Insurer Aetna Inc. has agreed to acquire health information exchange platform vendor Medicity Inc. for approximately $500 million. The acquisition is expected to close in early January.

Salt Lake City-based Medicity has considerable market share among emerging state HIEs, and regional and proprietary HIEs. In total, the company says it serves more than 760 hospitals, 125,000 physician users and 250,000 end users.

Aetna believes the acquisition will help the company save money through better care coordination while increasing its software revenue. The company's ActiveHealth Management disease, case and utilization management subsidiary already operates a Web-based platform--significantly enhanced this past summer--to offer a range of data to physicians and patients.

The CareEngine decision support system previously used data from claims submitted to health plans, laboratories, pharmaceutical benefit management firms, and personal health records from ActiveHealth to identify gaps in care and patients appropriate for disease management programs. In partnership with IBM Corp., ActiveHealth recently built the Collaborative Care Solution around CareEngine to also pull data from electronic health records systems, as well as pathology and radiology systems, and to make information accessible via the Web. The new platform is designed offer a more robust data set to analyze and enable clinicians and patients to view.

Now, Medicity will augment ActiveHealth's offerings with the HIE capability to deliver decision support data while also improving care collaboration. The acquisition is a strategic response to regulatory changes, such as the health reform law, as providers move toward new care and payment mechanisms, such as accountable care organizations.

Aetna's buy of Medicity follows the recent acquisition of HIE vendor Axolotl Corp. by the Ingenix subsidiary of UnitedHealth Group, which includes one of the nation's largest insurers. That acquisition legitimized HIE involvement of payers and Aetna now is reacting, says John Osberg, principal at Informed Partners LLC, a Marietta, Ga.-based consulting firm.

Upon closing, Medicity will operate as a separate business within Aetna under its existing leadership. More information is available at

--Joseph Goedert


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