Intermountain Health Care Inc. has sold its computer software division to GTE Information Services, in a deal that will net the Utah health care giant $10 million, officials said Thursday.
IHC said the sale's proceeds will go toward "charitable community health activities."More than 200 employees involved in IHC's nationwide software operations have transferred to GTE Health Systems Corp. The GTE subsidiary is based in Los Angeles, but will maintain offices in Utah.
The sale of IHC's software division, which develops, markets and supports innovative management software used by hospitals across the country, will enable IHC to commit more resouces to providing medical services, the company said.
"We decided last year to re-focus our organization's efforts on providing health care services in the Intermountain region, so we began to look for a buyer for the software programs," IHC president Scott S. Parker said.
He said GTE met IHC's criteria of keeping the software division's workforce and customer base intact, while providing marketing and financial strength.
GTE is a worldwide, $28.7 billion corporation, based in Stamford, Conn., and involved in telecommunications, lighting and precision materials. GTE Information Services, Tampa, Fla., is one of several GTE business units and is the parent of GTE Health Systems Corp.
IHC, which owns and operates hospitals in Utah, Idaho and Wyoming, developed its own software for hospital management in the late 1970s and began marketing the product nationally in 1982. The Management Information System is used in more than 150 hospitals nationwide.
In 1983, IHC created its for-profit subsidiary Affiliated Services Inc. to manage the corporation's profit making ventures and provide outside revenues to hold down health care costs, the company said. IHC's software operation, Information Systems Services, was a division of the ASI subsidiary, marketing 49 software products through offices in nine major U.S. cities.
While ASI's Information Systems Services division has been sold, ASI will maintain its four other divisions: Amerinet, a nationwide group-purchasing organization; Resource Services, providing services to IHC affiliate hospitals; Therapy Management, contracting therapy equipment, staff and management to health care facilities; and Occupational Health Services, operating industrial medicine clinics.
IHC will realize $10 million from the sale, after retiring long-term debt and meeting contractual obligations, a company spokesman said.
The non-profit corporation has come under fire for its domination of Utah's health care industry and its long-standing battle with local governments over IHC`s and other hospitals' tax-exempt status, said the sale's proceeds will go toward charity.
"We will invest these funds and use the interest generated to finance existing and planned hospital-based and outreach medical programs for people without sufficient means to meet their health care needs,' said William N. Jones, voluntary chairman of IHC's board of trustees.