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Industry Watch

August 1, 1998
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[Industry Watch]HL7 TO PUBLISH ARDEN SYNTAX STANDARD


Health Level Seven (HL7) announced it is acquiring publishing rights to the American Society for Testing and Materials (ASTM) Standard E1460: Arden Syntax for Medical Logic Modules. It’s a move to consolidate efforts, HL7 says, as both HL7 and ASTM had their own projects for Arden Syntax, a coding language for medical software. HL7 plans to publish its version of the standard early in 1999.


HHS PROPOSES EIN
Continuing with obligatory recommendations for administrative simplification in healthcare under HIPAA, the secretary of the Department of Health and Human Services announced proposed standards for a national employer identification number (EIN). Under the recommendations, the EIN will be based on existing employer identifiers already assigned by the Internal Revenue Service. Healthcare providers, health plans and clearinghouses will use the numbers on electronic health transactions that require an employer identifier. Currently, multiple identification numbers are used. When the standard is implemented, HHS claims the EIN will save the industry $1.5 billion in five years.


DAOU BUYS CONSULTING COMPANY
Daou Systems Inc., (Nasdaq: DAOU) San Diego, is continuing its aggressive growth strategy by acquiring Indianapolis-based Technology Management Inc. for $22.3 million, counted as a pooling of interests merger transaction. Technology Management, which provides IT consulting, project management and implementation services, will become a wholly-owned subsidiary of Daou.


MEDIRISK ACQUIRES SUCCESSFUL SOLUTIONS
Medirisk, Inc. (Nasdaq: MDMD), Atlanta, providers of healthcare decision support software and analytical services, announced it has acquired healthcare information company Successful Solutions, Inc., Vidalia, Ga., for $2.9 million in cash and 190,000 shares of Medirisk stock. The acquisition is the company’s sixth since going public in 1997.


HEALTHDESK AND MC INFORMATICS MERGE
Consumer health information software developer HealthDesk Corp. (Nasdaq: HDSK), Berkeley, Calif., and MC Informatics, a privately-held Fountain Valley, Calif., healthcare IT outsourcing firm, announced terms of a merger agreement. HealthDesk is issuing 5 million shares of its common stock to MC Informatics shareholders. The company plans to sell off HealthDesk’s technology and operations to focus on healthcare IT outsourcing.


PRISM EXPANDS HEALTHCARE BUSINESS
Business intelligence applications developer, Prism Solutions, Inc. (Nasdaq: PRZM), Sunnyvale, Calif., announced it has acquired healthcare data warehousing provider Systems Techniques, Atlanta. Prism, which launched into vertical market offerings last year, adds to its healthcare business with the purchase.


TRANSCEND SERVICES FORMS PRODUCTS DIVISION
Healthcare information management services company, Transcend Services, Inc., (Nasdaq: TRCR) Atlanta, propelled itself into software development with the acquisition of Beaverton, Ore.-based Health Care Information Systems, Inc. (HCIS). To accommodate the new business line, Transcend launched a subsidiary, Cascade Health Information Software--Cascade being the previous name of HCIS’ information management product.


SUMMIT QUITS DEVELOPING SOFTWARE
Summit Medical Systems, (Nasdaq: SUMT) Nashville, Tenn. announced its plans to exit the software development market after continuing to realize poor financial returns from its products. The company said it will discontinue software development and marketing, and explore options relating to the sale of that part of its business. However, it will continue to support Vista and Crescendo clients through June of 1999. As a result, Summit will lay off 29 employees and take a second quarter charge of $5.4 million for costs associated to the discontinuation. The company, which recently moved its headquarters from Minneapolis to Nashville, Tenn., will focus its business efforts on clinical research and clinical trials management services.


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