(MDRX) Allscripts Healthcare Solutions Inks Reselling Pact

Electronic health record (“EHR”) services provider Allscripts Healthcare Solutions (MDRX) has forged a reselling deal with Georgia-based cloud-based messaging services and e-commerce solutions provider EasyLink Services International Corporation (ESIC).

Under the deal, Allscripts will resell EasyLink’s hosted inbound fax services as an effective, secure and reliable alternative to fax machines and fax servers. Allscripts’ customers can now receive secure inbound faxes through the company’s automated homecare software application with EasyLink’s cloud-based fax solution.

Allscripts is among the leading players in the health care information technology (“HCIT”) market. The company offers an integrated platform of services to facilitate enhanced exchange of critical patient information.

Allscripts recently introduced a cloud-based outsourced business office solution, dubbed Allscripts RCM Services, for physician practices at the Healthcare Financial Management Association (“HFMA”) national conference in Orlando, Florida. The service, which requires no new hardware or up-front costs, manages medical billing, coding, claims, patient payment, clearinghouse suite and collections.

The HCIT market is competitive and price sensitive. Among others, Allscripts faces strong competition from Cerner Corp. (CERN), Quality Systems (QSII) and Athenahealth (ATHN) in this market.

However, optimism about the growth prospects of select HCIT service providers is high under the Obama Administration, which passed the Stimulus package in May 2009, aimed at increasing the use of EHR systems by medical practitioners.

Allscripts has widened its user base and increased cross-selling opportunities following its merger with Misys and Eclipsys.  We believe that the company is well positioned in the fast-growing business of selling EHR to physician practices and other ambulatory care settings.

The acquisition of Eclipsys provided the company with an acute care product for sale in concert with its ambulatory services. We are of the opinion that acute and ambulatory care will continue to converge in future and that Allscripts is well positioned to provide integrated clinical applications that will permit health care providers to satisfy HITECH Act requirements and eventually comply with an outcome-based reimbursement system.

On the other hand, we are concerned about the intensity of competition, price elasticity, volatility in bookings and the extent of the company’s ability to absorb large acquisitions. Currently, we are neutral on Allscripts.

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