infoTECH Feature

June 09, 2010

Healthcare IT Providers Allscripts, Eclipsys to Merge as Electronic Health Records Projected to Grow

Allscripts and Eclipsys (News - Alert) are planning to merge into a single healthcare technology company that is poised to take advantage of the projected growth in patients' electronic health records.
With a transaction valued at approximately $1.3 billion, the merger will combine the physician-office and post-acute care solutions from Allscripts with Eclipsys's solutions for hospitals and health systems.
The combined company's client base will include over 180,000 U.S. physicians, 1,500 hospitals, and nearly 10,000 nursing homes, hospices, home care and other post-acute organizations.
The combined company will be able to deliver a single patient health record - with information from physicians, hospitals and nursing homes - at a time when there is expected rapid growth in electronic health records, EHRs.
'We are at the beginning of what we believe will be the single fastest transformation of any industry in U.S. history, and the combination of the Allscripts electronic health record portfolio in the physician office and leadership in the post-acute care market, with Eclipsys's market-leading hospital enterprise solution creates the one company uniquely positioned to execute on this significant opportunity,' said Greg Tullman, who is currently CEO of Allscripts and will be the CEO of the combined company.
The merger positions the combined company to help clients access the approximately $30 billion in new federal funding of EHRs.
Driven in large part by the federal incentives, which begin in 2011, EHR adoption by physicians is projected to grow from 12 percent to 90 percent by 2019, according to the Congressional Budget Office.
The CBO report also projects hospital adoption of acute-care EHRs will increase from 11 percent to 70 percent during the same time period.
Many hospitals and health care organizations are providing EHRs to their affiliated physicians. For example, North Shore Long Island Jewish Health System recently announced it would subsidize up to 85 percent of the cost of implementing the Allscripts Electronic Health Record for over 7,000 affiliated physicians in New York City and Long Island. North Shore-LIJ's hospitals currently utilize the Eclipsys Sunrise Enterprise suite of solutions as well as the Allscripts Emergency Department and Care Management solutions.
The Eclipsys solution for hospitals and the Allscripts solution for physician practices currently use common platforms, including Microsoft (News - Alert).NET.
The merger was approved by the boards of Allscripts and Eclipsys, and requires approvals from stockholders and regulators.
The companies expect the merger to close in approximately four to six months. The combined company will have more than 5,500 employees.
In a related matter, the federal plan to help buy equipment for doctors and hospitals to computerize patients' medical records is reaching a snag. The New York Times is reporting that proposed eligibility criteria are so strict that "hardly any doctors or hospitals can meet them, not even the most technologically advanced providers."

Ed Silverstein is a contributing editor for TMCnet's InfoTech Spotlight. To read more of his articles, please visit his columnist page.

Edited by Alice Straight

Subscribe to InfoTECH Spotlight eNews

InfoTECH Spotlight eNews delivers the latest news impacting technology in the IT industry each week. Sign up to receive FREE breaking news today!
FREE eNewsletter

infoTECH Whitepapers