Funding provided to promote NZ Health IT Cluster

Funding has been made available to assist the New Zealand Health IT cluster build up the capability of its member companies in an effort to significantly accelerate the growth of the sector, Economic Development Minister, Jim Anderton, said today.

The funding of $500,000 from the Ministry of Economic Development's Sector Initiatives Fund is over a two-year period, paid out as agreed milestones are met. The health IT business sector is one of New Zealand's best performing high-tech export sectors, with export revenues in excess of $65 million in 2003 out of total revenues in 2003 of about $100 million.

"It is expected that the cluster, which aims to be fully self-supporting within two years, will make a substantial contribution to the commercialisation of New Zealand-developed intellectual property in this area of the IT industry," Jim Anderton said.

A growing area of need for hospitals and health care providers around the world is seamless access to patient records. Hospitals can have upwards of 200 information systems operating, many of which don't 'talk' to each other.

"New Zealand health IT companies have demonstrated they have world-class IT applications to address this problem and can also add value through products that support clinicians' decision-making and provide education for patients," the Progressive leader said.

The growth in the capability of the cluster members will also be important to support the Ministry of Health's goal of having an electronic health record for all New Zealanders, Jim Anderton said.

"If this can be achieved, New Zealand will become a global pioneer in an extremely important area driving efficiencies and costs reductions in the health sector," Jim Anderton said.

The funding will help the cluster move from its current position as primarily a facilitator for its members to a commercially-driven business with a full time chief executive officer and programme manager.

The Health IT cluster estimates that around $12 million of its members' projected $190 million of revenue in 2004 can be attributed to the positive effects of the collaboration occurring within the sector through participation in the industry cluster.

It is estimated that the Health IT Cluster members' combined revenues were on target to rise to around $550 million by 2008 but that the marketing, research and other forms of collaboration being fostered within the cluster will instead propel combined members' revenues to over $910 million by 2008, of which at least $750 million is expected to come from export sales.

Similarly, employment within the health IT sector is projected to rise from around 1,000 in 2003 to nearly 3,000 by 2008.

Background Notes:

The New Zealand Health IT Cluster

The New Zealand Health IT Cluster was established by the Health IT business sector with the objective of building a collaborative Health IT industry with health care providers, software developers, university departments and government working cohesively to:

(a) Improve patient care through the use of information technology; (b) Improve the cost effectiveness of the provision of healthcare in New Zealand, and; (c) Accelerate the growth of the health IT industry in New Zealand.

The cluster is made up of 39 Health IT companies and other sector participants whose business focus is on development and sale of software, computer and education services to the health sector. The cluster members comprise the significant majority of the IT companies active in the healthcare sector.

The cluster was formed in 2002.

For more details of the membership and objectives of The New Zealand Health IT Cluster Inc. visit: www.healthit.org.nz

Recent successes from New Zealand Health IT Cluster company members:

Software of Excellence: Software of Excellence has been included in all five consortia contracts granted by Britain's National Health Service and has a stand-alone contract for the provision of dental Health IT services to the UK military. They recently won an NZTE export award. www.soeidental.com

Orion Systems International: Orion Systems has been successful in projects in Canada and at the St John Hopkins Hospital in the United States in association with Oracle and Hewlett Packard. It has also just been selected as part of a three firm consortium to develop and trial an electronic health record system for New South Wales in Australia along with sister company Healthlink. www.orionhealth.com

Sector Initiatives Fund

The purpose of the SIF is to provide support for industry projects that are consistent with economic, social and environmental objectives but cannot be funded through other government assistance programmes, and that priority for funding will be given to proposals that:

. Are identified as key contributors to the implementation of sector strategies being developed in partnership with industry, through New Zealand Trade and Enterprise and the Ministry of Economic Development; . Are supported by key stakeholders such as industry and local government; and . Have the potential for wider cross-industry application of benefits, for example infrastructure.

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