Free EMR Newsletter Want to receive the latest news on EMR, Meaningful Use, ARRA and Healthcare IT sent straight to your email? Join thousands of healthcare pros who subscribe to EMR and EHR for FREE!

Allscripts May Sell Out To Private Equity Buyer

Posted on October 5, 2012 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of FierceHealthcare.com and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

Update: You might be interested to read this post on Allscripts Plans to Discontinue MyWay.

Having just gone through the hell of a board gone wild, perhaps Allscripts’ leadership doubts it has the ability to govern.  Or maybe it’s just bracing for the fresh hells that EMR companies will face when the industry’s Big Consolidation begins (something we all know will happen, though not when). Either way, it seems that Allscripts is ready for a change in ownership.

Earlier this week, Bloomberg Businessweek reported that the company has retained Citigroup to explore selling out to a private equity buyer. According to published reports, Allscripts is considering a leveraged buyout, which would take it private but leave it holding a ton of debt. It sure must be eager to avoid scrutiny by curmudgeons on Wall Street!

At least one research type has already given such a move the thumbs up. According to Bloomberg Businessweek,  David Windley, an analyst with Jefferies & Co., the move makes sense despite the inherently high costs.  Allscripts “continues to climb a steep product integration hill that would be more comfortable out of the public eye,” the site quotes Windley as telling his clients.

Investors seem pleased with the  prospect of an Allscripts sale too. Shares of the company (MDRX) rose 14 percent when the news that Allscripts had tapped Citigroup hit the press last week.  Clearly, they don’t have complete confidence that the stock is headed for success as the company is constituted today.

There’s no doubt that Allscripts is on a challenging path in creating new, unified product offerings for a feverishly competitive market. The product integration effort Windley is referring to, and it’s a massive one, is the integration of Allscripts products with those of rival Eclipsys Corp., which it acquired in 2010.

Whether integration has been proceeding smoothly or not, it can’t have been a big confidence builder six months ago when Allscripts fired Chairman Phil Pead, who’d come on board when Eclipsys was purchased, and three board members resigned.

Plus, the rumors are swirling about Allscripts planning to sunset MyWay and move users to their Allscripts Professional product. More details on that change as it develops.

Will Hospital Ownership of Small Practices Kill Ambulatory EHR Vendors?

Posted on August 30, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

There are a lot of interesting trends in the EHR and healthcare industry right now. One trend that everyone is seeing and talking about is the trend of hospitals buying up ambulatory practices. There are a number of reasons that we see this happening. Not the least of which is the move to Accountable Care Organizations. While I still think that this trend is cyclical, there’s some possibility that the small ambulatory practice might be in long term danger.

If the small ambulatory practice is in danger, what does that mean for EHR software vendors?

One of the first projects that hospital acquired practices experience is the move to the hospital owned EHR. In fact, I know of many cases where the move to the hospital EHR was part of the contract. I’m not sure all of the reasoning, but many hospital systems are moving their recently acquired practices onto EHR before they move their existing practices.

I have yet to see a hospital system use anything but a large EHR vendor. In many ways it makes sense. The hospital system is buying practices across dozens of specialties. Many of the smaller EHR vendors focus on a few different specialties and so they just aren’t an option for a big multi specialty environment.

Then, there’s the issues of scale and control. Can a smaller EHR vendor support such a large implementation? Can a smaller EHR vendor provide the hospital system the control they want of their EHR environment? The first one is an interesting challenge since I’ve seen some hospital owned ambulatory environments having scaling issues with some of the largest EHR vendors. The problem as I saw it from the outside was that the hospital system couldn’t get the attention of the right people at the large EHR vendor. This wouldn’t have been an issue at a small EHR vendor.

With that said, I do think that small EHR vendors will have a huge challenge getting into the large hospital owned clinical practices. Will enough small practices remain for ambulatory EHR vendors to survive? I enough will survive, but in the short term there could be some shrinking of that market.