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IBM Acquires Health-Care Services Vendor

IBM buys Healthlink, which provides a range of business and IT services to large health-care organizations.

Paul McDougall

April 26, 2005

1 Min Read

In keeping with CEO Sam Palmisano's strategy of bolstering his company's business-services offerings, IBM said Tuesday that it has acquired Healthlink Inc., a health-care-industry services provider. IBM didn't disclose terms of the deal, the closing of which remains subject to federal regulatory approvals.

Healthlink provides a range of business and IT services to large health-care organizations, including Catholic Healthcare West and Sutter Health. Among other things, Healthlink offers IT strategic planning, system implementation, and compliance services for health-care providers.

The acquisition of Healthlink will boost IBM's ability to offer a broad range of services to the health-care industry, an increasingly important market for the company, IBM officials say. "Health-care organizations need a lot of help with improving quality and productivity while controlling costs, so IT has a big role to play," says Neil de Crescenzo, health-care industry leader within IBM Business Consulting. Most health-care organizations operate with profit margins as low as 2%, de Crescenzo says. "There is a lot of room to add efficiencies and optimize operations," he says.

Once the deal closes, more than 600 Healthlink employees will transfer to IBM, including a number of consultants in fields such as clinical financial-system implementation, patient-data management, and clinical-process optimization.

Under Palmisano, IBM has acquired a number of business-services companies, including Liberty Insurance Services and procurement specialist KeyMRO. The moves are intended to bolster IBM's share of the red-hot business-process-outsourcing market while offsetting the company's dependence on commodity hardware and slow-growing software sales.

About the Author(s)

Paul McDougall

Editor At Large, InformationWeek

Paul McDougall is a former editor for InformationWeek.

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