- Allscripts recently acquired NantHealth’s patient engagement assets following the release of the latter's second quarter financial results showing $70 million in losses.
In addition to signing the agreement with Allscripts to sell its patient engagement assets, NantHealth also terminated 300 employees.
NantHealth CEO and Chairman Soon-Shiong, MD, stated the deal with Allscripts and subsequent lay-offs are part of an effort to maintain a focus on improving the health IT company’s artificial intelligence (AI) and cancer solutions.
According to the report, NantHealth’s move to sell its patient-provider portal to Allscripts will reduce operating costs and make up for the $70 million in losses accrued over Q2.
Despite these losses, NantHealth stated it intends to grow its sales team, dip into international markets, and devote resources toward growing its cancer solution.
“We remain focused on extending coverage and driving physician engagement for our GPS Cancer solution around the world,” said Soon-Shiong. “We strongly believe that GPS will result in extended and improved quality of life.”
To purchase the provider and patient engagement assets, Allscripts used 15 million in NantHealth shares.
The decision to purchase NantHealth’s assets in an all-stock deal fulfills an agreement in 2015 in which Allscripts purchased a 10-percent stake in NantHealth for $200 million.
The health IT company took the $200-million equity position in NantHealth two years ago as part of a larger effort to leverage NantHealth’s cloud-based health IT by incorporating genomic information directly into Allscripts EHR technology.
At the time, CEO and President Paul Black, MBA, emphasized the deal as a big step toward spurring meaningful advancements in precision medicine.
"The DNA of our corporation has always been we're going to do things in an open architecture framework, and that's been how we have thought and built solutions," he told EHRIntelligence.com during a user conference at the time.
Heavily investing in precision medicine and infrastructure to support its development was a motion by Allscripts to adapt to the changing priorities and innovations of the health IT environment.
"This is not a bet-the-company strategy," Black had said. "It is extraordinarily important, very strategic to us but it wasn't like we've gone so far off the edge that we have bet the entire future of Allscripts on this topic. Without having a precision medicine platform, however, you fundamentally bet the company over the long term, meaning you're not really going to be relevant in the future dialogue about how healthcare is going to be treated."
Allscripts also recently acquired McKesson’s hospital and health system health IT business in a sale signaling growing challenges for inpatient technology developers.
The $185 million deal for McKesson’s inpatient health IT division, Enterprise Information Solutions, marked the end of McKesson’s run as a technology provider.
“This strategic acquisition further advances Allscripts strategy to offer the most comprehensive, high performing health information technology and solutions,” stated the two companies in a joint statement. “Upon close, McKesson will have furthered its focus as a global leader in healthcare supply chain management solutions.”
The purchase appears to be an attempt by Allscripts to improve its presence in the inpatient EHR market considering an earnings call by Paul Black on the same day as the McKesson acquisition announcement.
During the call, Black emphasized that acquiring McKesson’s hospital and health system business adds hundreds of new community hospital and IDN clients to the Allscripts client base.
These recent acquisitions by Allscripts further expand the health IT company’s portfolio of EHR offerings and solutions.