GE Buys IDX for $1.2 Billion

GE Healthcare will acquire HIT vendor IDX for $1.2 billion, it was announced minutes ago. Thanks for those who tipped me off to the news. More to follow.

Update: the conference call just ended. IDX says that "some months ago" it realized it couldn't scale to meet the available opportunities and looked extensively for a partner. IDX states that the product lines of the two companies fit "hand in glove." They think the UK relationship will be enhanced because GE Healthcare is headquartered in the UK. They will live up to the Allscripts agreement, which is a ten-year strategic alliance in which IDX markets the Allscripts product and Allscripts markets the IDX practice management product. GE will not be able to sell their product in an IDX account for which IDX was obligated to bring in Allscripts, so that's still an exclusive deal.

Synergies seen: (1) revenue cycle for physician offices; (2) GE lacks a core CDR; (3) workflow in radiology that links to GE PACS. They admit some conflict with their ten-year agreement with Philips-Stentor and GE PACS. The CDR (CareCast) application was barely mentioned.

IDX has met the provisions of their British Telecom agreement and NHS on the change of control. They would not comment on UK product milestones, since that's the purview of NHS. The acquisition is not a "defensive move" to the success of iSoft and other vendors in Asia and elsewhere.

How was the negotiation positioned considering GE's commercialization agreement with Intermountain? IDX would not comment, but stands by the statement that it will be good for current IDX customers.

Will the IDX executives stay on with GE? That will be determined, but GE understands that the business didn't grow by itself and that intellectual capital exists in the employee base, including management.

My impressions: was the "months ago" decision point due to being dismissed from the UK or at least anticipating it? (almost at the same point during the February conference call in which IDX admitted that it had no CareCast sales over several months.)  Does GE really think that highly of CareCast, or is it primarily interested in the PACS and physician office opportunities? GE's core systems are notoriously weak, but CareCast has quirks that may make it a hard sell, even for GE. My overall conclusion: GE acquires yet another HIT company with mediocre products that add to the mishmash of technologies it already owns, perhaps with less interest in CareCast than us hospital IT types might assume. Can they increase sales simply because they're a conglomerated GE Healthcare? Maybe. If you work for IDX or GE, tell me what you think.