What lies between the balance sheets
It's reporting season for publicly listed companies in Australia and perusing the balance sheets always throws up some interesting stuff, like Telstra Health's $77 million write-down of goodwill on a couple of it assets and Primary Health Care's huge $587 million impairment from its medical centre business.
We don't often follow the fortunes of private hospital operator Healthscope but we had a look this week and discovered that just as it has exited the Australian pathology market, it has now removed itself from medical centres too, selling its 43 standalone practices to Singaporean outfit Fullerton Health. It still has its toe in the New Zealand pathology market through its ownership of Southern Community Laboratories though, with its new Wellington lab fully automated and digitised and pretty close to 100 per cent of pathology orders and results through this lab now electronic.
Primary's results would certainly have been a surprise for those who believe there's lots of money to be made in general practice. Primary as a corporate master seems intent on throwing off the reputation of its past and being nicer to its GPs, which has led to good results in new recruits and retention of existing practitioners but may be blamed for its lower margins. The company is about to begin an implementation of the cloud-based Helix clinical and practice management system from former subsidiary MedicalDirector, a roll-out that will be fascinating to watch to see if it finally does shake up the on-premise v cloud market in Australian general practice, just as has happened in NZ.
Our most read story for the week concerned Telstra Health, naturally. We've mentioned before that if we just put a few certain words in a headline we are guaranteed to get hits. For most publications those words involve sex, sport or Donald Trump but for us, it's Telstra Health vying with the My Health Record for the most eyeballs. This story was no exception and with the news that Telstra had written down some goodwill, we were asked if we thought it spelled the end of the telco's foray into health IT.
Not for the time being, was our answer. Health was always a long-term play for Telstra and it was never a matter of earning much from each individual asset. What Telstra Health is eyeing up is large contracts with government and private enterprise such as the National Cancer Screening Register and various telehealth services, and it's no secret that over the last year or so the various companies it snapped up have been merged into four or so different business units – aged, disability and community care (ADCC) is one, and hospitals is another.
While it's entirely possible that Telstra will get bored with Telstra Health and sell it off, the division is so small and the overall wealth of the company so large that a $77m loss is a mere blip. And Pulse+IT had a chat to a few Telstra Health staffers at the HIC conference recently and they've got some seriously interesting stuff going on. We'll have a look at the balance sheet next year and see if that changes.
This brings us to our poll question for this week: Do you think Telstra will stick with its health division in the long term? Sign up for our weekend edition to vote or leave your comments below.
Our poll last week asked: Would you consider dumping your EMR and reverting to paper? Looks like that drastic step isn't favoured by the majority: 32 per cent said yes, while 68 per cent said no.