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Aetna to Buy Health Information Exchange Vendor Medicity

The $500 million acquisition is expected to close in 2011.

Hartford-based Aetna has agreed to acquire Medicity, a Salt Lake City-based vendor of health information exchange technology, for approximately $500 million.

“This acquisition will enable Aetna to offer a set of convenient, easy-to-access technology solutions for physicians, hospitals and other health care providers. That, in turn, can help improve the quality and efficiency of patient care,” Mark Bertolini, Aetna CEO and president, says in a statement. “Strategically, we believe this acquisition will enhance Aetna’s capabilities and accelerate our growth in the health information technology and health information exchange space.”

Medicity will operate as a separate business within Aetna under its existing leadership structure, which includes chairman and CEO James Lassetter, M.D.

Medicity offers communications tools to help health care providers get timely clinical information about patients, the company claims. Its install base includes 760 hospitals, 125,000 physician users and 250,000 end users, according to a statement.

Aite Group senior analyst Kunal Pandya expects to see more health carriers make moves to get into the health IT space, especially with an increased focus on electronic medical records looming on the horizon.

Getting into health information exchange systems "is a good play for a lot of carriers," Pundya says.

"It provides a value add and helps with contract negotiations," he continues. "It also provides some data to them — they have lot of data, but they can use some of this to reduce operational expenses."

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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