Following the acquisition, Data Innovations will become a business division of Sunquest and the two companies will work to integrate their clinical laboratory information systems
There’s more change in the clinical laboratory marketplace. Yesterday it was announced that Data Innovations—a major player in medical laboratory middleware systems—had been acquired by Roper Industries, Inc. (NYSE:ROP), the owner of Sunquest Information Systems.
Executives at Roper Industries said that Data Innovations will become a business division of Sunquest. The acquisition is expected to close in February, subject to regulatory approvals. Roper also announced yesterday that it was acquiring SoftWriters, a company that sells software for long-term care pharmacies.
In its press release, Roper said that “the combined purchase price for these two acquisitions is $450 million. …The Company expects the three acquisitions to contribute approximately $100 million of annual revenue and provide over $110 million of gross cash tax benefits.”
Thousands of Medical Laboratories Use Data Innovation’s Systems
Thousands of clinical laboratories in the United States currently use middleware from Data Innovations. However, the CEOs of Sunquest and Data Innovations both tell Dark Daily that these lab customers will not see much change once the acquisition is completed.
“Data Innovations (DI) will be a business division of Sunquest,” stated Matthew Hawkins, CEO of Sunquest. “It will continue to operate under this name and will retain its identity in the market. Further, DI will continue to operate from its existing facilities in Burlington, Vermont.”
Multinational Market for Clinical Laboratory Middleware Products
Founded in 1989, Data Innovations focuses solely on data management for clinical laboratories and blood banks. It is the dominant player in this market niche. The company claims it has the world’s largest library of proprietary interfaces and drivers to connect more than 1,000 different types of lab instruments with laboratory information systems for more than 4,500 customers in 83 countries. Data Innovation maintains offices in Vermont, Florida, Belgium, Brazil, and Hong Kong.
By contrast, Sunquest says it has 1,700 medical laboratory customers that use its laboratory information system. Besides its headquarters in Tucson, Arizona, Sunquest maintains offices in the United Kingdom and India.
The CEOs of Sunquest and Data Innovations believe that the combination of the two companies will allow them to address one of healthcare’s biggest problems with information technology: the lack of connectivity among different software systems.
Connecting Medical Laboratory Analyzers, Automation, and LIS
“In recent decades, Data Innovations has developed products that allow diverse systems to connect to each other, particularly lab analyzers and lab automation systems,” noted Hawkins of Sunquest. “There is obvious synergy for Sunquest and DI to more effectively integrate their respective systems to the benefit of our laboratory and healthcare customers.”
“This is exactly what customers are telling us,” added Michael Epplen, CEO of Data Innovations. “Many IT systems were not designed to give much control and flexibility to the customer. Today, pathologists and lab managers want their informatics products to give them more control, along with the ability to easily customize their informatics systems on the fly to meet the changing needs of their laboratory operations.
Integration Is Important Trend in Clinical Lab Informatics
The observations of Hawkins and Epplen are consistent with one of the primary trends in laboratory informatics. That is the deeper integration of LIS and pathology LIS with the EHRs of hospitals, physicians, and other providers.
IT vendors recognize this trend. For example, in 2013 Cerner Corporation (NYSE: CERN) acquired Labotix, a laboratory automation company. Cerner announced at the time that it intended to fully integrate the operation of this laboratory automation product line with its LIS products. (See Dark Daily, “Cerner Corporation Enters the Clinical Laboratory Automation Market by Acquiring Labotix Automation Inc., March, 20, 2013.”
Even Data Innovations has taken steps to more fully integrate its systems and products. Last year it acquired Dawning Technologies of Fort Myers, Florida. Dawning was a competitor to DI in the laboratory middleware market. Data Innovations has integrated the Dawning systems with its middleware offerings and says it is preparing to launch a suite of products that will make it easier to connect physician office laboratories (POLs) and point-of-care (POC) testing devices with EHR systems.
Roper’s acquisition of Data Innovations is the latest evidence that healthcare IT vendors recognize the need to do two things that will eventually benefit clinical laboratories and pathology groups. First, these companies need to do a better job of integrating their information systems with other healthcare information systems. Second, they must understand that their medical laboratory customers want more control over the information systems they use in their labs. That means configuring information systems to make them easily customizable by lab customers.