Allscripts acquires Practice Fusion: what this means for users

The last year has witnessed the continued consolidation of the EHR market with Allscripts acquiring McKesson Corporation ’s hospital and health system IT business, and Enterprise Information Solutions for $185 million in cash in August 2017. Another deal involving Allscripts was announced in early 2018 as the company occurred acquired Practice Fusion for $100 million in cash. The deal is expected to close in the first quarter of 2018. With these deals occurring, and other consolidation a number of questions arise, particularly regarding what changes users can expect with the McKesson, Practice Fusion and Allscripts products.

What to expect in the wake of these acquisitions

Prior to both acquisitions, Allscripts was the seventh most-used certified health IT vendor reported by hospitals participating in the Medicare EHR Incentive Program, according to ONC data released in July. Further, based on 2017 market data, Allscripts and Practice Fusion were ranked the #3 and #4 EHR systems by market share according to SK&A in 2017. The Practice Fusion acquisition will make Allscripts the single largest ambulatory-practice EHR in the US and with the McKesson acquisition, Allscripts expanded its footprint in the U.S. large practice health systems space currently dominated by Epic and Cerner. Given the market shares that Allscripts already held and then combined with the companies it acquired, it reasons that a sizable portion of EHR users may be affected by changes in the status of both Practice Fusion and McKesson.

Presently, reports indicate that Allscripts will leave the current McKesson products on the market largely undisturbed. In an interview published in Beckers Hospital review, Allscripts CEO Paul Black indicated that the McKesson Paragon EHR will remain as is. Black stated:”We are going to pull those operations (Paragon) into ours, from a development, sales, and services standpoint and make Paragon a great community hospital solution that's got inpatient, outpatient and revenue cycle all baked into one EMR.” From this statement, it appears that Allscripts will attempt to capitalize on McKesson’s current value an potentially try to improve on the McKesson products by enhancing them with Allscripts solutions.

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Reports indicate that Practice Fusion will carry on as it had pre-acquisition from a product offering standpoint. Allscripts President Rick Poulton was quoted: “We believe this transaction will directly benefit Practice Fusion clients, who will now have access to Allscripts solutions and services. Poulton also noted, “We're also working on our value-based tools, our cost-accounting solutions, our interoperability platform and our payer and life sciences suite of solutions, as well as what we're doing around the topic of the consumer.” However, a recent report indicated that the status quo at Practice Fusion may not be as safe as thought when the acquisition was announced. Practice Fusion announced it is abandoning the free EHR software business model that made it so popular among users, yet likely not financially sustainable to Allscripts. The service will now cost $100 per physician per month.

The historically fragmented EHR market is likely going to witness many more acquisitions this year and in coming years as well, as larger players seek to solidify their position by buying up their competition particularly in markets in which they seek to expand. For users, it could be an interesting time that could involve equal shares of welcome and unwelcome surprises.

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Jeff Green

About the author…

Jeff Green, MPH, JD works as a freelance writer and consultant in the Healthcare information Technology Space.

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Jeff Green

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