Aetna to purchase health IT company
■ The insurer will pay $500 million for Medicity, which specializes in medical data exchange.
By Emily Berry — Posted Dec. 21, 2010
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Aetna announced Dec. 7 that it will buy Medicity, a health care information technology company that specializes in facilitating the exchange of medical data among physicians, hospitals and patients.
The Salt Lake City-based Medicity sells iNexx, a physician electronic medical records system, and Novo Grid, a health information exchange platform. The company claims 125,000 physician users and 760 connected hospitals
Aetna, based in Hartford, Conn., will pay $500 million for Medicity, which both parties said will continue to operate as a separate entity.
"This acquisition will enable Aetna to offer a set of convenient, easy-to-access technology solutions for physicians, hospitals and other health care providers," Aetna CEO Mark Bertolini said in a company statement. "That, in turn, can help improve the quality and efficiency of patient care."
In a letter to customers posted on its website, Medicity CEO J. Kipp Lassetter, MD, said Medicity customers will gain "robust analytics and decision support" because of Aetna's capabilities, and that Medicity would have "more resources to back us up."
The deal was the second merger in a year between a major health plan and an EMR company. UnitedHealth Group's Ingenix subsidiary bought Medicity competitor Axolotl in 2010.
Separately, Aetna announced Dec. 3 that its board had authorized $750 million more in share repurchases, in addition to the $257 million authorized and not yet executed. During the first nine months of the year, Aetna spent $1 billion to buy back 33 million shares of its stock, according to filings with the Securities and Exchange Commission.
The company has been among the most active in share buybacks, but hardly alone among health plans in using repurchases to boost their stock prices and signal confidence in their companies.