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Allscripts and Eclipsys announce merger

CHICAGO and ATLANTA – Allscripts, a leading provider of clinical software, information and connectivity solutions for physicians, and Eclipsys, a leading enterprise provider of solutions and services for hospitals and clinicians, have announced an agreement to merge in an all-stock transaction valued at approximately $1.3 billion.

The combination of Allscripts and Eclipsys will create a leader in healthcare information technology, with a comprehensive solution offering for healthcare organizations of every size and setting.

By combining the leading physician-office and post-acute care solutions from Allscripts with Eclipsys’s leading enterprise solutions for hospitals and health systems, the combined company will offer a single platform of clinical, financial, connectivity and information solutions.

The combined company’s client base will include over 180,000 U.S. physicians, 1,500 hospitals, and nearly 10,000 nursing homes, hospices, home care and other post-acute organizations. The combined company will be positioned to connect physicians, other care providers and patients wherever care is provided – in the hospital, in small or large physician practices, in extended care facilities, or in a patient’s home – resulting in the unique ability to deliver a single patient record and a seamless patient experience.

Glen Tullman, Chief Executive Officer of Allscripts, will be the Chief Executive Officer of the combined company. Phil Pead, President and Chief Executive Officer of Eclipsys will become Chairman of the combined company and, on a full-time basis, will focus on key client and strategic relationships, product and process integration, strategy and the company’s international business.

“We are at the beginning of what we believe will be the single fastest transformation of any industry in U.S. history, and the combination of the Allscripts Electronic Health Record portfolio in the physician office and leadership in the post-acute care market, with Eclipsys’s market-leading hospital enterprise solution creates the one company uniquely positioned to execute on this significant opportunity,” said Mr. Tullman.

The merger positions the combined company to help its clients more effectively access the approximately $30 billion in federal funding for hospital and physician adoption of Electronic Health Records (EHR) provided by the American Recovery and Reinvestment Act (ARRA). Driven in large part by the ARRA incentives, which begin in 2011, EHR adoption by U.S. physician practices is projected to grow from 12 percent to 90 percent by 2019, according to the Congressional Budget Office’s (CBO) March 2009 report, “Options for Controlling the Cost and Increasing the Efficiency of Health Care.” The CBO report also projects hospital adoption of acute-care EHRs will increase from 11 percent to 70 percent during the same time period.

Mr. Tullman continued, “Our vision and the vision behind ARRA is to leverage information technology to create collaboration between providers in all care settings, helping to improve the quality and lower the cost of care. The merger of Allscripts and Eclipsys creates one company with the scale, breadth of applications and client footprint to bring that vision to life by connecting providers in hospitals, physician practices and post-acute organizations across the country.”

Growth in Electronic Health Record adoption has been accelerated by hospitals and health systems offering to support and subsidize the technology for affiliated physicians, under the Stark Law safe harbor. For example, North Shore Long Island Jewish Health System recently announced it would subsidize up to 85 percent of the cost of implementing the Allscripts Electronic Health Record for over 7,000 affiliated physicians in New York City and Long Island. North Shore-LIJ’s hospitals currently utilize the Eclipsys Sunrise Enterprise suite of solutions as well as the Allscripts Emergency Department and Care Management solutions.

Mr. Tullman continued, “Many health systems are following North Shore-LIJ’s example, providing electronic health records to their affiliated physicians. The combination of Allscripts and Eclipsys creates a ‘hub’ of large and well respected hospitals that will accelerate connection to 50,000 practices using Allscripts solutions, the largest base of physician users of any healthcare IT company. By leveraging our collective footprint, industry-leading products and strong focus on interoperability, the combined company will facilitate better communication between hospitals and physicians and create a new model and a new way of thinking about health based on information and connectivity.”

One Company to Deliver a Single Patient Record
“Both Eclipsys and Allscripts share a vision of a connected system of health in which critical information follows the patient and informs all providers that assist the patient across the complete care continuum,” said Mr. Pead. “This merger will turn that vision into a reality. Healthcare isn’t confined to the four walls of any single location, yet traditional healthcare IT companies deliver monolithic ‘information silos’ that fail to connect to other systems. Our approach is to instead focus on creating a single patient record connecting all applications used within an organization and across a community.”

The Eclipsys Sunrise Enterprise and Performance Management solution for hospitals and the Allscripts industry-leading portfolio of solutions for physician practices currently leverage common platforms, including Microsoft.NET and other advanced technologies. This will accelerate the delivery of an integrated hospital and physician practice offering. The companies also share an ‘open architecture’ approach, simplifying the connection to third-party applications across every care setting, resulting in a single patient record.

Additionally, the combination of Allscripts and Eclipsys solutions, each known for having the highest physician utilization in their respective markets, will establish a clear leader in driving “meaningful use,” the criteria that physicians and hospitals must satisfy in order to qualify for federal funding under ARRA. Pead continued, “The combined company will be unique among healthcare IT companies not only in our ability to drive utilization, but also in our ability to quickly integrate our solutions and connect clinical information across every link in the healthcare chain. In combination with our powerful analytics and revenue cycle solutions, healthcare organizations will finally be able to realize the true promise of information technology, improving both clinical and financial outcomes across the entire community of care.”

Posted June 17, 2010