Allscripts Healthcare Solutions has entered into a 10-year agreement with Affiliated Computer Services (ACS), a subsidiary of Xerox, to provide hosted IT services for healthcare providers using Allscripts' Sunrise Enterprise suite to support electronic health records (EHRs).

ACS will assist Allscripts in managing clinical and EHR technology applications for the Allscripts clients who use remote hosting services as part of their relationship with Allscripts. Other services include comprehensive data center and hosting operations spanning mainframe, server, storage, back up, recovery, network, and cross functional support.

"This is the first relationship of this scale and it speaks to increased interest from hospitals for ongoing application management solutions from a technology partner that has significant domain and applications expertise," Chad Harris, senior vice president and group president of Healthcare Provider Applications for ACS, said in an interview.

Harris also said more hospitals are turning to hosted patient record systems to keep it simple, while relying on vendors like ACS to help adapt to new regulations and new services. As ACS steadily builds its healthcare business, Harris said ACS and Allscripts are both committed to helping clients enhance the quality of care, increase patient access, and ultimately lower the cost.

"This relationship allows Allscripts to stay focused on developing new services to connect providers and patient information, while using ACS' expertise in healthcare application hosting to help providers operate more efficiently and deliver better patient care," Harris added.

As the payment paradigm in healthcare shifts and Allscripts' clients face growing and complex needs around new regulatory requirements, ACS will support Allscripts as it scales to deliver service levels required for diverse healthcare settings, according to Allscripts spokeswoman Catherine Riedel.

"Immediately ACS will begin to focus on standardizing and optimizing our operational processes, help to manage our service level agreements on system availability, and enhance our recovery and security capability," Riedel said. "This alliance also helps us deliver faster client case resolution. Longer-term it will enable us to deliver a richer toolset, broader set of monitoring capabilities, access to geographic data centers, and new services."

Riedel added that while the Allscripts alliance with ACS is the best system to meet current and projected needs, Allscripts is continuously evaluating options to provide the best service support for its growing and diverse customer base.

"Allscripts will still have a remote hosting business and will continue to manage all aspects of the alliance and client relationships. Data is always available whether it is remotely hosted or not," Riedel said.

Allscripts announced the agreement in its latest SEC filing, saying the deal was signed March 31. Allscripts said it will pay ACS approximately $50 million annually, but expects to generate savings that have been factored into its previously disclosed cost estimates of $25 million in 2011, $35 million in 2012, and $40 million in 2013. Allscripts also said it will maintain all customer relationships and domain expertise with respect to the hosted applications.

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