Allscripts to acquire McKesson's hospital IT business for $185M
- Allscripts announced on Thursday it will acquire McKesson's hospital and health system IT business, Enterprise Information Solutions (EIS).
- The EIS portfolio includes Paragon (EHR), STAR and HealthQuest (revenue cycle), Lab Analytics and Blood Bank and OneContent (content management).
- Allscripts is purchasing the portfolio for $185 million.
The move further focuses the two companies. On McKesson's side, the deal helps the company refine its business on supply chain management. The portfolio acquisition allows Allscripts to strengthen its position as a legacy EHR vendor in an increasingly competitive market.
“Adding these assets to Allscripts existing portfolio enables us to better serve our clients, increase our scale and further drive our investment in innovation,” said Allscripts Chief Executive Officer Paul Black.
Allscripts will invest in and continue to offer Paragon as the integrated EHR and revenue cycle management solution for the small hospital market segment, while Allscripts Sunrise will continue as the primary platform for larger institutions, typically with highly complex service line needs.
After the proposed transaction closes, the combination of Paragon and Sunrise hospitals will double Allscripts current EHR hospital client count in the U.S., according to the company.
Legacy health IT companies have been seeing a good second quarter for 2017. Athenahealth reported 15% revenue growth over the 2016 period, with a net income was $9.9 million (up versus a net income loss of $1.9 million a year ago). Cerner booked an all-time high at $1.64 billion while eClinicalWorks added over 3,000 providers to its networks.
Some of the vendors are seeing growth as providers move more toward cloud solutions and a networked ecosystem. As such, vendors are reacting to the market and rethinking their solutions. For example, this year Epic announced it would be moving into the small hospital market while athenahealth is trying to sell to more hospitals.
The Allscripts announcement underscores how competitive the space has gotten and that the company wants to double-down in the EHR Wars.
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