Telstra Health aims high for revenue, international expansion

Telstra’s health IT arm Telstra Health is aiming for revenues of $500 million by the 2025 financial year, and has also set its sights on further international expansion following its joint venture with PowerHealth Solutions.

In addition to revenue from its recent purchase of MedicalDirector, the company is seeing rapid growth in its virtual health and remote monitoring solutions, as well as in residential aged care, where it is the market leader.

Telstra Health managing director Mary Foley told a Telstra investor day today that its portfolio now covered the entire health and aged care ecosystems, from primary and community care to pharmacy, hospitals, aged care, population health and data and analytics.

The company recently bought a 70 per cent stake in costing and revenue solution vendor PowerHealth for $95 million, along with its biggest purchase yet with MedicalDirector, which it recently secured for $350m.

The acquisitions add to its broader platform including the aged care software market leader formerly known as iCareHealth, part-ownership of Fred IT, the hospital assets of Emerging Systems, which have been rebranded as its Kyra hospital platform, community care platform Communicare, secure messaging vendor Argus and in the UK, the Dr Foster data analytics firm. It also has a thriving remote monitoring platform in the virtual care sector.

Professor Foley told investors that she expected the company to grow to be a $500 million revenue business by FY 25, contributing to Telstra’s T25 growth targets.

The growth strategy is based on three key pillars, she said.

“Firstly, as a business we are strategically well positioned in a growing market,” Dr Foley said. “We have achieved strong organic growth over recent years and we expect this to continue and accelerate with our recent acquisitions.

“Secondly, we already have a very well established presence in the United Kingdom through Telstra Health UK, and we expect to continue to grow globally as an organisation.

“And finally, through our ability to offer new solutions to the market as we join the dots across market segments to offer platforms that assist governments and health and aged care providers to solve some of the most complex problems in how they deliver health and aged care.”

The PowerHealth Solutions JV has also added Canada and parts of the Middle East to its reach, she said. The expectation was that the PowerHealth footprint would allow Telstra Health to accelerate international growth as it took targeted offerings to these markets.

“Some of our customers include public health systems and hospital authorities in Australia, Canada, Hong Kong, as well as other national governments, public and private hospital groups, Aboriginal Community Controlled Health Organisations, pharmacies, general medical practices, aged care providers and a range of other providers in the health care system.”

Professor Foley said virtual health monitoring and hospital in the home were segments that are growing rapidly.

“Our virtual care solutions support care delivery in the home, connecting hospitals and community-based services such as GPs, and state health services and hospitals. For example, providing remote monitoring of a patient’s blood pressure, temperature, blood glucose, oxygen saturation, and other clinical indicators with alerts provided to clinicians where patients show signs of deterioration and were appropriate, providing video conferencing between patients and care teams.”

Telstra Health also manages and operates population systems such as the National Cancer Screening Register, which Professor Foley said would contribute to the Australian government’s target of eliminating cervical cancer in Australia by 2034.

She said Telstra Health was strategically well positioned to grow globally in the international market.

There are still significant segments of the market that are not digitised or are under digitised, and Telstra Health was seeing accelerated demand, especially from the COVID pandemic, for interoperable capability in hospitals, pharmacy, across general practice, in aged care and other sectors.

The company has an ambitious target of becoming a $500m+ revenue business by the 2025 financial year. The company produced positive results for the first time in May 2020.

“This trajectory is based on current performance of over $250 million in revenue on a full year basis, including our two recent acquisitions, and with a [compound annual growth rate] to date in the high teens, and recurring revenue of more than 80 per cent.

“This recurring revenue base is significant. Most of our customers in the sector are long term customers with whom we have established and will continue to establish long term relationships.”