Sage Software acquires Medical Manager

August 23, 2006

Will a new owner refurbish the software's reputation?

Will a new owner refurbish the software?s reputation?

The roller coaster keeps rolling for the tens of thousands of doctors who use Medical Manager practice management software. In August, a company called Sage Software announced that its London-based parent would buy the division of healthcare-IT vendor Emdeon that sells Medical Manager as well as Intergy EHR and practice management software. The sale price is $565 million. Medical Manager and the Intergy programs will be absorbed into Sage Software, based in Irvine, CA.

The sale represents the latest twist for a program developed in the early 1980s by a Florida company called Personalized Programming. That company morphed into an entity that went public in 1997, changed hands in 1999, and was ultimately acquired by WebMD in 2000 during the dot.com frenzy. WebMD changed its name in 2005 to Emdeon.

In 2001, WebMD put the number of doctors who used Medical Manager at more than 185,000. However, that figure is now probably closer to 120,000, says healthcare IT consultant Mark Anderson in Montgomery, TX.

Some of Medical Manager’s current problems began in 1997 when the vendor began buying its far-flung independent dealerships in a move to consolidate its operations. Many customers complained that service deteriorated as a result, says Anderson. Later, Emdeon tried to persuade practices using Medical Manager, a character-based program, to switch to the Intergy practice management program, which is based on Windows. Most Medical Manager users did not convert, notes Anderson, even though they complained that Emdeon, favoring Intergy, gave their software less support than before.

The dealership buyouts came back to haunt the company. In 2005, four former executives from WebMD’s old Medical Manager subsidiary pled guilty to federal charges of receiving kickbacks from acquired dealerships and cooking the company books. Another 10 former executives were indicted on similar charges; none of those cases have come to trial yet. The scandal depressed software sales, says Anderson.

The Medical Manager saga should remind doctors that when it comes to buying software, the biggest vendor is not always the best vendor. “Big companies can be bought and sold multiple times,” says Anderson. “Size doesn’t ensure long-term survivability.”