It's finally happened. GE Healthcare can now add "major player in HIT" to the list of markets it dominates. IDX
shareholders will receive $44 per share (a 25% premium), for a total
cost to GE of $1.2 billion. IDX was the third largest HIT vendor, with
$520 million in revenue in 2004 (based on Healthcare Informatics' Top 100 list for 2005). In 2004 GE Healthcare IT generated $746 million in revenue.
IDX stumbled badly earlier this summer when it was replaced by Cerner
as the UK's National Health Service (NHS) Southern region EMR vendor.
Speculation was that IDX was under staffed leading to a schedule slip
in the NHS project, and that the loss of that lucrative contract would
impact long term viability. While the stock hit a 52 week low of $28.29
shortly after losing the NHS deal, the stock gradually climbed to
$35.17 yesterday, before the GE acquisition was announced.
From the press release:
healthcare IT vendor, offering one of the most comprehensive suites of
clinical, imaging and administrative information systems on the market.
The above sounds good, but the
reality experienced by customers will depend on the effort GE puts into
actually integrating IDX systems (some with their own integration
issues) into GE Healthcare products. Irrespective of systems
integration, a key potential benefit to customers will be a single
point of contact and theoretical avoidance of vendor finger pointing.
Along with this will come an opportunity for GE to implement the
typical "single vendor solution" competitive strategies to lock in
their installed base. In every single vendor solution, some products
are dogs; which of the combined GE and IDX products will be dogs (and
how doggy the actually are) will play a key role in competitive
This move raises many interesting questions. In what ways will GE move
to leverage this acquisition with their clinical information systems
and medical device product lines? How much will they invest in R&D
to deliver on the inevitable marketing spin? How will competitors
respond? The leading HIT vendors; McKesson ($1.2 billion revenue in
2004), Cerner ($926 million revenue in 2004), Misys ($507 million
revenue in 2004), Eclipsys ($309 million revenue in 2004), Epic ($259
million revenue in 2004), and Meditech ($281 million revenue in 2004)
will all be reassessing their plans and strategies in light of this
(not so surprising) news.
UPDATE: As always, the HIStalk guy brings insight and opinion -- this time to the IDX acquisition. My favorite bit:
to the mishmash of technologies it already owns, perhaps with less
interest in CareCast than us hospital IT types might assume. Can they
increase sales simply because they're a conglomerated GE Healthcare?
Read the whole thing.
UPDATE: More perspective from HIStalk in this follow up post on the GE acquistion of IDX.
UPDATE: Here's a slightly different take on the IDX acquisition at Peter Charbonnier's Chief Compaint. And check out this post from an IDX support specialist.
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