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AthenaHealth (NASDAQ: ATHN) Acquires Epocrates (Nasdaq: EPOC)

Posted on January 7, 2013 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.

It was just announced that AthenaHealth plans to acquire Epocrates. This is a big move by AthenaHealth and a really smart one. Here are the details of the agreement for AthenaHealth to acquire Epocrates from the press release:

The board of directors of each of athenahealth and Epocrates has agreed to a price of $11.75 per share, in cash, for an aggregate purchase price of approximately $293 million. The purchase price represents a 22 percent premium over the closing price per share of Epocrates on NASDAQ on Friday, January 4, 2013. This is an all-cash offer for all outstanding shares of Epocrates’ common stock, and athenahealth intends to finance this acquisition using available cash and funds available from its existing credit facility. The closing of the transaction is subject to the approval of Epocrates shareholders and other customary closing conditions and is currently expected to occur early in the second quarter of 2013. Epocrates shareholders representing approximately 17.5% of the outstanding common stock have agreed to vote their shares in favor of the transaction.

Of course, there are still a number of regulatory hurdles that must be overcome to make the transaction final, but this looks like it’s going to happen. Considering Epocrates stock price was so low after their initial IPO, this isn’t really a surprise. Plus, once Epocrates shut down their EHR business it presented a great opportunity for another EHR vendor to come in and capitalize on Epocrates relationships with the doctors. In fact, Jonathan Bush describes the value of the Epocrates brand really well:

“I have been an admirer of Epocrates since it first emerged and have watched the company grow consistently, one app download at a time, as it has cemented itself into the consciousness of America’s physicians. No other company has been able to replicate the brand awareness, familiarity, and trust that Epocrates has across the clinical mobile user base. We are confident that we can provide Epocrates with the stewardship and resources it needs to grow and develop within health care, and that Epocrates’ capabilities are going to mesh exceptionally well with athenahealth’s cloud-based physician and patient services.”

I’ll be interested to see how AthenaHealth chooses to integrate the Epocrates knowledge base within its EHR and how they use the Epocrates relationship to sale their EHR to doctors. Will the Jonathan Bush cloud mantra take hold in the Epocrates culture? I’ll be interested to watch that transition.

Apps Will Drive Healthcare Cloud Expansion

Posted on 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.

Right now, only a small percentage of the healthcare industry is making use of cloud technology, largely due to security concerns.  But as the number of applications available in the cloud continue to expand, and vendors do more to meet  healthcare’s specific security needs, providers are getting more comfortable with the idea of using the cloud.

While I mined the following information from a cloud vendor’s blog, I still think it’s pretty credible, so I wanted to share it with you readers and see what you think.

According to a report from cloud vendor CenterBeam, drawing on data from research firm MarketsandMarkets, only 4 percent of the healthcare community used cloud technology in 2011.  However, MarketsandMarkets projects that the cloud use in healthcare would hit $5.4 billion by 2017, the story says.

I might have dismissed that as hyberbole, as the cloud seems to be more about talk than action so far, but then CenterBeam had me hooked.

Apparently, MarketsandMarkets has found that there’s a growing list of applications available on the cloud which weren’t there previously. We’re talking not only about EMRs, but also order entry and software for imaging and pharmacy uses, as well as non-clinical applications for billing, cycle management and claims management. It’s a big step forward.

Will all of this explode in 2013?  I doubt it, given how busy providers are with the EMR applications they’ve got, ICD-10, Meaningful Use and the usual string of IT operational issues to boot.

That being said, when it comes down to it, applications are what drive a new technology, not abstract capabilities which merely sound good.  After all, these days, who’d care about the iPhone without apps? And along those lines, why would providers risk mingling their data with others’ on the cloud unless they saw a real financial and practical upside? New healthcare apps offer that upside.

So with new, hopefully mature health IT applications appearing on the cloud, we may see that expansion that everyone’s been talking about for years now.  It should be quite interesting to watch.