Health minnow’s big US splash
Australian minnow Pro Medicus has muscled its way into the US, beating global giants to secure sought-after contracts in a health technology industry that boss Sam Hupert says Australia could learn a lot from.
Dr Hupert, who started the Australian-listed company in the early 1980s, said the past four years had been transformational for Pro Medicus, driving the share price from below $1 to more than $8.
Melbourne-based Pro Medicus, which also has offices in Berlin and San Diego, makes software that allows large healthcare institutions to store and transport images.
Dr Hupert said the “step change” in the company started to take shape in late 2007 when he decided to target a company that did digital imaging.
“We had the billing side but we interfaced to third parties for the visualisation display of the image.”
In February 2009, in the depths of the global financial crisis, Pro Medicus bought Visage Imaging, giving the company an important footprint in the US and the backing to compete for contracts against dominant giants such as Siemens, GE and Phillips.
Dr Hupert said when the company won its first significant contract in the US there were many sceptics who believed the company was too small and could not deliver on the contract.
“We have proven them all wrong and we have gone further, faster, than most people have imagined in the US,” Dr Hupert said.
“We have built a portfolio of key clients. Normally you would have to be in the market for 10 years before these companies would look at you. We defied that philosophy by getting the clients we have.”
US clients include the globally recognised Mayo Clinic and Yale New Haven Health, which is affiliated with Yale University and Yale Medicine.
Pro Medicus could have missed the US opportunity, with Dr Hupert highlighting that when he first saw Visage, he almost walked past it because it was a specialty product, largely focused on 3D imaging.
“We spent a fair amount on R&D, developing it from a speciality product to a total product, and clearly that has made a huge difference.”
Dr Hupert said his company had about an 18-month, or longer, technology lead on some rivals.
“It’s that original platform we have that we have been able to develop that others have not been able to. It’s not just one technology, it’s an amalgamation of 15 to 20 technologies.”
When Dr Hupert started his career as a doctor, he says the word computer was rarely used, but he had an early sense it would become the new form of literacy.
The initial product his company offered clients was for practice management, such as billing, which was targeted to deal with the nuances of Medicare and billing requirements in Australia.
Dr Hupert expanded the system into radiology in the late 1980s, giving it first-mover advantage when that industry then moved from hard copy to a digital environment in early 2000.
“We realised there would need to be a link between business management, patient scheduling and reporting on screen, and tying the them all together,” he said.
“We provided one of the first single-button, single-click type environments, where the client clicked on a patient’s name and all the images and past reports on radiology came up at once.”
The US success has given Dr Hupert an insight into the industry there. He said compared to Australia, the global powerhouse had leapt ahead in this field.
That was partly because the US government effectively mandated that large health providers had an enterprise medical record.
“Australia has to play catch-up there. There are plenty of Austra- lian companies that have this great technology that can be used in Australia; it’s a shame that we tend to work more overseas than here,” he said.
“The technology is available, there’s no reason, other than funding and bureaucracy, as to why those technologies wouldn’t work in Australia.”
Pro Medicus chief Sam Hupert: ‘We have gone further, faster, than most people have imagined in the US’