New Buy-out Players; Impact???
What I find most interesting is the new buyers comming into the HIS market.
Last several buy-outs were by Private Equity(PE) / Venture capital players, not HIS vendors (except Qmed deal).
PE players (as seen in comercial industry) buy low performing assets, then turn them over in a few years. They are high risk players, looking for high return investments with short horizons (2-5 years). When an asset is under performing you pump up profits by either increasing revenues and/or reducing costs. Since in the HIS world it takes over a year to get a large contract - (hospitals are not known for fast decision making!) the quickest thing you can do to pump up and asset value (profitability) is cut costs - usually marketing, support and R&D get cut first.
As the large HIS companies sit by the sidelines the HIS world will be in turmoil as more PE's enter the market. Fasten your seat belt!
Last edited by HISjunkie : 07-23-2007 at 11:21 AM.
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