s leading EHR vendor (by revenue) has never been involved on a state-wide contract, focusing instead on individual hospital, ambulatory and long-term care markets in Australia where it is the undisputed market leader. Given Tasmania’s goal to create Australia’s first fully-integrated system, and without the ‘baggage’ of legacy EMR systems in other states, Telstra might see this a good opportunity, particularly with its portfolio of integrated care and PHM offerings.
Among the other vendors who will be competing in both WA and Tasmania, Oracle Cerner may feel it has a point to prove, having lost out last November to arch-rival Epic on a massive triple-digit-million dollar contract in New South Wales. This 220-hospital contract includes the replacement of nine legacy Cerner and Orion Health EMRs and six Cerner and Dedalus (legacy DXC) patient administration systems. Oracle also lost out to Altera in Victoria on a large health information exchange (HIE) project.
Signify Research stated last month how Altera would need to leverage its position in both Victoria and South Australia (where it is rolling out its Sunrise EMR and PAS solutions) to grow its business elsewhere in the country. WA and Tasmania could be a route forward, 12 long years after winning its Sunrise EMR deal in South Australia.
InterSystems, which is delivering the first phase of its A$259M Acacia EHR system state-wide in the Northern Territories is also competitively placed on the two new state contracts up for grabs.
The principal challenge for all vendors in Australia is how to compete with Epic, which continues to gain share in the country at others’ expense. While winning the big New South Wales contract from Oracle Cerner is arguably Epic’s most audacious move in Australia, there are also parallels between Tasmania and its state-wide contract in the Australian Capital Territory (ACT). Like Tasmania, ACT is relatively small in size and population, and at A$151M the contract size is similar to Tasmania. It is reasonable to assume Epic will be in the running both here and in WA.
Death Knell?
Although there has been no state-wide EMR procurement in WA or Tasmania until now, there has been intense competition to win new EHR contracts in both states, particularly as hospitals build on the functionality of legacy PAS solutions. EMRs have been procured via individual contracts with hospitals and local health networks. A different set of vendors tend to compete for these smaller acute contracts. For example, Telstra Health, Altera (specifically via its Australian-acquired operation Core Medical Solutions), InterSystems, InfoMedix and Alcidion. In the move to state-wide EMRs in WA and Tasmania, smaller vendors could be left out in the cold unless they partner up (e g like Telstra and Alcidion), particularly in the public hospital market (there will still be opportunity in the private market).
Greenfield Opportunities
By global standards, Australia is a relatively small, yet mature EHR market, where administrative and operational EHR implementations are advanced, and a transition to clinical systems and data integration and information sharing is now driving growth.
The fact that WA and Tasmania are only now moving to state-wide contracts is a bit of a throwback to several years ago when the first state-wide EMRs were being established in other states. International vendors have not found state-wide implementations easy given integration and localisation challenges, but these experiences will be valuable now. Telstra, too, may feel it is time to flex its muscles and local knowledge for the first time on state-wide implementations, with Tasmania the obvious option.