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Allscripts Healthcare Solutions (MDRX - Analyst Report), a leading player in the health care information technology (HCIT) market, recently revealed that it has taken over Jardogs LLC, a provider of patient engagement offering and dbMotion Ltd., a provider of community-based healthcare offerings. Both entities are privately held. 

Jardogs provides a cloud-oriented patient engagement know how which facilitates team building among patients, doctors and others. The Jardogs FollowMyHealth patient engagement system permits patients to proactively manage their care and empowers buyers to gauge their health condition. 

dbMotion had a strategic relationship with Allscripts since 2009. Allscripts is the biggest user of dbMotion know how. About 370 inpatient centers and 2,800 freestanding clinics use dbMotion know how. dbMotion makes available a system for population health management as well as healthcare coordination and utilizes data from disparate sources to create a record for patients. 

The health care information technology market is competitive and price sensitive. Among others, Allscripts faces strong competition from Cerner Corporation (CERN - Analyst Report), Quality Systems (QSII - Analyst Report) and Athenahealth (ATHN - Analyst Report).

However, optimism about the growth prospects of select HCIT service providers remains favorable under the Obama administration, which passed a Stimulus package in May 2009. The Stimulus package was aimed at increasing the use of electronic health record (EHR) systems by medical practitioners. While greenfield opportunities are shrinking, the replacement market is growing.

We are of the opinion that acute and ambulatory care will continue to converge in future. Also, that Allscripts is positioned to provide integrated clinical applications for health care providers to satisfy HITECH Act requirements and eventually comply with an outcomes-based reimbursement system.

As a potential takeover target, Allscripts presents a lucrative opportunity for firms seeking entry into the HCIT industry. It has a wide user base and enjoys many opportunities vis-à-vis its peers. Its mergers with Misys and Eclipsys have expanded opportunities and reach in practice management (PM) and EHR markets substantially and increased cross-selling opportunities. We believe that Allscripts is well positioned in the fast growing business of selling EHR to physician practices as well as inpatient settings. The stock carries a Zacks Rank #4 (Sell).

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