It was a big week for health IT companies and software vendors in Australia and New Zealand, both good and bad. On the positive side, Foxo’s nifty little comms app for linking patients and external referrers to healthcare enterprises through Microsoft Teams was our top story, and HealthLink had a win with the extension of its SmartForms technology to the majority of NSW hospitals under its eReferral program.

An app developed by eHealth NSW in association with Microsoft to allow clinicians to share clinical images was also in the news, adding video-sharing capability. These add-ons to Microsoft Teams are really interesting – Monash Health and Austin Health are using a Teams-based app called Baret that looks quite promising.

And while there was some bad news for ASX-listed companies, rocking that boat was Beamtree, a Sydney firm led by former ADHA CEO Tim Kelsey which was formed from the merger of two small and somewhat obscure companies in Pacific Knowledge Systems and Pavilion Health. It is now making some waves with its AI-powered Ainsoff Deterioration Index early warning system that also looks incredibly promising.

Then there was the not-so-promising news. Hills Ltd, formerly of Hoist fame, has been restructured and re-strategised so many times over the years that it resembles nothing less than a pair of empty trousers left hanging in the breeze. We at Pulse+IT admit we were a little caught up in the excitement back in the distant past when former Telstra MD Ted Pretty took the reins in 2012 and set about completely revamping what was a heavy manufacturer into a tech-focused company with a wide eye on health and aged care. Ted’s vision only lasted three years and since then, the company has really struggled to make a mark.

It did have some good assets – leading nurse call system vendors Merlon and Questek and the assets of Hospital Television Rentals (HTR) that fit in nicely with its security and AV business, a licensing deal with patient infotainment software vendor Lincor, and big plans for sensor and CCTV technology in aged care. However, it was a contract dispute involving Questek and Sydney audio visual firm Stellar Vision, which was then active in patient entertainment systems, that has finally seen the company’s undoing.

The drama concerns a bid to install Stellar’s technology along with Questek’s nurse call system at Western Sydney LHD way back in 2014. Stellar has long alleged some dodgy dealings that saw Hills inherit that contract when it bought Questek and ushering Stellar out the door. The dispute hit the courts first in 2016 and went through mediation before finally being tested in court in 2021, when Stellar’s suit was thrown out. Stellar has been dogged in its pursuit, however, and was not going to waste the almost $2m it had already spent on what it saw as a clear case of breach of contract. The Court of Appeal in May agreed and awarded a big judgement against Hills. Despite Hills claiming up to $17m in forward revenue and plans for a capital raising, it seems it simply does not have the resources to pay out $5m plus costs.

Hills has called in the administrators and while it may yet survive, it is a salutary lesson in just how tough the health IT market is. That may come as a surprise to those investing stupid sums in listed stocks, including those who pushed Doctor Care Anywhere (DCA) to ridiculous heights when it listed on the ASX in January 2021, raising $102m. We heard at the time that the UK company, which had no clients or even firm plans for Australia, decided on the ASX because there was so much silly money to be had. Since its listing, DCA has seen its share price plummet from a high of $1.47 a share to its current trough of 4c.

It has also had to have a fire sale of GP2U, the venerable but tiny telehealth institution born and raised in Tasmania that it bought for $11 million in 2021. DCA has had to flog GP2U off to My Emergency Doctor for half a million in cash and $2.5m in MED shares, and meanwhile has dumped its Australian executives and headed back to the UK where it at least has some customers.

My Emergency Doctor has snapped up a bargain, and good on it. MED, unlike lots of other telehealth companies too numerous to mention, has gone about its business of growth by securing good, healthy, long-term contracts to provide essential virtual emergency services to a range of healthcare organisations, both public and private, including Eastern Health, a couple of PHNs for aged care services and most recently Ambulance Tasmania.

Like MED, there are some great telehealth companies out there but there are also loads that have variously been described as “cowboys” or worse. Silly money has also accompanied this growth. Despite the recent decision by the Medical Board of Australia to crack down on text-based prescribing, start-up companies such as Eucalyptus continue to attract huge sums. According to Smart Company, Eucalyptus started up with an $8m raising, followed by a $30m plunge and just six months later raised another $60m. Just last month it added another $50m in its latest round. It is valued at almost half a billion dollars.

All of that money for a company that flogs weight loss medications, erectile dysfunction brands and a site offering fertility testing and pre-natal vitamins and supplements. None of this is public money so fair play to them but it’s a shame that the quality firms out there providing essential care to patients to help out overstretched GPs and hospitals are often overlooked.

Harrumph. That brings us to our poll question for the week:

Are there too many cowboys in the telehealth sector?

Vote here and leave your comments below.

Last week, we asked: Is your organisation planning a digital front door strategy? Most said yes – 75 per cent to 25 per cent – but the number of votes was very low so we don’t know what to read into this.

We had a few comments though: here’s what you said.