Regarding Melanie Evans and Vince Galloro's article on HCA sets new standards (registration required)—while we are unlikely in 2007 to see another giant hospital buyout like the HCA deal, there is a strong possibility we could see a fairly large deal in the healthcare IT sector in the near future.
Wall Street has buzzed with rumors that General Electric Co. is on the hunt for either Cerner Corp. or Allscripts Healthcare Solutions. Whether either of those potential deals happens, we are likely to see one of the large healthcare IT vendors bought out, since a number of Fortune 500 companies have been eyeing acquisitions in this area.
In a recent survey conducted by our firm, we found that the overall number of healthcare IT mergers is likely to increase in 2007, driven by the continuing growth in adoption of EMRs and other technologies. Also, many smaller health IT vendors are seeking to sell, as their venture capital partners seek to monetize their investments.
Although integration—the desire for all systems to work together—is a long-term trend, we see a healthy future for smaller, "best of breed" applications. Specialist physicians, among others, continue to favor the leading-edge technologies that larger, "one size fits all" vendors often lack.
James Brennan Managing partner MidMarket Capital Chicago
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