Athenahealth has done very well in the market for electronic medical records and other provider information systems. It is being sold by one set of investors to two private equity firms for $17 billion dollars. The company may be good, but that is far too high a price in a very competitive market. We are seeing the result of the fed pumping trillions of dollars into the economy. This will be a very leveraged deal which will eventually stress the company.
Investors may get the sharp end of the stick and swallow some losses, as Sword Health, which manages musculoskeletal conditions, raised an insane $163 million at an even more insane $2 billion valuation. There is nothing proprietary about what this company does, and no barriers to entry.
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].