Systematics Information Services Inc. has acquired a medical information processing firm to add to its growing health care services business.
The Little Rock-based banking services and software vendor bought Medical Data Technology, a small privately held company in Roseland, N.J., that provides outsourcing to 14 hospitals in the Northeast. Financial terms were not disclosed.
In stepping up its efforts in health care servicing, Systematics is putting itself more directly in contention with its traditional banking industry competitors, as well as some new rivals, for this increasingly popular market segment. With all the buzz surrounding health care, banks and other related companies are hoping to apply their own systems and software to this business -- affording them ample opportunities to leverage their technology as the financial industry matures.
Systematics -- which itself was acquired a few months ago by Alltel Corp. telecommunications company -- has been slowly building up its health care servicing unit for more than two years now. With two other major health-care-related businesses under its belt, Systematics has been marking out a clear niche for itself in information servicing for hospitals, nursing homes, and other health care providers.
In actively pursuing services for this industry, Systematics has joined the ranks of many other financial industry servicers and banks themselves -- including Equifax Inc., Card Establishment Services Inc., and Banc One Corp. -- which seem to view health care as a ripe market for their own systems and software.
In fact, health care is among the the three top "strategic business areas" -- in addition to financial services and telecommunications -- that are expected to see the greatest growth over the next five years, according to Michael E. M9ntgomery, the. president of the health care services unit for Systematics.
But whereas many of the financial industry companies that have approached this segment have looked purely -- or primarily -- at handling health care payments, Mr. Montgomery claims that Systematics has taken a broader outlook, focusing on outsourcing and software.
"They [competitors] are offering remote services or tightly. wound software... canned systems," Mr. Montgomery said. "There are a couple of major competitors that focus on certain areas, but no one offers an enterprise solution."
Systematics began its health care initiative in July 1992 with the purchase of Beverley Enterprises, "a classical outsourcing and data processing" outfit that serviced nursing homes and other long-term health care providers.
It built on this base a year ago with the acquisition of TDS Health Care Systems, which supplies core recording software for mainframes. TDS already had a solid customer base, which ironically included Medical Data Technology, Systematics' most recent addition to health care services.
"The acquisition of Medical Data Technology adds another key piece to Systematics' 'total solution' outsourcing strategy in health care," Mr. Montgomery said. "The combination of Systematics' outsourcing expertise and Medical Data's successful health care remote processing model will only further our ability to outsource TDS software."
Medical Data Technology will retain its current leadership. John Depierro will continue as the company's president, reporting to Mr. Montgomery. Mr. Montgomery added that Medical Data will be able to offer some valued operational experience, both in the business of outsourcing and as a user of Systematics' TDS software. For Systematics, the route to success in health care appears to be clearly mapped out. "Payment processing may go away," Mr. Montgomery said. "But health care needs information systems, which are 10 years behind banks."