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Health Information Technology Acquisition Binge

By January 11, 2010Commentary

There have been several health information technology acquisitions in the last few months.  The most recent is Lawson Software’s acquisition of HealthVision.  (Lawson Release) HealthVision specializes in software that helps multiple systems share data and functionality, something which is sorely needed by many providers, and which may see even greater demand as providers add the new systems called for by the stimulus bill and other HHS and CMS initiatives.  Lawson believes there will be a particular opportunity with various health information exchanges that may be created n the next few years.

There clearly will be substantial increases in health information technology spending and many companies are striving to position themselves to benefit from that spending.  Health information can create efficiencies and cut costs.  The payor community has a good track record in that record, as does the entire pharmacy supply chain.  But expectations are too high for many types of health software that do not have demonstrated value either in reducing costs or improving care. Buyers will need to be particularly diligent in this environment and with many competing acquirors, overpayment is a risk.

Research also shows that many acquisitions do not provide the benefits acquirors hoped for.  This occurs for many reasons, often related to misplaced synergy expectations.  In regard to software, acquisitions can bring many headaches, including customer discontent.  If not carefully managed, the current rush to employ more software in providers’ facilities will actually raise costs and threaten quality, as been noted in several recent studies.  This will create more opportunities for consultants to attempt to rectify problems and will also undoubtedly give a boost to the health information technology litigation industry.

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