NextGen Healthcare is acquiring Entrada, a mobile app vendor that offers applications that enable physicians to use dictation to add notes to various vendors’ electronic health records systems.

Industry observers believe the purchase could be the first of several similar acquisitions by electronic health records vendors that sell products in the ambulatory care space, as they try to address the need to ease physicians’ documentation burdens.

NextGen announced the Entrada acquisition last week. Under terms of the purchase, NextGen will pay about $34 million for Entrada. That’s about three times its 2016 revenues of $12 million; the company reported a $2 million loss in the year ended December 31.

Entrada’s mobile app integrates with clinical platforms and all major electronic health records. It enables a doctor to dictate clinical information into a smartphone and then edit it. The physician can send documentation directly into an EHR or securely send it to Entrada’s transcription team to complete all required documentation and related tasks. This saves time for the physician and obviates the need for either in-house transcriptionists or transcription services.

The purchase brings several benefits to NextGen, asserts John Osberg, managing partner at Informed Partners, a consulting firm specializing in the ambulatory care space.

With the acquisition, NextGen gets advanced documentation software to make physicians’ lives easier and a new marketing channel to cross-sell its various product lines—which include electronic health records, practice management, revenue cycle, population health, analytics, interoperability and cloud services—to Entrada customers, particularly those who work in specialty practices.

The addition of Entrada gets NextGen into health information management, Osberg says. “This is an all-document workflow play. The doctor dictates, (and) the documentation is transcribed and fed into the EHR,” he explains. “NextGen gets deeper core competencies in cloud and mobile services.”

The purchase affirms the future that NextGen believes mobility solutions will play in future use of EHR solutions, says Rusty Frantz, NextGen’s president and CEO. “Mobile health solutions in the palm of the provider are quickly becoming some of the most valuable real estate in healthcare,” he says.

Rusty Frantz

"Entrada is focused on improving clinical workflows and creating opportunities for additional provider and patient engagement for the next generation of care delivery," noted Bill Brown, CEO of Entrada. "With NextGen Healthcare’s resources, we can accelerate unlocking the productivity potential for caregivers, ultimately helping them gain time to focus on their patients."

NextGen did not respond to a request for an interview to discuss the acquisition.

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Entrada, Osberg believes, could lose some of its current clients who are ambulatory software rivals to NextGen. For example, Entrada has a marketing relationship with ambulatory vendor Greenway Health, which also operates a health information technology marketplace where vendors offer their own products, and Greenway could decide to terminate the Entrada relationship.

This type of acquisition won’t be the last, Osberg further predicts. There are competitors to Entrada who now are becoming more attractive to other vendors in the ambulatory software space that are seeking to add operational efficiencies to their product offerings.

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