ICT for Recovery

IBM strengthens healthcare data management pitch

Posted by admin on Thu, 04/02/2010 - 12:20
Printer friendly
stethoscope.jpg

IBM has announced it's to acquire Initiate Systems, a provider of data integrity software for information sharing among healthcare and government organizations. The company is based in Chicago, and marks the 30th acquisition IBM has made to advance its capabilities in information and analytics. Financial details were not disclosed.

Initiate's software helps healthcare clients work more intelligently and efficiently with timely access to patient and clinical data. It also enables governments to share information across multiple agencies to better serve citizens.

"With the addition of Initiate's software and its industry expertise, IBM will offer clients a comprehensive solution for delivering the information they need to improve the well-being of patients at a lower cost," said Arvind Krishna, general manager, Information Management, IBM. "Similarly, our government clients will now have even more capabilities for gathering and making use of information to serve citizens in a timely and efficient manner."

Initiate's healthcare clients include payers and providers as well as retailers selling prescription drugs. Among these clients are Alberta Ministry of Health and Wellness, BMI Healthcare (UK), Calgary Health Region, CVS/Caremark, Humana, Ochsner Health System, the State of North Dakota's Department of Health and Human Services and the University of Pittsburgh Medical Centre.

The company's technology is also widely used to help government agencies of all sizes use information to boost efficiency. In combination with IBM InfoSphere software, Initiate software will expand capabilities for information governance and help agencies gain a single view of relevant information to better serve citizens.

"Our clients will be the ones who benefit most from this acquisition," said Bill Conroy, president and chief executive officer, Initiate Systems. "They will continue to get the software and expertise they depend on, plus the incalculable advantage they will gain through IBM's global reach and its capabilities in enterprise software, hardware and services."

Consistent with the company's strategy, IBM will continue to support and enhance Initiate's technologies while helping clients take advantage of the broader IBM portfolio. Customers will benefit from additional information management capabilities including: clinical analytics, information discovery and transformation and data warehousing and business intelligence.

IBM's acquisition of Initiate extends the company's business analytics strategy, including the range of offerings available through IBM's recently-announced Business Analytics and Optimization Consulting organization which includes a team of 4,000 consultants, a network of analytics solution centres, and is backed by an overall investment of more than $10 billion in organic growth and acquisitions.

Diagnosis: excellent

It's an excellent and timely move according to research firm Ovum.  "The US government's Health Information Technology for Economic and Clinical Health Act (HITECH), with its $36 billion stimulus for the healthcare sector in general and the adoption of electronic health records and health information networks in particular, is too good an opportunity to be missed," noted Cornelia Wels-Maug. "At the core of the HITECH legislation lies  'information exchange for care coordination', an area that forms the heart of Initiate's solution.

"Hence, IBM's latest acquisition - which is its tenth in the Master Data Management (MDM) space since October 2003 - should catapult it into a position to secure a good chunk of this stimulus money and the burgeoning potential in other geographical markets. By creating a composite view of a patient or provider, this move has the potential to significantly improve the sharing of information across multiple agencies, increasing operational efficiency and improving patient outcomes due to better quality of care.

"Initiate brings strong assets into this marriage. It has a proven customer integration platform - it claims to have the largest number of productive, live customers, 100 of its estimated 200 customers. Furthermore, the vendor has a well-established presence in the healthcare and public sector. Initiate serves more than 2,400 healthcare sites and 40 health information exchanges (HIEs), although the company has also expanded into other verticals such as financial services, high-tech, manufacturing and retail."

But while it looks like good news for IBM, there are potential issues. "In order to take advantage of those synergies, extensive systems integration work with IBM products is often required, which comes at a heavy price," warned Wels-Maug. "It is unknown how willing the market will be to pay to integrate its core systems to IBM's InfoSphere products. With its strong global presence, IBM can also take Initiate's technology into new markets and provide services around it in as yet untapped markets. Being acquired by a large player such as IBM also raises the question of whether Initiate will be able to unfold its potential under the large IBM umbrella, or whether it will wither and sink into oblivion alongside the multitude of applications in IBM's broad portfolio. This will be a test of how well IBM integrates small but high-performing companies."

The transaction is subject to customary closing conditions and regulatory clearance and is expected to close in the first quarter of 2010. IBM intends to integrate the Initiate organization with its Information Management business after the closing.