A well-regarded but struggling clinical information systems company agreed last week to be purchased by a mammoth builder of computer networks with the resources to reverse the small company's fortunes.
Science Applications International Corp., a San Diego-based research and engineering company with more than $4 billion in annual revenues, said it would acquire all the shares of Oacis Healthcare Holdings Corp., San Rafael, Calif., for $53 million in cash.
The centerpiece of the Oacis product line is a clinical data repository, considered essential to healthcare networks that want to improve care and contain costs through better analysis.
But although managing clinical information may be critical to the mission of integrated delivery systems, the Y2K time crunch has put the issue on the back burner (Feb. 22, p. 52).
"No doubt Y2K has slowed or even stopped the acquisition of mission-critical systems," said James McCord, Oacis chairman. The company had projected 10 deals for 1998 but cut only four, he said.
That was only half the problem. Because of increasing dependence on complex technology, healthcare networks have sought the security of information systems suppliers judged to be viable for the long term, McCord said. "We were simply too small for a big system to bet on. And we target big systems."
That sent the 185-employee company looking for a larger partner "to get us to the next level. We went about as far as we could on our own," he said.
Meanwhile, SAIC had planned to more than double its healthcare-related business by increasing its ability to help diverse networks capture data electronically and use information skillfully, said Tracy Trent, executive vice president and manager of SAIC's health systems group.
The addition of Oacis puts "more tools in our box" of system integration measures used by a work force of 2,250 to craft large-scale information networks, Trent said. About half of the health group's $400 million in revenues comes from the U.S. Department of Defense for projects in the military and Veterans Affairs health systems.
