Officials of the brand-new AllscriptsMisys Healthcare Solutions, Inc. are out to prove that bigger is better.
Company officials formally announced the merger on Monday of Chicago-based Allscripts with Misys Healthcare, the Raleigh, N.C.-based healthcare arm of British banking giant Misys, following votes of approval last week by shareholders at both organizations. The new company, based in Chicago, is touted as one of the largest providers of electronic health record and practice management services in the country, with access to roughly 700 hospitals, 7,000 post-acute and homecare agencies and 150,000 physicians.
The merger, first announced in March, drew concern from analysts who thought the two companies could be taking on too much. Those concerns deepened last month, when the ongoing global banking crisis led to the collapse of Lehman Brothers and forced Misys to seek a new financing deal for its share of the merger. That issue was resolved when Misys secured new funding from a lending group composed of HSBC, the Bank of Ireland and the Royal Bank of Scotland.
Both Glen Tullman, Allscripts' CEO, and Mike Lawrie, the new company's executive chairman and Misys' chief executive, say they weren't worried.
"The market believes in the underlying fundamentals of this transaction," said Tullman. "Healthcare is not going to go away. The problems in healthcare have to be solved."
"The healthcare industry is one of the last on the planet to use (information technology)," added Lawrie. "Providers need to look for ways to improve their productivity, and this is one of them. This may play right into the economic environment."
"We now have a platform to grow," he added.
The deal is designed to combine Allscripts' EHR products and Misys' PM solutions and further the concept of interoperability in the healthcare marketplace. Tullman pointed out that more than 50 healthcare providers are already using Allscripts and Misys products, and that many others would now find a new range of products made available to them.
"We're going to make it easy for them to integrate and connect to these services," said Lawrie.
Both man also pointed out that 90,000 Misys clients - roughly 80 percent of the healthcare company's client base - don't have EHRs. "Our objective is to offer safe and easy choices to the existing Misys base and to the market in general," Tullman said in a press release sent out this morning. "Practices that are pleased with their current practice management systems can simply add the Allscripts Electronic Health Record that fits and feels best. Others may choose to upgrade to a new set of products."
The merge isn't coming without cutbacks. While Tullman pointed out that the new company has to fill roughly 100 new positions, it is reducing some duplicative jobs. He said the company wants to offer a wide range of products, but can't be offering more than one of the same solution.
"You are going to see some consolidation," he said. Similarly, he noted that there were more than 350 EHR vendors on the market roughly four years ago, when the Certification Commission for Healthcare Information Technology (CCHIT) was launched. That number is now down to about 200, he said, and should drop even more as time goes by.
The key to the company's survival now, both Lawrie and Tullman said, is innovation. Both say there will be several announcements over the coming months of new contract and products. Among them is a self-service kiosk, integrated with the company's EHR and PM suites, that will be rolled out shortly at the Springfield Clinic in Springfield, Ill.
"Physicians want to make an investment in a company that grows and innovates," said Lawrie.
"We're building a growth company," added Tullman.
Is this a good deal for all concerned? Send your comments to Managing Editor Eric Wicklund at eric.wicklund@medtechpublishing.com.