Medic Computer Systems is no more, but in its place is a new, larger company with greater revenues, more resources, and a plan to become a bigger player in the growing health-care information technology business.

The new company, Misys Healthcare Systems, merges Medic and two other companies already owned by parent company Misys Group of Companies. And one executive describes the new venture as a “market maker.”

“The formation of Misys Healthcare Systems provides us the opportunity to grow stronger,” says Keith Gsell, vice president of human resources for the new entity. “Unifying the three companies gives us significant strength to capture market share and be a dominant player in the health care IT space. —

“The formation of the company puts us in a position to be a market maker,” he adds. “Our products provide the opportunity for doctors to dedicate more time to patients and that is what our systems provide.”

Misys is a result of the convergence of three companies that were already owned by Misys: Medic Computer Systems, Sunquest Information Systems of Tucson, Ariz., and Home Care Information Systems (HCIS) of Tinton Falls, N.J. The headquarters for the new company will be in Raleigh.

The merger puts Misys Healthcare Systems among the health care information technology’s top five in revenue, Misys says. Together, 2001 revenues for the three companies are nearly $400 million. Medic reported revenues of $272 million last year, or more than one-third the parent company’s revenues.

Misys believes the conglomeration will be in a better position to compete with other industry giants, including IDX Systems Corporation, WebMD, and Siemens Health Services. Medic Computer Systems, which owned a 12 percent market share in the practice management sector, ranked roughly 13th in the competitive health care information technology space.

Positioned to capture market share

Under its new structure, Misys Healthcare Systems contends it can develop and service products to meet information technology needs in every health care category from small group physician practices to large hospitals and home care.

“While Misys Healthcare Systems is an exciting and major new company in the marketplace, our philosophy will not change,” says Tom Skelton, chief executive officer for Misys. Skelton was CEO of Medic Computer Systems. “Our three business units will continue to deliver the solutions and services that our customers have come to expect — those that free health care practitioners to focus on their patients’ health, not their IT systems.”

The Misys Healthcare Systems business model is designed to service each of the three old company’s core targets: physician systems, hospital systems and homecare systems.

Sunquest Information Systems, acquired by Misys in late 2001, was the dominant player in the hospital laboratory sector with 24 percent market share. Further, HCIS managed five percent of the home health market and came under the Misys umbrella in 1997.

The company will benefit from increased financial stability and cost efficiencies in sharing research and development investments, according to Misys’s Christa Miller, public relations specialist. She confirms that this wouldn’t be the end of the company’s acquisition strategy, but offers no speculation about additional growth.

The new Misys will touch a customer base of 85,000 physicians, 1,200 hospitals, 850 home care providers and hundreds of laboratories, clinics, and managed services organizations.

According to Gsell, the health care information technology industry did not experience the slow-downs numerous other companies have faced over the past year, specifically following the September 11 terror attacks.

Of the 1,500 Medic employees nationwide, roughly 625 work in Raleigh. Even prior to the announcement, Medic had been in growth mode — hiring164 new employees since last March.

Gsell says that Misys Healthcare Systems will expand its work force between eight to10 percent over the next year, primarily in Raleigh but with some hires expected in each of their nine satellite locations. Positions are to be added for customer service and field support, sales and engineering.

Misys faces growing competition

The moves made by Misys also reflect changes taking place elsewhere.

“The IT health care industry is dynamic and ever changing,” says Vincent J. Hudson, an industry analyst and editor of the Physician Office Management/Medical Information Systems (POMIS) report. “Competition is very tight and growth in information technology management systems has been relatively flat; however vendor acquisitions are continuing to run rampant.”

The health care information technology space is diverse and includes hundreds of small companies, though the numbers are going down, he says. In 1999, there were approximately 1,443 health care information technology vendors across seven defined industry sectors. Today, there are less than 1,000. The industry is estimated at about $8 billion a year, according to experts.

As health care professionals are looking for vendors to deliver their billing or electronic medical records needs, Hudson says, they make decisions based on four criteria.

“Functionality, application implementation, customer support and stability are the key areas which purchasers are evaluating,” Hudson explains. “This is important to understand because doctors must be sure a vendor has the resources to survive and maintain its business operation, as well as the financial backing for research and development of new applications.”

“The formation of the company puts us in a position to be a market maker,” says Gsell. “Our products provide the opportunity for doctors to dedicate more time to patients and that is what our systems provide.”

Hudson forecasts market increases, conservatively, at five percent within the next two years. Some of the increases will be driven from providers adhering to requirements from the federal Health Insurance Portability and Accountability Act of 1996, better known as HIPAA. HIPAA requires medical information to be managed, reported and stored in a uniform way.

The Raleigh office of Brodeur Worldwide will handle the new company’s public relations efforts. Advertising will be created by another local shop, Rockett, Burkhead and Winslow.

Medic Computer Systems was founded in 1982 and sold in 1997 to London-based Misys for a reported $923 million. Misys Healthcare Systems is a member of the Misys Group of Companies. Misys started as a computer systems supplier in 1979 for insurance brokers and now employs more than 6,500 people worldwide. The company describes itself as one of the world’s 10 largest “independent software vendors” with $762 million in revenues.