Healthcare IT Consulting Firm Acquisitions

We’ve written previously about the challenges to the healthcare IT and EHR consulting industry and also about areas of opportunity for healthcare IT consulting. I’m really interested to watch how this is going to evolve over the next couple of years.

The decline in EHR and healthcare IT consulting has been interesting since we can all be sure that IT is going to have a major future in healthcare. Of course, much of the EHR consulting industry was propped up by a false market thanks to $30 billion of EHR stimulus money. Now that the money is gone, we’re heading back to a more rationale (are we ever completely rationale?) industry. I’ll be interested to see what the rationale EHR and healthcare IT industry looks like.

One other trend I’ve seen happening is healthcare IT consulting companies being acquired. One of the first I saw was when Quintiles acquired Encore Health Resources. More recently CIPE was acquired by Cumberland Consulting Group. Right at HIMSS we got the news that KPMG had acquired Beacon Partners.

If you’re an EHR or healthcare IT consultant, these acquisitions usually aren’t too awful. Your work will be similar and it may even bring new opportunities to you. Over time, the culture shift might happen, but in the short term not much will change. Some of the EHR consulting company support staff might get left behind in the acquisition though.

I think we’ll still see a few more mergers and acquisitions in the healthcare IT and EHR consulting space. Although, then we’ll see the shift back again as some of the consultants leave the acquired company and start out on their own. Isn’t that the natural cycle of consulting companies?

About the author

John Lynn

John Lynn

John Lynn is the Founder of the HealthcareScene.com, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference, EXPO.health, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.

4 Comments

  • Hi John

    Great post! and Great insights!

    Also, Aspen Advisors was acquired by The Chartis Group.

    There are other transactions in the works right now. I thought that there would be at least a couple more announcements at HIMSS.

    My experience is that these acquisitions are not good for consultants of the firm that was acquired, especially if they liked the culture of the firm that they worked for. It is not especially good for those of the acquirer for other reasons.

    Additionally the long term success rate of #HealthIT acquisitions is dismal. Evidence: IBM/Healthlink, ACS/Superior, FCG/ISCG, CSC/FCG. The key rainmakers of each of the acquired left quickly and the culture left just as fast. Withiin 12 months, you could not recognize any significant evidence of the acquired in the new company.

    I hope the results are different this cycle, but don’t see signs that they will be.

    You are correct that the driver will be the lack of $$$ in the market after we (taxpayers) just spent $38B to install EHRs that barely inter-operate and that are now proposed to have only 1 user per providers… but those are two topics for other posts.

    Best regards!

  • I knew there were others I missed. Thanks for mentioning Aspen Advisors.

    I’ve always found consulting firms interesting as a company since your major asset is your people. I guess it’s also your connections to clients and potential clients. However, that’s often about people too. With that said, I’m amazed that any consulting companies are able to be successful and scale people. I guess it goes back to some people being great consultants, but not necessarily great business people. So, the cycles will continue.

  • …hold on gentlemen – I think the next big thing to happen in the EHR and healthcare It market is the pending billion dollar upgrade of the DOD EHR…not matter if its Epic/IBM (…I’m hoping its Epic/IBM) or Cerner)…this should put some excitement back into this industry and some create some great new consulting opportunities!

    Regards,
    Shirley

  • Shirley,
    The DOD EHR is going to definitely keep a lot of consulting companies in business. However, I think it will mostly be the rich getting richer as opposed to keeping some of the smaller EHR consulting companies in business. Of course, the contract is so large that the larger EHR consulting firms will have to sub some of the EHR consulting work to smaller companies or hire away the consultants from these smaller companies which fold. So, you’re right that it will be good for the consulting industry. Although, consulting on the DOD EHR project will be different than other EHR consulting projects.

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