Allscripts-Misys cuts jobs, combines offices

Misys Healthcare Systems and Allscripts consummated a corporate union last week by letting go 44 local employees and beginning to move several hundred workers now spread out in four offices into one facility in Raleigh.

Glen Tullman, CEO of the new Allscripts-Misys Healthcare Solutions, said in a telephone interview Monday that the terminated jobs were redundant, not a sign of financial problems for the Chicago-based company. Tullman said the newly combined business is now focused on filling more than 100 vacancies in software sales and product installation, mostly in Raleigh.

These are among the first moves that will ultimately determine if the merger between former rivals Allscripts and Misys will vindicate the corporate merger strategy or prove inadequate to stave off competitors.

Allscripts-Misys hopes to sell Allscripts medical-records software to some 90,000 physicians who are customers of Misys.

"Our sales people think every one of those 90,000 physicians is a great prospect," Tullman said. "Everyone will be watching how well we'll execute."

The Raleigh operations are the biggest site for Allscripts-Misys, even though this region is losing the cachet of having the former Misys Healthcare corporate headquarters.

The company now employs 1,011 workers in the Triangle who will eventually work out of one office complex on Six Forks Road in Raleigh. The company is closing two Cary offices and a Morrisville warehouse -- more than 70,000 square feet in all -- occupied by Allscripts and moving about 300 workers into the 216,000- square-foot Misys offices.

Misys had moved into bigger space in anticipation of aggressive corporate growth that never happened. Last year Misys' site president was forced out when the company's British parent deemed the Raleigh health-care division's financial performance "unacceptable."

The companies are undertaking a growth plan during uncertain economic times. Still, Tullman said that bad times can be good for the health-care industry and could give Allscripts-Misys products a selling point: economic savings through efficiency.

Within the health-care information technology industry, a software records product typically costs about $10,000 per physician, plus an annual fee for service and technical support.

Among Tullman's chief challenges will be retaining top sales performers, said David Bond, who retired as president of Allscripts' health-care division this year. Bond said sales reps are driven by ambition, and could revolt if their sales territories and customer rosters are carved up to accommodate a bigger sales force.

"That's what drives this business: sales talent," Bond said. "These experienced sales reps who sell three or four times as much as other people -- you lose them and you're in trouble."

Allscripts-Misys has about 10 national rivals but also competes against hundreds of small regional companies that sell medical software to doctors and hospitals.

"It's going to be a dogfight for every customer account you get," said John McConnell, who ran both companies' predecessors and stepped down from the Allscripts board of directors to protest the merger.

Allscripts supplies electronic health record software to about 40,000 physicians. The health-records business is less established and has greater growth potential than the Misys product in electronic billing and scheduling.

Misys supplies billing and scheduling software to about 110,000 physicians, but about 90,000 of those customers do not use Allscripts products, creating a business opportunity for the company.

McConnell and Bond warned that the existing portfolio of Misys customers is no guarantee that those doctors won't look at competing products. It's almost a given, the former executives said, that when offered new products, the doctors will start shopping around.