Allscripts-Misys Healthcare Solutions Inc. (MDRX) recently entered into a new agreement with CVS Caremark Corporation (CVS) whereby the latter will stop offering its iScribe prescription software, switching all its customers to Allscripts’ e-prescribing software instead. Financial terms of the agreement have not been disclosed.
We think that the new agreement will substantially boost Allscripts’ top-line by expanding its client base. E-prescribing is a form of electronic health record (EHR) system that enables physicians to send prescriptions directly to a pharmacy by e-mail. It has been seen that the effective use of EHR systems reduces medical errors, enhances clinical quality and leads to better patient outcomes by accessing patient records in real time.
The U.S. government is increasingly emphasizing the use of EHR systems these days, as evident from the Medicare Improvements for Patients and Providers Act of 2008. The Act, for the first time ever, provides financial incentives to physicians who adopt e-prescribing. This requires adoption by 2011 and delays any reduction in fees for treating medicare patients.
Libertyville, Illinois-based Allscripts Healthcare Solutions Inc. is a leading provider of clinical software and information solutions meant for physicians. In October 2008, the company merged with Misys Plc − a global applications software and services company − to form the Allscripts−Misys Healthcare Solutions Inc.
Allscripts faces strong competition from Cerner Corporation (CERN), Quality Systems Inc. (QSII) and MedAssets Inc. (MDAS). Presently, we have a “Neutral” rating on Allscripts.
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