30 January 2020

Top 10 potential platform plays: No 6 – PenCS


PenCS was founded in 1993, about the same time the first  of the major electronic patient manage systems (PMS) were starting life. At some point in the late 90s, when Medical Director was the dominant national provider  of PMS to GPs, PenCS (then Pen Computer Systems) and a few other smart data service groups developed software which descended virus like on the MD PMS, and with the permission  of the GP, but not necessarily MD, extracted all the non patient identified data from the system for analysis.

MD had its own internal version of this software and from it built a not insignificant business in providing data analysis, mainly at the time to Pharma companies and  then to some government groups. One competing product, Asterx to PenCS, built by the developers who eventually built the first cloud PMS, Medirecords, used to pay rolling panels of GPs (up to 400 at a time)  for longitudinal data so they could look at real time trends in prescribing. Not surprisingly, the actual trends in this data direct from a PMS,  didn’t have much to do with the manually filled out diaries being kept by another panel of GPs who were on the payroll of a big global health data group. Some pharma companies even developed their own version of this extraction software tool to analyse trends in prescribing against what their sales force were telling them.

Sometimes groups like Asterx paid their doctor panels or practices in processed data which analysed the efficiency of a practice. Asterx even developed a cloud based dashboard a practice could use to do some high level analysis for things like identifying patients whose profile indicated co morbidities that weren’t being looked for, for unusual patterns of doctor prescribing in the practice, for other MBS optimisation protocols which could help the practice in accreditation, and, for conducting clinical audits.

While groups like Asterx struggled with data panels which were statistically at times too small for their clients to maintain a long term interest, PenCS struck early  on the idea of approaching PHNs with the opportunity that such software provided these groups to better manage their patient populations and practices. Their clinical audit tool CAT4 was the key product then and still forms the basis of most data transactions these days, the latest being a version that helps manage the new ePIP requirements around data.

Over the years PenCS quietly grew its PHN clientele until the point where today it services 28 of the country’s 31 PHNs. Most of the other providers disappeared from market or pivoted to other interesting data based projects – Asterx became cloud based PMS Medirecords. PENCs is still fairly small in the scheme of things compared to potential platform platform plays like Best Practice and Medical Director, or indeed, a global player like AllScript (spoiler alert for No 5). But in some respects its potential reach to the key GP demographic is far deeper than any other vendor.

In a sense, PenCS has the biggest digital network footprint with doctors in the country. Bigger in fact than the reach of either MD or Best Practice which collectively reach about 87% of practices in the country. PenCS extracts data from some 5600 practices, which covers the work of about 45,000 medical practitioners and non identified data on 21 million patients.  It also has an internet based decision support app ecosystem installed on the desktops of about XXXXX GPs.

PenCS has a network which theoretically has direct access to more GPs in the country than any of the PMS systems, by a significant margin.

So why is this group No 6 on list and the PMS systems higher (so far we’ve only covered MD but they got to No 4)? The reason is mainly that  the PMS systems are a key part of the everyday work cycle of most GPs – they are indispensable day to day, whereas while the PenCS systems can access a doctors computer, doctors don’t have day to day interaction with PenCS on anything of the frequency they do with the PMS systems. About XXXXX interact with the PenCS topbar decision support app facility per day.

It’s likely all  the  PMSs will end up one day networked via cloud versions, and through this become the logical gatekeepers of the most important health transactions, especially with GPs and specialists.

But that is not to say PenCS might not be there at some point if they remain true to their vision, do the odd acquisition, or are acquired by group with the capital to glue the right pieces together in a major network play.

PenCS’s vision is “to build a healthy Australia by delivering a leading patient-centred eco system that connects all aspects of the patient journey.” That’s a  a big elephant to chew on. But the company is getting behind the vision with some of its product development and strategies.It has  a desktop app eco system which serves quite a bit of more engaged functionality than its data service, and a series of sophisticated analytics tools for use by PHNs, and likely, future applications directly at the practice level.

The other thing  going for PenCS is its related companies.  It is sitting in an interesting family of healthcare based companies that could at some time provide access to emerging IP and capital. That family include Caremonitor, by the sounds of things a serious emerging competitor to Sonic’s chronic care platform CDMnet, Ocean Health Systems, an emerging UK vendor of linked EHR systems that link primary care providers to patients and other providers, and Macquarie Health (MH), a small but successful local private hospital network.

While MH probably generates most of the cash for this group now, it feels feasible that if the became right, an asset like PenCS can access the right capital to undertake more expedited development, make acquisitions and develop IP locally.

If PenCS isn’t going to be ‘the’ platform it seems entirely feasible that it will very likely end up part of one, whether owned or connected. The sort of data it is extracting and helping PHNs and other groups analyse is going to be critical in a world moving to outcomes based care.

Note: Although PenCS extracts non identified data, and provides software tools for analysis of this data, the group does not store any of the data themselves or have access to the data.