Allscripts posted its best quarter of the year as it closed out an acquisition of McKesson’s health IT portfolio, which the company plans to leverage to broaden its reach in the EHR market.
The Chicago-based EHR vendor recorded $449 million in revenue during the third quarter of 2017, a 15% year-over-year increase. Third-quarter bookings totaled $304 million, down from the previous quarter's bookings of $407 million, but a 4% increase from the third quarter of 2016.
The third-quarter showing sets the company up to hit the high end of its anticipated 2017 revenue range, which tops out at $1.82 billion.
Earlier this month, Allscripts finalized its acquisition of McKesson’s health IT services, including its Paragon EHR system, which the company plans to maintain. On an earnings call last week, Allscripts CEO Paul Black said optimism from McKesson’s client base has “exceeded our expectations.” President Rick Poulton said that Allscripts is focused on integrating the McKesson platform into its service line, adding that it will “probably only be a couple of quarters before it loses its standalone identity.”
Beginning in the fourth quarter, Allscripts plans to incur approximately $50 million in severance costs after the company eliminated duplicative non-consumer-facing corporate positions following the merger.
Black added that with the McKesson acquisition, which gives the vendor a new foothold in the small hospital market, he’s optimistic about the company’s future despite regulatory uncertainty swirling throughout the industry.
“As we work to finish the year on a strong note, I like our positioning in a turbulent time in healthcare,” he said. “There are no shortage of challenges within the healthcare industry attributed to uncertainty given the deliberations in Washington and the hands-on issues clients continue to face form the three natural disasters that impacted millions during Q3.”