GE Medical–Mecon merger creates Healthcare Solutions subsidiary

April 5, 2000

GE Medical–Mecon merger creates Healthcare Solutions subsidiaryModality vendor enters Web database marketGE Medical Systems has acquired Mecon, a provider of healthcare data mining software, in what appears to be a strategic move to

GE Medical–Mecon merger creates Healthcare Solutions subsidiary

Modality vendor enters Web database market

GE Medical Systems has acquired Mecon, a provider of healthcare data mining software, in what appears to be a strategic move to continue diversifying its modality systems offerings into healthcare information technologies. Following the acquisition, San Ramon, CA-based Mecon has changed its name to GE Medical Systems Healthcare Solutions. In this transaction, Mecon shareholders received $11.25 per share payable in GE stock, or 0.081 shares of GE stock for each share of Mecon common stock held at the close of the merger, plus cash for fractional shares.

Consistent with its recent emphasis on integration of productivity and workflow (PNN 1/00), Waukesha, WI-based GE will work with the new Healthcare Solutions group to develop Internet-based applications to control costs and provide quality management to customers. Healthcare Solutions claims that its current performance improvement products generally identify 10% to 14% potential savings in operating expenses for customers.

In January, Healthcare Solutions launched two free tools through its Mecon.com Web portal. The Mecon 25th Index allows healthcare providers to compare their actual performance against the top 25% of Mecon’s customers in its Peernext operational benchmarking database, which creates benchmarks from the data it collects. The BBA Calculator calculates the effect of the Balanced Budget Act of 1997 on operating margin and allows companies to modify inputs to assess effects of budget cuts. However, Mecon does not allow anonymous posting; users must provide the facility name and contact information before logging on to these services.

Because the merger has just been finalized, it is unclear how Mecon’s products will be affected under the new GE Healthcare Solutions banner. The development of cost control and quality management products that GE and Mecon tout in recent press releases does not perceptibly differ from the benchmarking and data mining products and services that Mecon was already offering, aside from GE’s intention to integrate Six Sigma across Healthcare Solutions’ Web-based databases and benchmarking tools.

© 2000 Miller Freeman, Inc., a United News & Media company.