M&A Can Be Hazardous To Health IT

Sayonara interoperability, hello 'Frankenstein'

Mergers and acquisitions (M&A) can be hazardous to a company's health, industry experts often warn. In the realm of health IT, this caveat has proved no exception. Robert W. Holthausen, professor of accounting, finance and management at the University of Pennsylvania Wharton School, is one among many experts issuing the caveat. "Various studies have shown that mergers have failure rates of more than 50 percent," he wrote in a university piece. In fact, he added, one recent study found that a whopping 83 percent of mergers fail to actually create value.

Health IT professionals also have expressed concern over industry M&A activity. For example, Barry Blumenfeld, MD, chief information officer at MaineHealth,   Maine's largest healthcare system, has cited poor electronic health record (EHR) product integration resulting from M&A as one of the biggest reasons its hospitals will transition from Allscripts and MEDITECH  -  companies that have recently struggled due to M&A activity  -  to Epic.

With Allscripts, for instance, "We found we weren't getting the integration we needed," Blumenfeld said. Maine Medical Center, the system's largest hospital, has already replaced Allscripts Sunrise Clinical Manger (SCM) with Epic systems, as SCM has fallen short in terms of integration with the ancillary and departmental side of things. Blumenfeld cited examples of trying to connect pharmacy, emergency room, decision support and ambulatory, which became very difficult with the previous systems. One of the reasons Epic's products are often preferred, he said, is because they haven't expanded by mergers and acquisitions. Consequently, all their products are essentially unified and compatible with one another...