Welcome to the healthcare version of “Let’s Make a Deal.”
Beginning with last year’s acquisition of Electronic Data Systems by computer giant Hewlett-Packard for $13.9 billion, the healthcare IT market has seen its fair share of blockbuster deals as the big players look to diversify their interests.
This past April, Oracle outbid rival IBM in a contentious $7.4 billion takeover of Sun Microsystems. And September saw the acquisitions of Perot Systems by Dell for $3.9 billion and Affiliated Computer Services by Xerox for $6.4 billion.
IBM, which lost out on the Sun Microsystems deal, then saw Dell hire away top executive David Johnson to become senior vice president for corporate strategy, isn’t standing pat. The company is investing roughly $6 billion a year in healthcare-related research, officials say, and is targeting the cost containment, analytics and interconnectivity business as three areas of future growth.
“The fact that the market is converging so much ... we’re having so many interesting conversations,” said Rob Merkel, head of IBM Healthcare’s global business services. “Right now you’ve got an industry that’s in great pain and in need of reform, and you’re getting an influx of spending.”
“Without question, analytical insight is something that’s going to deliver tremendous value in healthcare over the coming years,” he added.
Also added to the mix are collaborations to push technology into the physicians’ market, which historically has been reluctant to embrace IT but stands to benefit from stimulus funding. While companies like Allscripts, InterSystems and McKesson have led the charge, Cerner recently signaled a shift in its strategy with a first-ever collaborative agreement with CDW Healthcare.
While adoption of EHRs in the U.S. marketplace has been slow, many physicians will look to implement EHRs in the next 24 months due to the HITECH provision in the American Recovery and Reinvestment Act, said Mike Valentine, executive vice president of worldwide client organizations for Cerner. Our collaboration with CDW Healthcare provides our clients a single touch point for technology expertise, solutions guidance and deployment ser- vices, enabling them to focus on what matters most providing quality patient care and improving the financial health of their practice.
The feeding frenzy may not be over. With EDS and ACS off the boards, Los Angeles-based Computer Sciences Corp. is the lone independent outsourcing vendor and has been identified by analysts as a potential target for purchase. Meanwhile, both Canon and Cisco have publicly announced an interest in new healthcare-related acquisitions.
