Vertical markets - Carry on screening

As more and more healthcare sectors discover the benefits of IT, dealers should stand by to give them a helping hand, says Sean Hallahan.

The healthcare sector is one of the few vertical market segments toalers should stand by to give them a helping hand, says Sean Hallahan. have had an operating system written especially for it. Originally and appropriately called Mumps, the system was written for minicomputers - mainly the Digital PDP series. Mumps - the Massachusetts General Hospital Utility Multi-Processing System - has been renamed M Technology and is still widely used in the medical world. Strictly speaking, it has evolved from a pure operating system to a language and database running under NT, Unix and other OSs.

In 1991, the Tory government introduced a series of reforms in the health service which resulted in NHS trusts, fundholding general practices and the internal market. The falling cost of hardware had already brought the benefits of computerisation to many GPs, while hospitals have always been heavy users of IT in specialist areas such as pathology laboratories and general administration.

The health service is not entirely unique in its requirements, but it does call for some distinctive features. Security is a critical factor because of the need for patient confidentiality. Also, the complexity of medical technology may make it necessary to adapt word processing dictionaries or purchase a package tailored to the health sector.

ON THE RON TRACK

The health service tends to be one of the early adopters of technology.

IBM has produced a medical and radiological software package, called Medspeak/ Radiology, to run with its Voice-Type voice recognition system. The package has a vocabulary of 25,000 words.

The Computing Services & Software Association (CSSA), the trade body for the software industry, has two groups devoted exclusively to the health sector - the Healthcare Group and Primary Care Suppliers Group.

The Healthcare Group represents the interests of the software industry in the large hospital sector. The GP Suppliers Group carries out a similar role for the family practitioners.

Selling into the NHS is no easy matter, say those who are active in the field. In many ways the NHS resembles a large corporation, but there are significant differences. Ron Cowie, principal consultant at Cowie Associates, which specialises in the health service, believes there are wide ranging differences between the trusts. 'If you want to sell into the health service it is essential to have people who know the structure. The basic structure is the same up and down the country, but the way it is put into practice varies,' he says.

IT funding in the NHS used to be reasonable, but it has fallen off in the past 12 months, according to Cowie.

Because the NHS is a public institution, companies selling into the area need to able to cost-justify their sales. 'To be successful when bidding for an NHS contract, you need a very focused strategy and be able to link the cost with measurable improvements,' says Tim Clarke, marketing manager at Specialix.

Ray Jordan, solutions director at Trident Health Care, endorses Cowie's view that it is vital to understand the healthcare market and its structure before even attempting to sell into the sector. According to Jordan, there is very little interrelationship between the three primary groupings within the NHS - the hospital or acute sector, the general practitioners and the more specialist X-ray, pharmacy or pathology systems. 'Healthcare is probably the largest industry in the world, yet there is no dominant player. Even IBM has come and gone,' he says.

The very nature of the health service militates against the purchasers willing to pay for additional services from their IT supplier. Because medical provision is something everyone takes for granted, and the profession itself is willing to provide it, customers are reluctant to pay extra for the sort of services supplied by IT companies. Jordan offers as an example a GP on call.

'He may be out watching his five-year-old daughter acting in her first play when his bleeper goes off. He knows he has to go and see a patient, despite the fact that it is disrupting his family and social life, and he sees no reason why he should pay his IT supplier an additional fee for providing the same call-out service.'

Another problem is that there is a surfeit of legacy systems within the health service. Many of these are old and ought to be replaced, but the conversion to newer systems often proves impossible because of the critical nature of the data they hold. 'There are 23 major GP suppliers in the UK and it is a static market,' says Jordan.

'We have more advanced GP patient systems in the UK than anywhere else in the world, including the US, which tends to concentrate on administration.

The problem is that you have to get to the fifth largest system before you come across a Dos-based system.'

MUMPS AND BUMPS

According to Jordan, there are still a large number of Mumps, Unix and Bos (business operating system, which made a brief appearance as an early rival to CP/M and Dos) legacy systems around in the NHS. One of the problems of selling into the health service is that it is traditionally a fragmented market, covering everything from patient information systems through pathology laboratory systems. Many of these systems are incompatible but the legacy data needs to be preserved.

CDS Group is a software house and Var that specialises in the medical sector, particularly in pathology laboratory systems. CDS marketing executive Yvonne Brade reiterates the warnings that dealing with the NHS at any level is not easy. 'Businesses that have not worked in the health sector before expect a quick turnaround of profit on a sale and they will not get it,' she says.

The procurement process is also long-winded and cumbersome. CDS, for example, will initially deal with the pathology department to ensure that its product, Telepath, meets the department's requirements. The software must support the analysers and instruments that the path lab uses and, where possible, link into the hospital's IT system.

'Initially we work at departmental level with the path lab, but once we have convinced them, we may have to convince the IT department and the NHS trust,' says Brade. 'There are a lot of decision makers in the NHS, which is why it takes a long time to complete a contract, and this puts many suppliers off. If you are going to go into the health sector, do so with your eyes open.'

The network computer (NC) is beginning to penetrate the health market, not because of its low price but because it has significant technical advantages over the PC. Until the advent of the NC, PCs could not be taken into an operating theatre because of the danger that emissions would interfere with sensitive medical equipment.

Because NCs have no moving parts, such as a disk drive, emissions from the machines are reduced to a minimum.

WYSE MOVE

Wyse has just produced a box aimed at the hospital sector. Marketing director Julie Hewitt admits that at about #1,800, the machines are not cheap, but she points out that a PC would cost roughly the same and would not be allowed in an operating theatre.

There is also the question of patient confidentiality. The temptation to steal a PC containing a patient's medical records is removed when an NC is used, because all the data is stored on a central server and downloaded when necessary.

Hewitt shares the view that it is necessary to understand the workings of the health service to sell into it successfully. 'But you also need to understand the language that the medical profession uses if you are going to make any headway,' she says.

AAH Meditel is a software house which specialises in selling to GPs, NHS trusts and hospitals. 'If you are selling into the primary care sector - the GPs and local surgeries - you need to convince them that the system will work and be easy to use. When we resell the hardware on which our software runs, we have to ensure it will work,' says Steve Payne, AAH Meditel marcoms manager.

According to Payne, one of the difficulties faced by companies selling into the sector is knowing who has the purchasing power. 'Resellers should try to get into the market because the volume is there, but you need to know who is doing the purchasing and who holds the purse strings.'

Even when it comes to non-clinical products, selling to the NHS can be a complicated business. Geac Smart Stream has just completed the sale of #250,000 of hardware and software to the Wiltshire Healthcare Trust.

The Smart Stream package includes financial software, decision support and budgeting modules and the system will run over an Ethernet-driven wide area network running under Windows NT.

According to Dave Maguire, healthcare business unit manager for Geac, the people he had to convince were the IT director, the financial director and the chief executive. Negotiations began in December last year and the system went live in October.

'You have to have a proper price structure for the vertical health sector and give greater levels of service,' Maguire says. He warns that the health market is intensely competitive and vendors need to plan ahead if they are to make any impact on trusts and general practices.

The healthcare sector's IT demands are extremely diverse, ranging from systems for use in general practice, to laboratory and instrumentation systems, to accounting and general business packages. Unlike many large commercial organisations of comparable size, there is no central purchasing strategy.

HAVE A CHEQUE UP

At the end of the day, the cheques are signed by the financial director and CEO of the NHS trust. But before that stage is reached there is a laborious process of selling at departmental level. Because of the way health service computing has grown in the past few years, there are a large number of legacy systems, many of which are incompatible even within the same hospital.

Many of the software houses and Vars involved in the healthcare sector are specialist firms that have been operating in the sector for many years. While some GPs may go along to their local PC dealer or one of the superstores, the majority purchase their hardware and software from these specialist companies.

The likelihood is that there will be an increase in demand for IT equipment from the healthcare sector over the next few months because of the number of NHS trust schemes which were brought into being by the Tory government's private finance initiative.

The prospect of an increase in orders may tempt some resellers to chance their arm in the market, but they should be aware of the constraints which bind the purchasing authorities and not expect a quick result or profits.