Allscripts closes on acquisition of McKesson’s health IT business

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The acquisition of McKesson’s Enterprise Information Solutions (EIS) business focused on hospital and health system IT by Allscripts has been completed as of Oct. 2, a move which appears to have tremendous support among providers using McKesson’s Paragon electronic health record (EHR) system.

Allscripts acquired the EIS business for $185 million in cash. The agreement said Allscripts will continue to offer and invest in the Paragon platform for smaller hospitals as “an integrated EHR and revenue cycle management solution.”

“Our highest priority is to successfully meet our clients’ complex needs today and in the future,” Allscripts CEO Paul Black said in a statement. “It’s critical that healthcare organizations deliver the best care possible, and we expect this transaction will enable Allscripts to offer the most comprehensive, high-performing health information technology and solutions, which will help clinicians achieve our shared mission.”

A Kalorama Information report released earlier this year placed McKesson No. 2 in EHR market share based on revenue related to hardware, software and service. The same report placed Allscripts in fourth place.

Existing users of McKesson’s Paragon platform seem pleased with the change. In a Black Book Research survey referenced by Allscripts, 96 percent of hospital board members and financial executives said they were “confidently optimistic” the acquisition will “improve processes” and benefit healthcare organizations.

Some 63 percent of hospital boards at Paragon facilities said their financial positions “are too insecure” to replace EIS in the next two years. Every respondent said they haven’t approved capital expenditures for an EHR replacement.

"Nearly every Paragon client facility responding is focusing on acquiring other long delayed software initiatives because of previous EHR investments including revenue cycle management, analytics and population health tools and these will remain their primary strategic IT initiatives for 2018-2019, not EHR replacement," said Black Book managing partner Doug Brown. "Hospital boards and executives are clearly hopeful the Allscripts acquisition will benefit their organizational processes and relieve their looming Paragon concerns."