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Quality Systems Acquires HealthFusion for $165M

November 3, 2015
by Heather Landi
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In a move to build its ambulatory-focused strategy, Irvine, Calif.-based Quality Systems Inc. has acquired San Diego-based HealthFusion Holdings, a developer of cloud computing software for physician practices, for $165 million.

Quality Systems, the parent company of practice management and electronic health record (EHR) company NextGen Healthcare, announced the deal Oct. 30 and the deal includes a potential additional contingency of up to $25 million.

The acquisition comes on the heels of Quality Systems selling the Hospitals Solutions Division of its NextGen EHR business to QuadraMed Affinity Corporation last week. Quality Systems' president and CEO Rusty Frantz said that the divestiture of the company's hospital division enables Quality Systems and NextGen Healthcare to focus on its core, ambulatory business.

"This transaction underscores our commitment to further cementing our market position and emphasizing our core strengths within the ambulatory segment of healthcare delivery,” Frantz said in a release about the divestiture on Oct. 22.

HealthFusion develops web-based, cloud computing software for physicians and hospitals, including the 100 percent cloud-based MediTouch platform currently used by more than 3,000 physician practices, hospital ambulatory centers and medical billing services.

In a statement, Quality Systems said the acquisition of HealthFusion and its MediTouch platform would accelerate the cloud-based development of NextGen Healthcare core applications. Frantz said the acquisition of HealthFusion is another example of the company’s strategy to expand both client base and solution capabilities in the ambulatory marker.

MediTouch EHR was designed for use on mobile tablets such as the iPad and the various modules, including the EHR, medical billing, practice management, collections, patient portal, and clearinghouse.

“We believe our SaaS-based healthcare technology products will prove beneficial to Quality Systems’ NextGen Healthcare service offering as the company advances its cloud solutions capabilities,” Sol Lizerbram, M.D. and HealthFusion chairman, said in a statement. “This acquisition presents significant opportunity to capitalize on the joint successes both companies have achieved to date in the ambulatory market segment,”

Frantz added, “HealthFusion brings an extremely intuitive, fully mobile, cloud-based solution that affords smaller groups of physicians and other providers a clean EHR experience within a fully integrated suite of solutions for their practice. Over time, we will focus on expanding the platform to satisfy the needs of practices of increasing size and complexity. We will also look to provide some of our broader service capabilities to the HealthFusion client base.”

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