Black Book: Nearly all Paragon Users Optimistic about Allscripts Deal | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Black Book: Nearly all Paragon Users Optimistic about Allscripts Deal

October 2, 2017
by Rajiv Leventhal
| Reprints
Hospital boards are hopeful that the Allscripts acquisition will benefit their organizations

Nearly all of McKesson Paragon users (96 percent) in a recent survey reported that they are confidently optimistic that the Allscripts acquisition will improve Paragon client processes and technologies, and benefit their organizations.

The new research, from Black Book, included responses from 1,200 board, executive financial leaders from more than 200 McKesson Paragon client acute care providers. Black Book researchers determined that despite reported speculation and buzz, among these surveyed healthcare organizations, there are no reported board level or administrative level initiatives in place that haven't already been announced to replace the current Paragon platforms in 2018 or 2019.

In early August, Chicago-based Allscripts (NASDAQ:MDRX) announced that it had agreed to pay approximately $185 million in cash to acquire McKesson’s (NYSE:MCK) hospital and health system IT business, Enterprise Information Solutions. The breaking news came a year after McKesson Corp. announced the creation of a new healthcare information technology company with Change Healthcare, and also said at that time that it would seek strategic alternatives for its EHR (electronic health record)-focused business unit,  promising a smooth transition for its customers. The Enterprise Information Solutions portfolio includes Paragon (EHR); STAR and HealthQuest (revenue cycle solutions); Lab Analytics and Blood Bank; and OneContent (content management solutions).

And prior to this sale, McKesson had divested itself of ambulatory EHR assets. Allscripts, which ranked No. 13 on the 2017 Healthcare Informatics 100 with $1.3 billion in revenue, stressed that it would invest in and continue to offer Paragon as its integrated EHR and revenue cycle management solution for the small hospital market segment, while Allscripts Sunrise will continue as the primary platform for larger institutions.

At the time of the announcement, industry observers noted that Paragon has been in a state of limbo over the last year or so, leading to questions about what this means for its customer base with rumors swirling that McKesson was looking for a sale.

Coray Tate, KLAS vice president of clinical research, told Healthcare Informatics in August that Paragon customers have been through an interesting history with McKesson from the pre-meaningful use days in which expectations were reasonably set and everyone was happy. But then came meaningful use and all of the requirements that came with it, and it was at that same time when McKesson decided to shift resources away from its Horizon product with the goal to have Paragon step up and take on bigger hospitals, he explained. “Paragon was then asked to be more than just a community solution by being able to organize billing and other things, as meaningful use pushed clinicians to be much more involved. So you had to meet the expectations of bigger hospitals. They got hit with a perfect storm,” said Tate.

What’s more, other industry analysts took a keen interest in the price of the deal. Ben Rooks, founder of strategic and financial advisory firm ST Advisors, said at the time that it was well-known that McKesson had been looking for a home for these assets for the past few years, and that it was not a matter of if, but when they would close a deal. “The price [of the deal] was a low one; it’s a fixer-upper in a bad neighborhood. McKesson wanted to get rid of it. I think it’s safe to say that it was broadly shopped and that this was the best they could do,” said Rooks. An analysis of the deal from Jamie Stockton, senior analyst at Wells Fargo, also noted that Allscripts bought McKesson’s hospital software business “on the cheap.”

Circling back to the Black Book survey, of the eight Paragon clients that stated they were in EIS replacement processes prior to the announcement, six said they would include Allscripts in future consideration stages.

And, 63 percent of Paragon client hospital boards asserted that their financial positions are too insecure to replace their EIS in the two next years and 100 percent confirmed they have not approved capital expenditures for replacement EHR, which corresponds to the knowledge of all responding administrative, financial clinical and most technology managers.

"Nearly every Paragon client facility responding is focusing on acquiring other long delayed software initiatives because of previous EHR investments including revenue cycle management, analytics and population health tools and these will remain their primary strategic IT initiatives for 2018 to 2019, not EHR replacement," Doug Brown, managing partner of Black Book, said in a statement. "Hospital boards and executives are clearly hopeful the Allscripts acquisition will benefit their organizational processes and relieve their looming Paragon concerns."

Get the latest information on Health IT and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More

Topics

News

ONC Roundup: Senior Leadership Changes Spark Questions

The Office of the National Coordinator for Health IT (ONC) has continued to experience changes within its upper leadership, leading some folks to again ponder what the health IT agency’s role will be moving forward.

Media Report: Walmart Hires Former Humana Executive to Run Health Unit

Reigniting speculation that Walmart and insurer Humana are exploring ways to forge a closer partnership, Walmart Inc. has hired a Humana veteran to run its health care business, according to a report from Bloomberg.

Value-Based Care Shift Has Halted, Study Finds

A new study of 451 physicians and health plan executives suggests that progress toward value-based care has stalled. In fact, it may have even taken a step backward over the past year, the research revealed.

Study: EHRs Tied with Lower Hospital Mortality, But Only After Systems Have Matured

Over the past decade, there has been significant national investment in electronic health record (EHR) systems at U.S. hospitals, which was expected to result in improved quality and efficiency of care. However, evidence linking EHR adoption to better care is mixed, according to medical researchers.

Nursing Notes Can Help Predict ICU Survival, Study Finds

Researchers at the University of Waterloo in Ontario have found that sentiments in healthcare providers’ nursing notes can be good indicators of whether intensive care unit (ICU) patients will survive.

Health Catalyst Completes Acquisition of HIE Technology Company Medicity

Salt Lake City-based Health Catalyst, a data analytics company, has completed its acquisition of Medicity, a developer of health information exchange (HIE) technology, and the deal adds data exchange capabilities to Health Catalyst’s data, analytics and decision support solutions.