ADP To Acquire AdvancedMD

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Automatic Data Processing (ADP), a provider of human resource, payroll, and benefits administration services, announced Tuesday that it will acquire AdvancedMD, a privately held provider of practice management (PM) and electronic health record (EHR) solutions targeting small and midsized medical practices. Terms of the transaction were not disclosed.

AdvancedMD executives say ADP will help market their products to small and midsized businesses (SMBs) in healthcare. ADP's Small Business Services segment provides an array of integrated HR, payroll, and benefits outsourcing services to more than 45,000 physicians in approximately 13,500 SMB medical practices. Currently, AdvancedMD's cloud-based solutions are used by more than 10,000 physicians in 4,100 practices and by more than 300 regional billing partners across the United States.

"AdvancedMD is a highly strategic fit with ADP and will enhance our offerings to small and medium-sized medical clients," Eric Morgan, president and CEO of AdvancedMD, told InformationWeek in an interview.

Morgan also said ADP plans to integrate AdvancedMD with ADP's Employer Services business segment. The business will become known as ADP AdvancedMD and Morgan will assume the title of president of ADP AdvancedMD.

"ADP is eager to leverage AdvancedMD's industry knowledge and expertise as we enter the PM and EHR market," Morgan said. "By leveraging the collective offer of AdvancedMD's PM and EHR solutions, and combining that with ADP's myriad of services and long-standing history of serving medical professionals, ADP is now uniquely positioned as an integrated, single-source provider for medical practice optimization that can capture significant growth opportunities in the burgeoning healthcare technology and services segment."

Morgan also said AdvancedMD was growing aggressively and profitably and that its 2011 business plan was fully funded. "The resources of ADP will allow the new ADP AdvancedMD to grow much faster than the steep growth trajectory we were already on," Morgan said.

Jan Siegmund, ADP's chief strategy officer, said in a statement that AdvancedMD has a trusted brand, best-in-class solutions, and experienced management team.

"A partnership with ADP means that physicians can dedicate themselves to what they care about most -- patient care -- while letting ADP take care of the rest," Siegmund said. "With our newly combined team, ADP and AdvancedMD will compete effectively for the small and mid-sized physician practice market, which is going through a rapid technology adoption cycle and moving aggressively toward outsourced solutions -- clearly ADP's strength."

ADP said the combination of both companies' technologies creates immediate benefits for customers at a time when emerging technology standards, coupled with incentives related to the Health Information Technology for Economic and Clinical Health (HITECH) Act enacted as part of the American Recovery and Reinvestment Act (ARRA) of 2009, are spurring medical practices to evaluate and adopt EHR systems.

ADP AdvancedMD will also target the long-term growth prospects of physicians seeking cloud computing-based solutions for the clinical and administrative aspects of their practices.