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Watertown, Mass.-based athenahealth Inc., which offers outsourced physician billing services with practice management/electronic health records software, will acquire point-of-care drug and disease reference vendor Epocrates for about $293 million. Athenahealth's stock price rose about 3 percent in very early trading on January 7 following the announcement.

The acquisition brings to athenahealth a mobile computing vendor with sizable market share of the nation’s physicians--some 330,000 users--but with a history of being unable to fully monetize its content and huge client base. Clinical users get the Epocrates content for free with sponsors, particularly drug companies, funding the service. Athenahealth expects Epocrates to have about $110 million in revenue during 2012, down from $113 million in 2011.

Athenahealth CEO Jonathan Bush acknowledges the price tag is steep, but so is the potential to expand Epocrates’ business model--and value. One measure of the potential value: Seventy percent of physicians don’t know athenahealth but 70 percent use Epocrates.

The Epocrates content is read-only, Bush says, limiting its value beyond immediate diagnostic support for a physician. But athenahealth--with 38,000 physicians and other prescribing professionals as clients--will embed the drug and disease reference content in its electronic health records software. This will enable easy access to reference information from within the EHR, meaning the information can be printed and even transmitted to other professionals, Bush says.

For example, a physician could refer a patient to another and transmit the referral, reference content and the patient’s electronic chart to the referred physician. This results in a cleaner, more comprehensive referral while also acting as a demo for athenahealth’s EHR, Bush explains. The Epocrates content can be monetized by attracting sponsorships from companies beyond drug firms, such as laboratories and diagnostic imaging centers, which could sponsor alerts to physicians or get highlighted in search results. Bush expects to invite the major leaders of Epocrates to say with athenahealth.

The Epocrates deal is the second acquisition for athenahealth in recent months. The company in October 2012 bought data analytics vendor Healthcare Data Services LLC of Boston, which provides population-based cost and quality data analysis and reporting to aid providers in moving toward risk-based payment models and improve care coordination. The company also brought to athenahealth new relationships with mid-sized and large integrated delivery systems.