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Industry Watch

February 1, 1998
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Eclipsys, Delray Beach, Fla., announced it will purchase Motorola’s Tempe, Ariz.-based Emtek Healthcare Division. Motorola will retain a seat on Eclipsys’ board of directors. Eclipsys’ interest in Emtek is in the technology and not market share, says corporate communications manager M.F. McKinsey. Eclipsys will interface Emtek Continuum 2000 point of care software with its TDS 7000 clinical system and market the system with its SunSuite client/server applications. Although Motorola will retain Emtek’s international operations, Motorola’s presence in healthcare will primarily be through its wireless products. Rumors have circulated throughout the industry that Motorola had been looking to unload the clinical IS division for some time. Terms of the deal were not released.

Medaphis once again restructured its healthcare IT operations by forming Per-Se Technologies, a business unit combining Medaphis’ Business Service Group that provides system integration and other services, and the Healthcare Information Technology business, comprised of Atwork, Health Data Sciences and Consort Technologies. Per-Se is based in Atlanta with operations in Chapel Hill, N.C., San Jose, Calif., and San Bernadino, Calif.

ProxyMed, Inc., Ft. Lauderdale, Fla., acquired financial EDI services company, U.S. HealthData Interchange, a subsidiary of Dallas-based Avatex Corp., for $4 million in cash. U.S. HealthData Interchange, which provides claims transaction services through its EZ-Claims software, adds approximately 3,800 payors and providers to ProxyMed’s client base. ProxyMed provides the ProxyNet EDI service through its clients’ existing practice management information systems.

QuadraMed, Larkspur, Calif., announced it acquired Rothenberg Health Systems Inc., Woodland Hills, Calif., and its subsidiary Healthcare Research Affiliates, a HEDIS reporting consulting company for $37 million in QuadraMed common stock. Rothenberg develops the EZ-CAP managed care information system.

Atlanta’s National Data Corp. (NDC), acquired Physician Support Systems (PHSS), Inc. for $176 million in stock. The Mt. Joy, Pa. company provides administrative data management and support services to more than 2,000 physicians. PHSS shareholders received .453 share of NDC stock for each PHSS share, based on the average closing price of NDC stock between November 13 and December 5, 1997. The deal, announced as a definitive agreement in October, was in limbo just prior to the December 19 closing as the result of a clause allowing NDC to terminate the transaction because the average closing price for NDC stock during the dated period was lower ($35.7969 per share) than the exchange ratio agreement allowed ($36.782 per share). PHSS agreed to maintain the lower ratio to close the deal.

NDC also completed the acquisition of healthcare database management company Source Informatics Inc., and a physician survey business from Pharmaceutical Marketing Services for $35.7 million in cash and 2.7 million shares in common stock at $32.50 per share. NDC posted a 17 percent increase in second quarter (ended November 30) revenue.

Medirisk, Inc., Atlanta, completed its fourth acquisition since May with the purchase of Medsource, Inc., the St. Paul, Minn. physician database company, for $250,000 cash and $500,000 in assumed debt. Medirisk will incorporate Medsource’s products into its line of decision support and database software.

US Servis, the Somerset, N.J., clearinghouse and MetroPlus Health Plan, a division of New York City Health and Hospitals Corp., settled their legal dispute. US Servis will receive $3,132,118 for services rendered to MetroPlus through September 30, 1997, and an additional $2,237,500 for services to be provided through February 1998. US Servis claimed MetroPlus withheld $3.5 million for third-party administrative services. MetroPlus contested that they withheld payments because services under a three-year contract were not being fulfilled by US Servis.

Superior Consultant Holdings Corp. of Southfield, Mich. announced it has combined its two consulting practice subsidiaries. Superior Consultant Company, Inc. and Enterprise Consulting Group, Inc. will offer networking and telecommunications business services under the name Superior Enterprise Network Solutions.

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