Emdeon deal shows paper power in health care finance

Smart companies have been trying to make this work for over 20 years now. While Emdeon was considered a leader in this space when it went public last August, it's still not a billion-dollar company and its stock has gone nowhere.

Thus the acquisition of FutureVision, which does document conversion, turning paper into bits. With FutureVision in its portfolio Emdeon can now automate a clinic or hospital's payments office.

Emdeon likes to quote a November report that $11 billion can be saved by automating the payment systems of hospitals and clinics, and that it has 500,000 providers taking its payment and remittance data. So how much was this acquisition worth? About $20 million in cash.

Emdeon itself is not in wonderful financial shape. The company had about $860 million in debt when it went public last year, bringing in about $160 million in investment through the offer. Investors in that public offering are currently "under water," holding a small loss on their investment.

Emdeon's struggles are a great microcosm for just how primitive the American health system remains, from a technology perspective. It's about paper-shuffling, it's about piecework, it's about as inefficient as can be. But all change agents are going to be fighting an uphill battle.