Medsphere buys HealthLine Solutions to enhance EHR platform

Electronic health records
Medsphere said it plans to use the acquisition of HealthLine to improve the revenue cycle management features of its CareVue EHR system. (Getty/monkeybusinessimages)

California-based EHR company Medsphere Systems has moved into supply chain features of its technology with the purchase of Texas-based IT company HealthLine Solutions, the companies announced this week.

Medsphere said it plans to use the acquisition to improve the revenue cycle management features of its CareVue EHR system. HealthLine, which is based in Plano, Texas, specializes in smart IT solutions like RFID chips and barcoding to automate processes in the healthcare supply chain.

Medsphere said the extra functionality brought by the merger would help boost its revenues and control costs.

“HealthLine applications empower hospitals to increase revenue and lower labor costs while having complete confidence in inventory data, which is why we’re excited about this strategic acquisition,” said Medsphere President and CEO Irv Lichtenwald in a statement. “With the addition of supply chain management functionality, the CareVue solution overall—and the RCM component specifically—offer a unique combination of comprehensive and affordable functionality that no other healthcare IT provider has chosen to match.”

The companies didn't disclose terms of the deal.

The move comes just weeks after Medsphere closed on a $32 million funding round from Morgan Stanley Expansion Capital and East West Bank in December, promising to use the funds to address "accelerating demand" for health IT solutions.

“The company is a true innovator, giving hospitals and clinics the workflow and technology they need at prices they can pay. We’re excited to invest in Medsphere as they continue to share their unique offering with healthcare organizations,” Bill Reiland, managing director of Morgan Stanley Expansion Capital, said at the time.

Medsphere isn't the only health IT company investing heavily in RCM systems either. Last year, Veritas Capital made heavy investments in the space, buying both GE Healthcare's IT unit and health IT company Cotiviti.

RELATED: GE Healthcare sells off health IT unit for $1B

GE sold its IT unit for $1.05 billion in cash last April, while Veritas' Verscend Technologies purchased Cotiviti for $4.9 billion in August.

“We see a tremendous opportunity to invest in this business and partner with management to take advantage of a $9 billion market that continues to benefit from favorable sector trends, particularly a real and urgent need to digitalize our healthcare system,” Veritas Capital CEO and Managing Partner Ramzi Musallam said in a release.