Allscripts buys ECIN for $90M

Allscripts, long known for its clinical software and information systems for physicians, is taking aim at hospitals now with the purchase of the Extended Care Information Network, a Chicago-based provider of hospital care management and discharge planning software.

The deal, valued at roughly $90 million, enables Allscripts, also based in Chicago, to coordinate the exchange of information between hospitals, physicians based outside the hospital and post-acute care facilities. Following Monday's announcement, the company also announced the formation of a new Hospital Solutions Group to combine ECIN's offerings with Allscripts' emergency department information systems (EDIS) and Canopy care management solution.

"Our acquisition of ECIN represents the convergence of two market leaders and will help connect hundreds  of hospitals and thousands of post-acute care facilities to our network of ambulatory physicians, bringing us one step closer to our vision of a truly interconnected healthcare system," said Allscripts CEO Glen Tullman. "This combination provides significant leverage for each of our product offerings and broadens Allscripts relationships in the hospital market at a time when hospitals are becoming more important influencers in the electronic health record sales process."

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Late last year, following changes to the federal Stark regulations which allowed hospitals to assist affiliated physicians in adopting EHRs and electronic prescribing systems, Allscripts saw a surge in business as hospitals sought out the company to help them connect to outlying physicians' offices and clinics. In addition, the federal government and other stakeholders have proposed requiring the automation of Medicare patient information exchanged between hospitals and providers to whom discharged patients are referred - a step that recent studies indicate only 20 percent of all hospital systems has taken.

ECIN, which generated estimated revenues of approximately $19 million in 2007, offers a Web-based software-as-a-service product that helps automate and streamline the care management process in hospitals, from admission through discharge. It has a client base of more than 400 hospitals and nearly 5,000 post-acute care facilities. When combined with Allscripts' Canopy care management solution, the company will have a footprint in nearly 700 hospitals nationwide, as well as a broad array of post-acute care facilities.

"Allscripts and ECIN provide a broad suite of solutions that will appeal to hospital executives, who are increasingly focused on creating a seamless connection to the ambulatory physicians who provide referrals, and to the post-acute care facilities that accept many of their patients," said Jeff Surges, ECIN's CEO, who will head Allscripts' new Hospital Solutions Group.

According to Allscripts, a 2006 study by Investor Group Services estimated that the market for care management and discharge planning software in hospitals considering automating those functions would generate between $300 million and $400 million in recurring fees.