L&H Eyes Enterprise Transcription with Dictaphone, Dragon Systems

April 5, 2000

L&H eyes enterprise transcription with Dictaphone, Dragon SystemsVR firm unveils broader healthcare strategyVoice-recognition vendor Lernout & Hauspie announced two multimillion-dollar acquisitions last month that should help

L&H eyes enterprise transcription with Dictaphone, Dragon Systems

VR firm unveils broader healthcare strategy

Voice-recognition vendor Lernout & Hauspie announced two multimillion-dollar acquisitions last month that should help propel the company into the major leagues in the electronic medical transcription and related markets. L&H, of Burlington, MA, and Ieper, Belgium, signed a definitive agreement with Dictaphone to purchase the Stratford, CT-based company in a stock deal worth about $930 million. L&H also intends to purchase Newton, MA-based Dragon Systems, a leading developer of voice-recognition technologies, in another stock deal worth around $590 million.

These acquisitions, which are part of L&H’s previously announced intention to create a separate healthcare solutions business unit and enter the medical transcription market, follow the company’s January purchase of Omni-Med Transcription, a medical transcription firm based in Madison, WI. They also put L&H in a strong position to broaden into enterprise-wide general-medicine VR applications. The success of voice recognition in healthcare has been limited in large part by the technology, which has forced many vendors to take a specialty-by-specialty vocabulary approach to the market to ensure the highest degree of transcription accuracy.

But industry partnerships such as those being forged by L&H with Dictaphone and Dragon Systems offer the possibility of making voice recognition a standard integrated feature of enterprise-wide hospital and clinical information systems. L&H recently announced plans to create a separate legal entity for its Healthcare Solutions Group and is considering having the new healthcare unit set up a separate group for Web-based healthcare market services.

The first step in implementing the new strategy was the acquisition of Dictaphone, which gives L&H immediate access to Dictaphone’s large customer base and the opportunity to integrate leading technologies from L&H to create new healthcare enterprise products. Dictaphone currently claims 5000 medical industry customers worldwide, and as many as 400,000 U.S. physicians use Dictaphone for 100,000 hours of dictation each day for clinical record processing, according to industry analysts.

“As the leader in the medical dictation and patient record management market, Dictaphone gives L&H instant access to the resources to facilitate our launch of an entity dedicated to healthcare solutions,” said Gaston Bastiaens, president and CEO of L&H. “This should enable us to create an industry-leading solution utilizing speech and Web technology to improve clinical data capture and reduce transcription costs enterprise-wide.”

In particular, the client-server architecture of Dictaphone’s products and their strong foothold in hospital dictation and transcription processes leave L&H poised to introduce server-based speech-recognition systems that can be imposed on top of Dictaphone’s digital dictation systems to create enterprise-wide transcription systems that reduce the cost of labor associated with manually typing medical reports.

“Our approach is to take server-based speech recognition and apply it to the installed base of Dictaphone transcription systems and add telephony-base speech recognition as well,” said Robert Schwager, general manager of Dictaphone’s healthcare business and head of the healthcare solutions group at L&H. “This is more of a mass-production workflow approach than an individual department or physician approach.”

The Dragon Systems’ acquisition is expected to accelerate the development of new voice-recognition products and applications, including audio mining and natural language processing technology that L&H wants to use to enhance the extraction of medical data from existing reports, thereby enhancing data mining and outcomes research. Dragon Systems holds 35 patents related to its speech and language technologies, and its NaturallySpeaking continuous speech recognition product has been on the market since 1997.

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