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Allscripts' McKesson EIS Business Acquisition 2017

Allscripts' McKesson EIS Business Acquisition 2017
Frustrated Paragon Customers Hope for Quick Development

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In August 2017, Allscripts announced their intentions to purchase McKesson's Enterprise Information Solutions. This announcement comes after a period of uncertainty regarding McKesson’s plans for the future of Paragon and other EIS solutions. KLAS reached out to current Paragon customers to gauge how they are reacting to the news. Do Paragon clients feel the acquisition puts them in a better position? Does it change any customers’ long-term plans? To find out, KLAS got perspectives from 38 organizations (30% of all organizations using Paragon).



1. 76% of Paragon Clients Say the Acquisition Does Not Change Their Future Plans

One-quarter of interviewed Paragon customers say the announcement will potentially change their long-term plans—this group is split between those who were previously planning to leave but are now reconsidering (13%) and those who were planning to stay but are now reconsidering (11%). Of the 13% already planning to leave, many like that Allscripts is solely focused on healthcare software (unlike McKesson) and believe Allscripts will invest the resources needed to make Paragon successful. Of the 11% who were previously planning to stay, some have had poor experiences with Allscripts in the past or fear that Allscripts is repeating McKesson’s mistake of trying to develop two EMR platforms. The biggest portion of respondents are organizations whose plans have not changed following Allscripts’ announcement. Time will tell whether some larger Paragon customers will consider Allscripts Sunrise Clinical Manager in their go-forward decisions.

paragon customers future plans post announcements

2. Clock Is Ticking for Allscripts to Improve Paragon; 24% Feel Their Position Has Improved


While many Paragon users are glad the uncertainty of a pending acquisition is over, most interviewed customers feel that Allscripts’ announcement does not improve or worsen their position with Paragon—this group includes organizations who have already made decisions to leave Paragon, those who feel stuck with the product, those who are waiting to see what Allscripts will do, and those who are satisfied with Paragon. Regardless of position, many interviewed customers agree that if Allscripts is going to entice Paragon customers to stick around, they are going to have to move quickly to provide not just a strategy but actual improvements to Paragon’s functionality and support. Nearly one-quarter of interviewed customers feel their position has improved and believe Allscripts intends to keep Paragon in the community space, where it has historically been more frequently deployed and where the functionality gaps aren’t as prominent.

paragon customers feelings about their position post announcement

3. Acquisition Doubles Allscripts' Market Share; Can They Make Paragon Relevant Again?

Allscripts’ acquisition bumps them up to fourth place in terms of total US market share. Sunrise Clinical Manager’s market share has grown incrementally over the past three years, and satisfaction with SCM has been steady over the past five years. SCM hasn’t kept pace with the market leaders in terms of new contracts or overall mindshare. With the acquisition of Paragon, Allscripts has an opportunity to turn around Paragon customer satisfaction and market share, which have both plummeted over the past several years as a result of slow development and the uncertainty created by McKesson’s divestment of other HIT products.


contracted market share

4. Confidence in Allscripts' Future Development Varies

For years, Paragon customers have been significantly disappointed by McKesson’s development efforts. Though Allscripts has done better with development, Sunrise Clinical Manager customers feel the system has room for some improvement. Just under half of interviewed Paragon customers are withholding judgment as to whether Allscripts’ development of Paragon will be meaningful. Another 29% are confident that Allscripts will continue to develop and improve Paragon. They believe Allscripts is looking to fill a gap, and they see the acquisition’s lower price point as a signal that Allscripts plans to put additional R&D resources into Paragon. An equal number are doubtful; they feel developing Sunrise Clinical Manager and Paragon will divide Allscripts’ focus, and they view the lower purchase price as evidence that Allscripts doesn’t think Paragon is salvageable.


customer confidence that allscripts will continue to develop and improve paragon

Key Topics

  1. 76% of Paragon Clients Say the Acquisition Does Not Change Their Future Plans
  2. Clock Is Ticking for Allscripts to Improve Paragon; 24% Feel Their Position Has Improved
  3. Acquisition Doubles Allscripts' Market Share; Can They Make Paragon Relevant Again?
  4. Confidence in Allscripts' Future Development Varies
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This material is copyrighted. Any organization gaining unauthorized access to this report will be liable to compensate KLAS for the full retail price. Please see the KLAS DATA USE POLICY for information regarding use of this report. © 2019 KLAS Research, LLC. All Rights Reserved. NOTE: Performance scores may change significantly when including newly interviewed provider organizations, especially when added to a smaller sample size like in emerging markets with a small number of live clients. The findings presented are not meant to be conclusive data for an entire client base.