Misys senses medic confusion on US stimulus package

(By Anthony Miller – Thursday, 9th April 2009 9:30am). It sounds like Barack Obama’s attempts to accelerate the adoption of electronic medical records (EMR) in the US healthcare system have caused as much confusion as celebration. According to Misys CEO, Mike Lawrie, who updated the market on the Q3 numbers today (see here), the US fiscal stimulus package promises between $44-64k per physician to implement EMR. Payment will be ‘front-end loaded’, with $18k in year 1 and $20k in year 2. The catch? Payments don’t commence until October 2010 – and to get their hands on the dosh, medics will have to show 'meaningful use' of EMR. What ‘meaningful use’ means precisely will be revealed next month.

Now, whereas Lawrie trumpets the package as a great opportunity for Misys (via AllscriptsMisys), the reality is that the uncertainty has caused business to slow. Frankly, if the reimbursement is around this substantial level, then surely the US government anticipates that the investment required by the medics will be higher. Whether medics will feel inclined to ante up these sorts of sums over the next 12 months in the hope that they might start to get some of it back in two or three years hence sounds to me unusually optimistic, though I guess this also depends on the level of direct benefits that EMR systems are meant to deliver in the short term. But if you were a medic, would you take the risk?

The ‘other two halves’ of Misys’ were a mixed bag. Whereas the TCM (Treasure & Capital Markets) business grew 11% pro forma – with ILF/ASP revenues up 23% - the core Banking business saw flat order intake and 2% pro forma revenue growth, although ILF/ASP revenues were up 10%. Services revenues barely grew 1%, with a 7% increase in TCM services offset by a 6% decline in core banking services. No real surprises here.

I asked Mike Lawrie what impact he thought Fidelity’s acquisition of US banking software and services player Metavante would have on Misys. He pointed out that Misys does not really compete with Metavante on processing services and seemed sanguine that the deal would not boost the competitiveness of Metavante’s partnership with Misys archrival Temenos. This might all change, of course, should Fidelity make a play for Temenos too. I will be attending the Temenos Customer Forum in Monaco in a couple of weeks and hope to get a much clearer picture on the fortunes and prospects of the major players in the UK banking software market.