Private-equity firms invest in health IT

Private-equity investors are betting money on the future of health IT companies, in part because of the $40 billion in federal incentive cash heading toward those companies over the next six years.

Also driving the private-equity investment: Hospitals and medical practices are increasingly turning to software to boost revenue collections.

Large, firmly established health IT companies are most likely to benefit, The Wall Street Journal reported Tuesday in its Private Equity Beat blog. Hospitals want to hire vendors with a good track record and the resources to invest in upgrades and services over the long haul, Dr. Bruce Darrow, a cardiologist and assistant professor at Mount Sinai Medical Center, told the writer.

Recent private-equity deals cited in the piece include an October deal in which "health-care payment systems provider Emdeon Inc., backed in part by General Atlantic LLC and Hellman & Friedman LLC, bought PE-backed reimbursement specialist Chamberlin Edmonds & Associates Inc. for $260 million."

A more detailed report was published earlier this week on the Dow Jones LBO Wire.