Orion Health cuts 177 jobs and posts $40m loss

New Zealand clinical integration and population health specialist Orion Health has posted losses of  NZD $40m (£20.9m) and revealed 177 jobs have been cut internationally.

Orion Health’s chairman also confirmed the company is continuing to work on, but has not yet been able to complete, a “strategic review”, likely to include a partial sale of the business.

The most recent job losses have included staff in the UK, and come at the same time as new government investment is being committed to regional interoperability initiatives.

The losses were reported in Orion’s annual accounts to the end of March, which showed losses widening, up from NZD $34m (£17.8m) the previous year.

The job losses, which occurred up to the end of March, are the latest in a series of staff reductions by the firm, which chief executive Ian McCrae has indicated will continue this year.

According to a report by Stuff NZ, Orion is working on a strategic review and restructure that could include a partial sale.

Orion Health’s chairman Andrew Ferrier was quoted as saying Orion Health was making progress with a “strategic review”.

“Work on due diligence and structure is largely complete. However, until any final agreement is reached we can’t give any certainty on the nature or terms of any transaction,” he said.

Orion’s core Rhapsody integration business is thought to be profitable, unlike the hospital and population health divisions.

Orion declined to confirm questions from Digital Health News in April on UK job losses, prior to the publication of the latest figures.

However, a spokesperson suggested that the restructuring of the businesses would see “increased investment in some areas of the business and redeployment or reduction of resources in others.”

They added that the shift in resourcing had impacted some of Orion’s offices around the world, including the UK, where “some difficult decisions needed to be made.”

Orion’s Rhapsody business provides the technology behind a number of high profile UK shared records initiatives, including Bristol Connected Care and Dorset Care Record.

Along with Hampshire Health Record, Dorset Care Record was last week confirmed as part of the Wessex Local Health and Care Record Exemplar project, set to receive £7.5m of government investment to become a national reference site.

Orion Health also has key contracts with NHS sites, including Glasgow Health Board, and has a tender process underway for an integrated digital care record in Warrington.

Orion has been an early advocate of interoperability standards and technologies including FHIR and a founding member of the InterOpen forum.

The New Zealand firm has been the subject of intense scrutiny by investors over the past six months, who have grown alarmed about its financial position and future prospects.

In particular, these relate to its position in the key US health IT market, where the end of the HITECH federal investment programme in health IT, including regional interoperability projects, has left Orion exposed.

Orion’s share price is now a tenth of its value following its 2014 flotation.

Of particular concern to investors will be the explicit cautionary note in the accounts from Orion’s auditors, who warn: “We draw attention to the disclosures made in the financial statements concerning the Group’s ability to continue as a going concern…”

Orion Health says that with the cost-saving measures and restructure it will break even and be cash positive by the end of the year.