Telstra to shake up medical care with eHealth kick

In launching Telstra's vast ambition to become a major commercial player in the delivery of health services in Australia, David Thodey sounded more like a health minister than the chief executive of a telecommunication company.

When Thodey made his speech last month, it so comprehensively covered the ideals of the Australian eHealth agenda that it could easily have been mistaken for a speech Peter Dutton should have been making.

There was lots of talk about a health system that is “more connected, more effective and more accessible to everyone.” He spoke of improving services to the bush, reducing hospital and GP visits, cutting back-office cost out of the system and of course saving lives.

These are bread and butter eHealth issues, and as the dominant telecommunications services provider in this country, you would certainly expect Telstra to have a deep interest.

Technocrats see health as being all about connectivity. At its core, the health “system” is about the timely and efficient flow of accurate information between doctors, specialists, pharmacies, hospitals, insurance providers and government and all the other disparate interests and stakeholders that make up the health supply chain.

So it's hardly a surprise that Telstra has a big powerful voice at the eHealth table in this country.

Technocrats driving clinicians?

But Telstra's ambitions are not restricted to driving the technology behind eHealth, or providing the platform infrastructure on which these services are run. No, Telstra Health is getting into the “care” side of the health care business.

Telstra's entry into this market is a game-changer for eHealth in this country. It's one of the tiniest handful of companies with the scale and skill and inclination to drive a national business.

The company has been working on a bunch of related health projects for a couple of years. So, Telstra has been the elephant-in-the-room for some time.

But the breadth of its ambitions for health as a separate P&L has surprised some people. The fact that it has clear ambitions for the clinical side of health has caused alarm.

Australian Medical Association President, associate professor Brian Owler, has already labeled Telstra's plans as “cynical and inappropriate.” The concern, of course, is about technocrats driving clinicians.

Professor Owler also called the Telstra plans a recipe for bad medicine, calling it a “commercial solution dressed up as a health solution.” He was referring to the Telstra ReadyCare joint-venture service developed with Swiss eHealth outfit MedGate, which will enable 24-hour access to GPs, including referrals and online prescription services.

It's certainly different thinking. It is bold and it is definitely disruptive. Telstra sees the billions spent on health as ripe for disruption and clearly believes it can deliver services -- both clinical and eHealth-related telecommunications -- substantially cheaper than competitors.

To the extent that public sector health is a competitor (and it is), Telstra believes it can make a reasonable margin and deliver significant cost savings to customers. And it is clear that governments will be large customers.

Of course, Telstra Retail chief Gordon Ballantyne is not saying how big the business will become, saying simply the company sees it as a “billion dollar opportunity.” No specifics about revenue, presumably because he doesn't want to scare the living daylights out of everyone.

But you get the impression that the company expects to hit that billion dollar marker sooner rather than later. And maybe Telstra will be great at this stuff. But there is nothing guaranteed here, and there are numerous examples of over-reach from telecommunications providers making forays into content (as this service is.)

Get on board or get out of the way

David Thodey and Gordon Ballantyne were both at pains to say that the company's expertise lies in being a provider of excellent communications service. "We are not doctors or health professional," they assured the audience. But the reality is that Telstra will be employing -- through ReadyCare and other services -- doctors and health professionals.

The company is trying to take a softly, softly approach to its entry into the market (difficult, being the elephant in room crowded with vested interests and entrenched relationships.) Last month's soft launch was more a heads-up, telling people the elephant is on the move, so either get on board or get out of the way.

The services will not be formally available until around the middle of next year and there are many unanswered questions about the go-to-market plans. How many doctors? Where will they be based? Brisbane? Bangalore?

And then there is the Medicare rebate, which is not currently available for this kind of consultation. This is the long-game for Telstra. In the short-term, Gordon Ballantyne said vaguely that “companies” would pick up the tab, meaning -- we think -- resources companies looking after the health needs of FIFO workers at remote sites.

A question during the media Q&A about whether Telstra planned to “bundle” health services with its retail telecommunications services drew laughter from everyone except the Telstra executives, who said the company would explore all of its options for leveraging customer relationships.

There are also questions about how eHealth records will be managed -- whether under a Telstra customer number or whether it will use the federal health system's unique identifier, the MyHR  (formerly the PCEHR, or Personally Controlled Electronic Health Record.)

Telstra's less than unequivocal commitment to the standards and practices coming out of NeHTA -- the National eHelath Transition Authority -- is a concern, given the strength of Telstra's retail reach, not to mention its multi-billion dollar warchest.

It is simply not clear what long term impact Telstra's ambitious leap into the health market in Australia will be.

What is certain is that the unveiling of Telstra's voracious ambition for this market is a seismic shift for the way that health services are delivered and paid for in this country.

James Riley has covered technology and innovation issues in Australia and Asia as a writer and commentator for 25 years. Read more from James Riley at www.InnovationAus.com or follow him @888riley on Twitter.