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Quality Systems Inc. (QSII - Analyst Report) revealed that it has acquired Costa Mesa-Calif. Based health information technology (“HIT”) company Mirth Corporation to improve its enterprise interoperability solutions services and expand its collaborative care, population health, disease management and clinical data exchange offerings.

Mirth’s solutions play a leading role in harmonization of data across vendor platforms and the community. As a result, the acquisition will help QSII’s clients integrate real-time, longitudinal health information from electronic health record (EHR) systems at different hospitals, physicians and ancillary care providers and drive workflows, standards-based data exchange, and analytics.

Despite the acquisition, Quality Systems will leverage Mirth’s brand name by keeping its identity, office, team, and products. QSII will also continue to market Mirth’s commercial solutions and act as the hub for the Mirth Connect open-source community.

In addition, Quality Systems plans to integrate Mirth’s capabilities into its NextGen Healthcare platform. Post-acquisition, NextGen Healthcare will be able to offer Mirth-powered HIT solutions to its clients with improved data exchange capabilities, enabling better participation in local, state and federal eHealth initiatives.

Recently, NextGen Healthcare Information Systems, LLC, a subsidiary of QSII, hit the headlines by presenting a clinical decision support (CDS) tool that will help healthcare providers achieve evidence-based clinical knowledge much more easily. NextGen’s client Willamette Valley Providers (WVP) has agreed to take the program live with a commercial EHR.

The story to develop the CDS tool began in 2008 when Brigham and Women’s Hospital (BWH) founded the Clinical Decision Support Consortium (CDSC). Its members include leading healthcare providers and EHR vendors, including NextGen Healthcare, aimed at developing, implementing and evaluating methods for incorporating CDS into the healthcare system.

Quality Systems reported first-quarter fiscal 2014 (ended Jun 30) earnings per share of 22 cents, down 15.4% year over year. However, earnings were in line with the Zacks Consensus Estimate. Net income declined 16.8% in the quarter to $12.9 million. Revenues decreased 7% year over year to $109.5 million in the first quarter. The company’s revenues also missed the Zacks Consensus Estimate of $116 million.

Currently, QSII carries a Zacks Rank #3 (Hold). While we remain on the sidelines about the stock, medical information services providers including Medidata Solutions (MDSO - Snapshot Report) and Streamline Health Solutions, Inc. (STRM - Snapshot Report), both carrying a Zacks Rank #2 (Buy), as well as Alere Inc. (ALR - Snapshot Report) in the medical products industry with a Zacks Rank #1 (Strong Buy) are worth a look.

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