Concerning the GE purchase of IDX

GE
Healthcare
recently announced that it had purchased IDX,
a supplier of healthcare information systems. On the surface this acquisition seems
to make sense. GE has a portfolio of specialized healthcare applications. For instance
last year GE software was involved in half of all births in the

US

. With many such applications that are successful in their own relatively small markets
it would seem to make sense that a strategy to tie them all together would be in order.
Enter IDX CareCast. CareCast is an EMR
that has an install base of around 600 hospitals. With an EMR as part of its core
offerings GE could sell a coherent solution that offers an application in almost every
space in healthcare.

 

Underneath there may be problems.
CareCast is 25 years old. It says so right on their website. The core of CareCast
is written in COBOL. There weren’t enough COBOL programmers to go around six years
ago. I am not convinced that COBOL programmers are growing in number. Traditionally
CareCast ran on Tandem mainframes. Today it only runs on HP NonStop servers with FailSafe
Technology. FailSafe is derived from Tandem mainframes.

 

Am I missing something? GE seems
to have bought technology that is aging at best. IDX was fired last year from providing
applications to
Southern England
as part of national healthcare IT initiative. The reason that was given was not being
modern enough from an IT perspective. Surely GE knew this. So GE must be seeing some
hidden value that is causing them to pay $1.2 billion for IDX. So what am I missing?

 



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