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Investors Competing For Health IT Opportunities

Posted on June 28, 2018 I Written By

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

A new study has concluded that investors are hungry for health IT investment opportunities, in some cases battling competitors for particularly attractive companies. The report concluded that investment firms see health IT as a lower-risk way to get a cut of the healthcare market than other possible targets.

The analysis by Bain & Company, which looks at 2017 numbers, said that the number of health IT investment deals completed last year rose to 32 from 23 in 2016.

The value of disclosed deals fell from $15.5 billion in 2016 to $1.9 billion in 2017. This is not a sign of weakness in the sector, however. The 2016 deals volume was pumped up by two megadeals (acquisitions of MultiPlan and Press Ganey), which were valued collectively at $9.9 billion. Meanwhile, in 2017 only one deal exceeded $800 million.

Deal counts and volume aside, there’s no question that investors are still very interested in acquiring or taking a stake in health IT companies, Bain reports. According to its study, there are many good reasons for their excitement.

“Investors find HCIT target attractive not only because HCIT companies play a vital role in promoting technology adoption in healthcare but also because they bear less of the direct reimbursement and regulatory risk that affect other healthcare sectors,” the report says. “With a limited set of scale assets on the market and corporate buyers willing to pay premiums for those that do become available, valuations remain high and competition intense.”

The report notes that most of the health IT buyouts in 2017 involved biopharma investments, particularly among companies using IT solutions and advanced analytics to streamline development a testing of drugs. Such deals include the buyout of Certara, which offers decision support technology for optimizing drug development, and Bracket, which sells technology for managing clinical trials.

However, investors were also interested in EMR and practice management vendors. Given that just a handful of big vendors block of the market for hospital IT, they looked elsewhere.

In particular, investment firms were interested in consolidating some of the many vendors selling ambulatory care EMRs platforms supporting specialties like gastroenterology. For example, investors picked up a $230 million stake in Modernizing Medicine, which offers EMR and practice management systems for specialties such as dermatology and ophthalmology, Bain said.

In the future, investors will gain interest in revenue cycle management software. In addition to investing in or acquiring RCM tools for providers, investors may target RCM software helping patients pay their bills. For example, private equity firm Frontier Capital bought a majority stake in medical card company AccessOne last year.

Bain also predicts that Investors will pay growing attention to clinical decision support platforms, driven in part by legislation requiring doctors to use clinical decision support tools before ordering complex diagnostic imaging of Medicare patients.

In addition, investment firms are keeping their eye on population health management software vendors. It’s not clear yet which companies will dominate the sector, and how these platforms will evolve, so dealmakers are hanging back. Still, within a few years they may well begin to throw money at PHM companies.

One-Fifth Of Physician Practices Might Switch EMRs

Posted on February 26, 2013 I Written By

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

Here’s yet more evidence that this is the year of the “big switch” in EMRs, at least among physicians. A new survey by Black Book Market Research has concluded that about 23 percent of practices with currently implemented EMRs are unhappy enough with their current system to consider switching to a different vendor.

According to a piece in Medical Economics, doctors’ concerns include a lack of interoperability, excessively complicated connectivity and networking and problems with mobile device integration.

The survey, which reached out to 17,000 doctors, found that internal medicine docs had the highest rates of satisfaction (89 percent), followed  by family practice (85 percent), general practice (82 percent) and pediatrics.

The unhappiest specialists were nephrologists (88 percent), followed closely by urologists (85 percent) and ophthalmologists (80 percent).

So if a practice is going to switch vendors, what are they looking for? The Medical Economics piece listed five “must-have” features doctors voted for in the Black Book survey:

* vendor viability

* data integration and network sharing

* adoption of mobile devices

* health information exchange support and connectivity

* perfected interfaces with lab, pharmacy, radiology, medical billing partners, and others

Unfortunately, they won’t find it easy to find all of these features in a single EMR.  Of course, you faithful editor isn’t the be-all and end-all when it comes to EMR products (who could be?) but it seems to me that if even pricier enterprise products seldom offer all of these options, it’s decidedly unlikely that ambulatory products will. (OK, vendor viability is a judgment call, but in a world where so many practices don’t like their EMR, it’s hard to imagine that vendors are at their strongest.)

Folks, the truth is that it looks like we’re coming to a market crash of some kind. Physicians aren’t getting what they need from EMRs, but vendors aren’t keeping up, especially in the realm of specialty EMRs.

As if that wasn’t enough, the threat of fines looms for practices that don’t get their Meaningful Use act together, something they may have trouble doing if they’re in the midst of EMR shopping, installation and adoption.

Time is getting tight, and customers aren’t happy. Ambulatory vendors, what’s your next move?