Allscripts buys McKesson’s US electronic health records business

US clinical information systems suppliers Allscripts is to buy McKesson’s US hospital information systems business in a £142 million ($185 million) deal.

In an all-cash deal Allscripts will acquire McKesson’s Enterprise Information Solutions, including its EHR, Paragon, and its revenue cycle, lab analytics and content-management solutions.

McKesson’s Horizon EHR for larger hospitals is said to be at the end of its lifecycle.

Allscripts chief executive Paul Black said, the deal will bring approximately 200 new clients to the EHR vendor.

When the deal closes he combination of Paragon and Allscripts Sunrise EHR products will double the number of hospital clients the company has in the United States.

McKesson’s Paragon EHR will be directed at the small-hospital market, while Allscripts’ Sunrise EHR will continue to be directed at larger hospitals.

However, Allscripts will still be dwarfed by the increasingly dominant duopoly of Epic and Cerner in the large hospitals sector, which between them have been winning almost all new contracts.

The news marks the end of McKesson as a major player in the US clinical information systems market.  The company had once been a dominant player in the NHS IT market, but failed to get selected as a supplier under the NHS National Programme for IT, beginning 2003

McKesson’s UK hospital clinical systems business was sold to private equity firm Symphony technology group in June 2014, subsequently re-branded as System C.

In March, McKesson completed a merger agreement that combined the majority of McKesson Technology Solutions, including radiology information systems, with revenue cycle vendor Change Healthcare’s.

With the sale of its remaining health IT business McKesson will focus on its primary business in the field of wholesale drugs distribution.