Will Meaningful Use Affect M&A In The EMR Space?

As some of you may recall, Allscripts is said to be floating the possibility of selling out to a venture capital firm. This follows several months of tumult at the board level, including some who might have been helpful in keeping its merger with Eclypsis moving forward.

I’ve been thinking about this deal for a while, wondering whether it would come to fruition and if so, what would make it happen. And I’ve realized an Allscripts deal, or other EMR company sale, might give us a window into just how valuable Meaningful Use criteria have proven to be. Let me explain.

If I was a EMR vendor looking for an acquisition or merger, I’d certainly look at the usual metrics, including the customer list, code base my target had in house, maturity of the product line, the extent to which in-house programming talent could support the roadmap and so on. (Naturally, I’d go over its books in depth too.)

But that’s not all. These days we have some new perspectives from which to evaluate the success of EMR vendors, a set of standards which are fairly unique in the software business.  Two important examples: We can look at how successfully a vendor’s customers have been able to meet Meaningful Use goals to date, and how far along the HIMSS EMR Adoption Model customers are as well.

While both are interesting, Meaningful Use is more important, as it’s such a politically fraught, complicated and rapidly evolving set of standards. In short, I’d argue that if a vendor’s customers are doing well with MU, then it’s likely the vendor is doing something right.

Now, you can’t draw a straight line between the quality of a vendor’s product and how well its customers  have done in qualifying  for Meaningful Use. Implementation is ultimately the hospital or doctor’s responsibility, even if the provider pays for EMR vendor consulting to get things going. And there’s lots of ways things can go wrong that have little or nothing to do with the product.

Still, I predict that Meaningful Use success is going to become a more important metric in EMR vendor M&A as time goes by. After all, the more bragging rights a company has regarding Meaningful Use success, the more they can improve the acquiring vendor’s profile. That’s gotta matter.