A year-old marketing affiliation between two privately held healthcare information systems companies has progressed into an agreement to merge.
Compucare Co.'s 70 clients and Health Systems Integration's 20 would give the combined company about $50 million in annual revenues. Terms of the agreement were not disclosed.
The agreement between Compucare, Reston, Va., and HSI, Minneapolis, is another example of efforts to widen the range of care settings served by a single information systems company, as health reform erases boundaries between hospitals and other providers.
Compucare's Affinity Health Care Information System includes clinical, financial and patient management software for hospitals, while HSI concentrates on managed-care functions such as enrollment, billing and compiling administrative and clinical data, said Ronald Aprahamian, chairman and chief executive officer of Compucare.
The two companies intend to merge into one parent company but keep their separate operations and locations, Mr. Aprahamian said. Ultimately, the companies will link their products to share and exchange such information as patient records and demographic data, he said.
"There's a good logic, a good synergy between Compucare and HSI," said Andrew Lederer, a healthcare consultant with the Redwood City, Calif.-based Kennedy Group. He said the merger between two vendors of different products is "a sign of the times. You can't function in isolation."
The May 4 Compucare-HSI merger announcement came less than a week after HBO & Co. said it would acquire Ibax Healthcare Systems, bringing together 1,000 healthcare clients and $300 million in annual revenues (May 9, p. 10). The purchase price of that transaction wasn't disclosed.
Vendors also are entering into partnership agreements that stop short of a merger but result in a broader range of integrated information system capabilities to offer prospective buyers (Feb. 21, p. 12).
These partnerships, sometimes called "teaming agreements," usually involve a larger vendor fitting a key missing ingredient into its scope of computerization instead of producing it in-house.
Vendors say their partnerships go further than joint marketing: They pursue technical integration of products so connection problems are ironed out in advance of purchase.