SOURCE: Marlin & Associates

Marlin & Associates

November 10, 2010 06:00 ET

The Healthcare IT Market Will Soon Consolidate Into a Small Handful of Superstores -- Marlin & Associates Issues Market Commentary on Top Trends for Healthcare IT

Who Will Be the Bloomberg of Healthcare?

NEW YORK, NY--(Marketwire - November 10, 2010) -  The US Healthcare Information Technology market is in the early phases of a massive consolidation that will ultimately devolve into a handful of mega firms that form Healthcare IT superstores -- or "Healthcare Information Networks," according to a recent market commentary issued by Marlin & Associates, the boutique strategic and financial advisory firm specializing in the technology and healthcare industries. The comprehensive industry overview titled BACK TO THE FUTURE: HEALTHCARE REBOOTED offers five predictions on the future of healthcare IT.

Afsaneh Naimollah, co-author of the report and Partner at Marlin & Associates, explained that the predictions as well as the other findings were developed in part out of surveys that Marlin & Associates conducted throughout 2010. "The responses reveal that that the social and economic imperatives for a better healthcare system have never been so pronounced," said Naimollah. "Solving the cost of Healthcare from the fringes has never worked. Now, with the healthcare IT mandates in the federal healthcare reform bill, coupled with a stream of superior technologies, we are finally in a position for technology to have a measurable impact on the costs and the quality of care delivery." 

Marlin & Associate's market commentary notes that the confluence of technologies is at a pivotal point to enable radical changes at relatively reasonable costs. In addition to continuing advancement in the field of medicine, major breakthroughs in telecommunication, data management, infrastructure, and analytics technologies have laid the foundation for more innovative solutions for the industry.

The market commentary goes on to assert that, in the not too distant future, a few companies will emerge to lead the healthcare information industry much as Bloomberg and Thomson Reuters lead the financial information technology arena.

Marlin predicts that a few companies will successfully integrate the key components of a healthcare information network -- and thereby will be in a position to set industry standards. From that position, they will be positioned to provide comprehensive integrated information, analytics, communication, administrative, clinical and revenue cycle management tasks all via a seamless network, accessed through the web or dedicated terminals. Marlin envisions a future in which providers, payers and patients will be able to conduct the majority of their healthcare business through these integrated, seamless, real-time Healthcare Information Networks.

The market commentary goes on to make five other specific predictions including prediction of a quickening pace of M&A between administrative (payer and provider sides), revenue cycle management, and analytics businesses. The report also argues that the payers will take a more active part in individualizing medicine in order to avoid becoming commoditized.

"Payers have to invent new products and pricing such as pay for performance with providers or behavioral based premiums for the consumers," said Naimollah. "It is the only way that they can stave off the commoditization train."

Another of Marlin's predictions relates to an increasing trend towards outsourcing, which the Report says will lead to the creation of a new breed of BPO companies that will focus on managing the information flow in many of the HIEs (Health Information Exchanges).

The commentary notes several companies that may be looking to build the next generation Healthcare Information Network including incumbents in the healthcare IT industry such as Ingenix (a wholly-owned subsidiary of UnitedHealth Group (NYSE: UNH)), to telecommunication or large technology companies like Verizon (NYSE: VZ), AT&T (NYSE: ATT) or Microsoft (NASDAQ: MSFT) and IBM (NYSE: IBM).

According to Naimollah, "These companies all have pieces of the puzzle. The question is: Which firm will be first to assemble a truly comprehensive information and transactional healthcare platform? You need vision, money and the right leadership to get there, not a small task if you are creating a comprehensive healthcare platform."

The report notes that government standards have been helpful, but ultimately the private sector will set the standards for the industry; just as Microsoft and Intel set technology standards in the 1980s.

To access the market commentary, please go to http://www.marlinllc.com/_media/newsletter/Next-Gen-HINs-Nov-2010.pdf

About Marlin and Associates
Marlin & Associates Holding LLC, the author of this Report, is a boutique financial and strategic advisory firm specializing in acquisitions and divestitures of U.S. and international firms that provide technology, digital information and healthcare-related products, technology and services. The firm is based in New York City with offices in Washington, DC and Toronto, Canada. Marlin & Associates Securities LLC, a wholly-owned subsidiary of Marlin & Associates Holding LLC, is a broker-dealer registered with the Securities and Exchange Commission and is a FINRA/SIPC member firm (www.finra.org). Investment banking and/or securities are offered through Marlin & Associates Securities LLC.

M&A's professionals have advised on more than 200 successfully completed transactions. The firm is the recipient of numerous awards, including "Middle Market Investment Banking Firm of the Year(1)," "Middle Market Financing Agent of the Year - Equity1" and numerous "Deal-of-the-Year(2)" awards.

(1) M&A Advisor. Sept 2010 "2007 Middle-Market Awards" http://www.maadvisor.com/page/2007-ma-awards

(2) M&A Advisor. Sept 2010 "2010 Middle-Market Awards" http://www.maadvisor.net/conferences/MMF_2010/2010_MMF_Winners_PR.pdf

The Marlin and Associates and "M&A" logo are registered trademarks of Marlin & Associates. The M&A Healthcare Information Network is copyright by Marlin & Associates and may be reproduced only with attribution. 

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