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Andrew Ferrier appointed as new chair of Orion Health

Tuesday 16th September 2014

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Former Fonterra boss Andrew Ferrier has been appointed as the new chairman of Orion Health, the cloud-based patient management software company tipped for a share market listing.

Following today's annual meeting, Ferrier replaces Andrew Clements who is stepping down as both chairman and a director. Lester Levy, chairman of the Auckland and Waitemata District Health boards, has also been appointed as an independent director.

Ferrier has been a director of Orion for the past two years. His first involvement was as an investor. After he left Fonterra, he and his wife set up an investment company, Canz Capital, taking 1 percent of Orion. Ferrier said he has since lifted the stake to 1.1 percent because he has faith in the company's growth prospects.

He is also chairman of New Zealand Trade & Enterprise, sits on the council of the University of Auckland, and is on of the board of global agribusiness Bunge Ltd in New York, and has other directorships in private and not-for-profit enterprises in New Zealand, Canada and the US.

Ferrier refused to comment on market talk of a potential listing of the company, which is majority-owned by founder Ian McCrae.

"As a board we will have to consider whether to do it and if it's the right time," Ferrier said. Until now the company has funded its growth out of revenues and a small amount of capital raising from private investors and the question will be how big a loss it is willing to run the company at, how fast it wants to expand, and whether using public cash is a better option. 

McCrae said the company, which has been growing revenue at an average 26 percent over the past 10 years, is poised to take advantage of massive generational change likely in the access and delivery of electronic health services. 

"Other sectors have already been changed by the web. If people want to visit a bank they go online, if they want a taxi they use Uber, if they want to go to a restaurant they use TripAdvisor. But that has not yet happened in health and it is inevitable it will happen because it is what society expects," he said.

Ferrier said his role was to use his big company experience to help McCrae run a large global organisation which requires different skills than running smaller companies. Orion now has 1,100 staff and is increasing staff numbers at the same rate as its revenue growth. It is spread across 28 offices worldwide, having just opened offices in Istanbul, the Philippines and Northern Ireland.

The new chairman said his first priority in an organisation the size of Orion was to ensure everyone understood the company strategy and that it was hiring people with the right cultural fit to help it grow rapidly. While happy with the current composition of the board, Ferrier said the directors were all New Zealand-based and he may look to add directors in other countries.

One of the new areas of its business is Healthier Populations, which targets regional health boards and private healthcare networks to manage patients' healthcare in a more integrated way, using Orion's software as a service business model. The health management market is said to be currently worth $12 billion globally and likely to grow to $40 billion by 2018.

Orion Health has signed a deal  for its technology with Cal Index - the California Health Information Exchange, which is creating a next generation health information exchange in the state that will allow patient records to be shared digitally among all the health providers caring for them. Two major rival California insurers Blue Shield and Wellpoint's Anthem Blue Cross are spending US$80 million to help accelerate health information exchange in the country's most populous state.  It is due to be operational by the end of this year. 

Orion said the scale of that deal has sparked interest from other healthcare providers in the US and further afield. 


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