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Allscripts/Eclipsys Merger Seen as Unsurprising, Yet Strategic

June 10, 2010
by Jennifer Prestigiacomo
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New company capitalizes on coordinated care and market share

With yesterday’s announcement of the Allscripts/Eclipsys merger came little surprise. Many in the industry saw the union of healthcare software giants Chicago-based Allscripts and Atlanta-based Eclipsys as a long-awaited strategic partnership for the companies, a way for each to fill in service offerings gaps.

The merger was also seen as a drive toward increased market share in the crowded HIT market. Allscripts and Eclipsys ranked No. 12 and No. 13, respectively, on the 2010 Healthcare Informatics 100 List, behind industry heavyweights Cerner (No. 5) and Epic (No. 11).

“Eclipsys has not had a strong position in the ambulatory market and was in need of a partner in that space. Both companies have solid products and the new company has the potential to be serious competitor to Cerner and Epic,” says Greg Kall, system VP and CIO for Summa Health System, an Eclipsys customer. “However, the success of the new company will be contingent upon their ability to quickly integrate their software platforms and integrate their sales and implementation organizations.”

Rick Schooler, vice president and CIO of 1,780-bed Orlando Health, an Allscripts and Eclipsys client, also felt Allscripts needed a strategic partner in the market. “Allscripts needed a solid inpatient partner, and Eclipsys needed a solid outpatient partner—that is the chemistry that made them go well together,” says Schooler. “I think it’s as a good move and strategic overall for both companies and vital to retain market share in this market that has increasing number of integrated products.”

The Eclipsys/Allscripts merger was seen as a positive move for healthcare system IT interoperability in light of meaningful use requirements set forth by the HITECH provisions of the American Recovery and Reinvestment Act (ARRA).

“HITECH has further elevated the importance of integrating information across sites and setting of care, as soon as possible, and the potential advantage of EHR vendors who can offer to make that easier than customers having to splice together foreign software products themselves,” says Jane Metzger, principal researcher, Emerging Practices for the Falls Church, Va.- based CSC Corporation. “Assuming that Eclipsys and Allscripts build that bridge, it seems to me that each vendor product is in a stronger position in the marketplace.”

Reached just hours after the announcement of the Allscripts/Eclipsys merger, Barbara Morris, M.D., a pediatrician in Saratoga, N.Y., and chief medical officer of Community Care Physicians, a 242-physician multispecialty medical group based in Latham, N.Y. that is an Allscripts customer organization, said, "Given the direction of medical care, and of healthcare reform, it just makes sense to create the ability to communicate between large components within a medical community—hospital, outpatient, laboratory, radiology, after-care—that is all essential. And to the extent that one is working within a community, it can only be a good thing for the patient to have that kind of commonality of vendor across a wide distribution."

Orlando Health’s Schooler also saw the Allscripts/Eclipsys merger a sign of future HIE consolidation. He noted dbMotion and Medicity, with ties to Allscripts and Eclipsys, respectively, could become more prominent with this merger.

“Another area that I think will see more consolidation is in the Health Information Exchange (HIE) vendors,” says Schooler. “As big and small health systems think about how we tie all our information together across all our venues because many of us have multiple EMRs, inpatient and outpatient, this positions two or three HIE vendors in a different light because of the relationship they have with Eclipsys and Allscripts.”