Allscripts to buy Practice Fusion for $100M
- Allscripts has inked a definitive agreement to acquire cloud-based EHR vendor Practice Fusion for $100 million in cash.
- The deal, subject to regulatory approval, will give Allscripts a larger presence in outpatient settings.
- This is Allscripts’ second major acquisition in six months. In August, the Chicago-based firm bought McKesson’s hospital and health system IT business for $185 million.
Practice Fusion once found itself on the precipice of taking the company public and at one point was valued at $1.2 billion. However, the sugar high of the Meaningful Use spending is over and, absent government financial incentives, market forces will spur more M&A activity in the health IT space as players seek dominance in a shifting provider and consumer expectations for a clinical experience.
The move solidifies Allscripts’ footprint across the care delivery spectrum. San Francisco-based Practice Fusion currently supports about 30,000 ambulatory practices and five million patient visits a month. Allscripts is also banking on Practice Fusion’s access to clinical data to enable innovations in areas such as analytics, clinical trials and the life sciences.
The deal is among a wave of mergers as companies reposition themselves. In the third quarter of 2017, there were more than 200 deals — the 12th straight quarter to hit that mark, according to PricewaterhouseCoopers. While within a different sector of the industry, pharmacy retailer CVS Health announced plans to buy insurance giant Aetna for $69 billion, highlighting how legacy companies are looking toward the future.
Several factors are fueling this trend, including growing consumer demand for convenience and care consolidation, allowing patients to address multiple needs in a single trip. In health IT, a major driver is lack of interoperability, which is expected to spur mergers and acquisitions as companies vie for greater innovation while increasing integration.
For Allscripts, the motive is offering an ever-broader range of EHR functionalities and capabilities in products that augment the traditional ways of practicing healthcare. Epic CEO Judy Faulkner last fall stated she wanted to shift focus from an EHR to a comprehensive health record (CHR), planting a flag for a sea change among the major health IT vendors for the coming years.
The deal is expected to close in the first quarter of 2018.
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