Healthcare Technology Featured Article

July 22, 2013

Healthcare IT Most Active Market for Mergers and Acquisitions

According to data released by Berkery Noyes Investment Bankers, healthcare IT was the most active market for mergers and acquisitions in the first half of 2013.

Healthcare IT accounted for 63 percent of transactions and 40 percent of total mergers and acquisitions volume during that time frame.

Constellation Software was a major acquirer during the first half of 2013. The company purchased QuadraMed Corporation, Quantitative Medical Systems, Inc., and Club Solutions from Fiserv, Inc. Additionally, Constellation Software acquired LRS Health Pty., Ltd.

TPG Capital provided financing for four major mergers and acquisitions including Incential Software, Inc., 360 Vantage, Semantelli and Appature. During 2012, TPG Capital financed only five transactions for the entire year.

Overall, Berkery Noyes estimates that total transaction volume for healthcare IT in the first half of 2013 totaled $8 billion.

A recent report from the Robert Wood Johnson Foundation (RWJF) found major increases in healthcare IT adoption at the clinical level. In 2012, 44 percent of hospitals reported having a basic electronic health records (EHR) system, which was an increase of 17 percent over 2011 levels.

The number of hospitals with EHR systems has tripled since 2010, when facilities began to receive stimulus funds for EHR adoption.

In fact, 42 percent of hospitals report that they have met Meaningful Use Stage 1 requirements, and over one-fourth say they participate in health information exchange (HIE) initiatives. According to RWJF, 33 percent of HIEs support accountable care organizations, and 45 percent of HIEs support patient-centered medical homes.

As the medical community continues to implement Meaningful Use, the business community has seen unprecedented opportunities for growth in healthcare IT. The growing demand for more healthcare technology is driving the increasing rates of mergers and acquisitions in healthcare IT.

Only 5 percent of hospitals report that they have completely met Meaningful Use Stage 2 requirements, but 63 percent report that they have met 11 to 15 of the criteria for Stage 2.

Edited by Alisen Downey
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