Healthcare


athenahealth Acquires RazorInsights

by Daniel Ruppar 13 May 2015
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In line with its strategy of “connecting care”, athenahealth has acquired RazorInsights, a vendor of cloud-based clinical and financial solutions for rural, critical access, and small community hospitals. With this acquisition, ATHN continues its foray into solutions for in-patient care, and extends its presence into the 50-bed-and-under inpatient care environment, which accounts for approximately one-third of the U.S. hospital market. Terms were not disclosed but industry experts speculate that the acquisition price was $40 million.

http://www.athenahealth.com/blog/2015/01/14/athenahealth-acquires-razorinsights

ATHN provides cloud-based services and IT solutions in practice management, EHR, and patient communication, primarily to small independent (ambulatory) physician practices. The company’s core strength has traditionally been more on the services side; their clinical solutions are seen as somewhat weak compared with key ambulatory market competitors like eClinicalWorks and Allscripts.
 
The RazorInsights deal is in line with ATHN’s goal to bolster their enterprise strategy by gaining a foothold in the hospital market and RazorInsights’ cloud-based solutions and small customer base of 25 rural, critical access and community hospitals appears to be a strategic fit for ATHN. The deal is similar to ATHN’s 2011 acquisition of Proxsys, which led to the development of athenaCoordinator, a platform to help hospitals improve connectivity and data transfers across the patient care continuum. That product has had limited uptake.
 
The deal could provide a short term boost to both companies as there is a large and growing market for technologies and services designed to help small hospitals meet the challenges of healthcare reform. Cloud-based solutions offer distinct cost and logistic advantages to small, cash-strapped entities. However, ATHN will need to quickly demonstrate some solid value on this deal, particularly given the results from their almost $300 M acquisition of Epocrates in 2013.
 
Ultimately, ATHN faces an uphill battle with their enterprise strategy. While they do hold some appeal for smaller providers today, those providers will increasing get absorbed by larger entities served by larger IT vendors (e.g., Epic, Cerner, Allscripts); there is a high risk of displacement in that scenario.

 

 

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