We see four main takeaways from this deal for Change Healthcare and the wider industry:

1) Change Healthcare is in for the long-haul in terms of investment and R&D to “cloud enable” its existing imaging IT solutions and is banking on early mover advantage to pay-off mid-term.


2) The addition of Nucleus.io will round out the Change Healthcare portfolio (added image exchange and universal clinical viewing capability), strengthening its offering for competition in major acute hospital procurement against leading competitors Philips, GE Healthcare, Sectra, Agfa, Fujifilm and Visage.

3) The consolidation of image exchange, image storage and universal viewing into larger imaging IT platforms is progressing at pace (exemplified further by the recent merger of Mach7 Technologies and Client Outlook, completed July 2020). This is a clear reflection of healthcare providers’ increasing focus and demand for more integrated, streamlined and less complex procurement for imaging IT.

4) Key market competitors are addressing the growing interest in cloud adoption with a variety of partial solutions and associations with public cloud vendors. Today, none have a complete cloud-native imaging IT portfolio that can offer comparative or better performance versus traditional on-premise offerings.

Change Healthcare has clearly nailed its colours to the mast in a quest to be the first of the major imaging IT vendors to be able to offer a full-featured diagnostic imaging IT solution on the cloud.

First-mover advantage will offer some benefits, including the visibility and brand uplift for forging an innovative path toward new technology adoption. Healthcare providers are also increasingly focused on Total Cost of Ownership (TCO) for imaging IT in these increasingly economically challenging times. Cloud-hosted solutions make a resounding case for longer-term economic efficiency versus on-premise for most customers, though clear evidence has been limited so far. Competitively, this latest move also puts further pressure on its peers to gear up for a future market that clearly long-term will be cloud-based.

However, first-mover advantage also comes with some challenges. Most health providers today are some way from fully committing to off-premise solutions, in part, a hangover from the huge, scrambling investment in private data centres networks on the back of the EMR-focused Meaningful Use/MACRA regulatory changes. Cloud adoption from major acute EMR vendors has also been sluggish, not helped by the recent Epic Systems pull-out of a partnership with Google Cloud. This will only further exacerbate the data ownership and patient data security concerns that healthcare providers have in relation to public cloud.

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