UPDATE: Orion Health shares gain on US deal, CEO eyes return to profit
(Adds details of job losses in the US, CEO comments, updates shares)
By Edwin Mitson
March 30 (BusinessDesk) - Orion Health Group shares rose more than 4 percent after the Auckland-based medical software provider said it has signed a deal with a major healthcare insurer in the United States which will see its Amadeus platform rolled out for use with its 3 million strong membership base.
The agreement will allow the insurers' partners access patient information from across all the departments at which they've been examined instantly. The shares rose 13 cents to $3.25. Despite that gain, Orion's shares have fallen 33 percent from a year ago.
Orion Health has also confirmed it has cut staff numbers in the US, with 36 posts or just under 10 percent of its American workforce. Chief executive Ian McCrae said the redundancies reflected the company's move to make its software more efficient.
"Software that might have taken four months to install, we can now do that in four hours," he said. "We've engineered a lot of cost out of the system, so we need fewer consultants. It’s one of the toughest things I have to do. They are good people, they are nice people.”
McCrae described the timing of the announcements as unfortunate, but stock market rules meant the deal with the health insurer had to be announced immediately.
Orion will now set out a timetable for returning the company to profitability in May. "What we’re saying and consistently saying, is we’re driving this company to make a profit", McCrae added, "We’ve always run a profitable company, and we’ve had a bit of time where we’ve invested in R&D, and now we’re focused on profit".
The company currently manages more than 90 million patient records worldwide.
In February, Orion announced an agreement with the US IT health company, Cognizant Group, allowing Cognizant to use the Amadeus platform.