When President Barrack Obama and Congress allocated billions of dollars under the HITECH Act in February 2009, the influx of funds generated a slew of mergers and acquisitions within the vast healthcare information technology (HIT) industry.
For example, Misys International Banking Systems purchased Allscripts; Microsoft purchased privately-held Sentillion; Dell announced its Affiliated Physician EMR Solution after its acquisition of integrator Perot Systems, and Verizon launched its Security Management Program-Health Care (SMP-H). The advent of the new year marked yet another deal, when AdvancedMD Software acquired PracticeOne, a Certification Commission for Health Information Technology-certified electronic healthcare records software developer.
But the rush to acquire HIT assets could lead to huge debt burdens and turbulent stock prices at a time when many rules and specifications are, as yet, not final. The Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) unveiled "interim final rules" for the "meaningful use" of an electronic healthcare record (EHR) on Dec. 30, 2009. CMS and ONC have yet to unveil the process by which vendors can certify meaningful use of EHR software. In addition, EHR technology must navigate a state- and national healthcare information exchange (HIE), which will create their own digital authentication challenges. Medical providers must be credentialed and included in electronic directories.
Could this be a winner take all endgame? In the 1990s, advances in technology created a wave of banking mergers and acquisitions leaving only a handful of financial firms. Healthcare technology could undergo a similar convergence. Misys International Banking Systems' acquisition of Allscripts may be one winning strategy. Allscripts (MDRX) stock traded in 2004 at $2.83 and 1/31/10 it's at $20.68. After all, international banking systems understand digital authentication and electronic information exchanges which may be the reason Allscripts-Misys Healthcare Solutions is, today, the sole EHR vendor confident enough to guarantee its solutions will met all federal certification requirements.