Telstra buys MedicalDirector, plugging gap in its digital health range

Australian telecommunications giant Telstra has reached a deal to acquire MedicalDirector, a company specialising in software used by GPs to manage their practices.

Telstra Health – the Australian group's digital health arm – is paying A$350 million ($257 million) to buy MedicalDirector from investment company Affinity Equity Partners, which bought the company from former owner Healius for A$155 million in 2016.

Telstra Health managing director Mary Foley said that the acquisition adds to the company's current range of digital health tools used by hospitals, pharmacies and the aged care sector.

The bolt-on will allow the company to provide a continuum of digital services to healthcare services as their patients "move back and forth across home, clinics, hospitals, aged care and pharmacies," she added.

Moreover, by plugging the GP gap, Telstra can now "better support patients and providers by removing siloes between sectors to improve the delivery of quality health care," said Foley.

MedicalDirector provides software for electronic health records, patient and practice management, billing, scheduling, care coordination, medicines information and clinical content for around 23,000 medical practitioners in Australia, helping to deliver more than 80 million consultations a year.

The company has also been expanding its business internationally, primarily in the UK where it was awarded an NHS contract to provide its cloud software to GPs in 2019.

The company was one of almost 70 suppliers who took a share of £484 million ($670 million) in UK government investment used to upgrade GP practice software and clinical health record technology through the GP IT Futures programme.

The deal is the latest in a series of acquisitions for Telstra Health, which has been steadily building its digital health portfolio over the last five years. Just last month, it took a stake in PowerHealth, which provides billing, budgeting, costing and revenue software for hospitals.

The company has also bough UK health analytics firm Dr Foster and Anywhere Healthcare, an Australian telemedicine company, in the last few years. It was even involved in the bidding for MedicalDirector five years ago before losing out to Affinity.

Foley said she expected the transaction to be completed very shortly "and certainly within this financial quarter."