Some prominent vendors in the healthcare information systems industry were conspicuously missing a year ago from a market research firm's report on the managed-care information systems sector.
That's because companies such as Shared Medical Systems, HBO & Co., Meditech and PHAMIS were still short on presence in a market served by small vendors capitalizing on the shortcomings of traditional patient-accounting systems, said Thomas G. Morrison, partner with Charles J. Singer & Co., author of the November 1993 report.
But during the past year, big vendors have been scrambling to get in, Mr. Morrison said. SMS struck an agreement with Health Systems Design Corp. to integrate that company's Diamond managed-care system into the SMS lineup of healthcare information services. HBO & Co. began marketing a managed-care product adapted for its Pathways product line, the result of acquiring Atlanta-based Biven Software in June 1993. Meditech, Compucare and PHAMIS wrote managed-care software into their main healthcare information systems.
"We're sort of the new guys on the block," said David Engert, who was president and chief operating officer of Biven Software until the sale in 1993. He's now vice president of sales for the managed-care group of HBO & Co.
The Singer report includes these niche vendors:
Dilts Kappeler Durham & Co., Rocklin, Calif.
Hospital Cost Consultants, Pleasanton, Calif.
HCm, Torrance, Calif.
MMC, San Francisco.
Transition Systems, Boston.
Ernst & Young, Cleveland.
Raleigh Systems, Cleveland.
Trego Systems, Bainbridge Island, Wash.
With estimated total sales of $38 million in 1993, the niche's ability to capitalize for a surge in demand is limited, observers said. But vendors are attracting investors and merger partners.
The Medstat Group's acquisition of DKD (Sept. 19, p. 13) has provided capital commitment "in excess of a few million dollars" to take advantage of a booming market, said Walter Dilts, DKD's president.
Hospital Cost Consultants was acquired in December 1993 by First Financial Management Corp., an Atlanta-based information services conglomerate that processes credit cards, manages accounts receivable, and stores and distributes data.
First Financial is providing HCC a "multimillion-dollar per year" stake in research and development, said Mark Emkjer, HCC's president.