MedicalLogic Merges With Medscape, Buys Total eMed

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The wave of consolidation in the online healthcare market continued yesterday as MedicalLogic Inc., an online medical records company, said yesterday it agreed to merge with Medscape Inc., a provider of alternative health news and medical information. MedicalLogic, Hillsboro, OR, also acquired the privately held Total eMed Inc., a provider of remote transcription services over the Internet for ambulatory care physicians. The deal is estimated to be worth $1.27 billion.

The new company will be known initially as MedicalLogic/Medscape and will target doctor-patient communication. The company will market technology for creating online health records, enabling physicians to create and retrieve information in ways that fit their workflow and personal preferences. Records will be able to be accessed through desktop and laptop computers, personal digital assistants, and telephones from any location at any time.

Medscape's professional and consumer sites, and CBSHealthWatch by Medscape, will give access to physician-generated medical records, appointment scheduling, filling of prescriptions, the ability to engage in two-way communication with the physicians in their office and other services.

The merger will allow the company to leverage existing strategic partnerships for greater revenue opportunities. Medscape's partnership with CBS Corp. brings $150 million in advertising and promotion on CBS properties over seven years, as well as exposure on CBS News through an exchange of editorial content. Medscape also has partnerships with National Data Corp., America Online and, while MedicalLogic has agreements with leading prescription drug, content and delivery providers, including, PlanetRX and Dell Computers.

Last week, Healtheon/WebMD Corp. bought Medical Manager Corp. and CareInsite Inc. to become the largest online healthcare site.

"Our new company has the potential to significantly improve the healthcare experience for our patients and physicians - advancing our shared vision while creating value for partners and shareholders," said Mark Leavitt, MD, PhD, who will retain the title of CEO as well as becoming chairman of the board of the combined company. "With our complimentary products and services, individual strategic partnerships and new financial strength, we will focus our energies to the point of care where patients and physician come together to drive the major decisions in healthcare today."

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