Defense companies target health care ... Washington Post

Colleagues, See article and link below from the Washington Post on how defense contrators are increasingly focusing on acquiring health information technology expertise and companies .... 

Traditional defense contractors are increasingly muscling into the health care services field, hoping that the burgeoning area can help them weather reductions in Pentagon equipment buying.

Bethesda-based Lockheed Martin and Falls Church-based General Dynamics, both of which already had health care practices in place, have ramped up their businesses in recent weeks with new acquisitions.


General Dynamics announced it would pay close to $1 billion to acquire Arlington-based Vangent, a federal contractor that specializes in health care services. Vangent, which is majority-owned by private equity firm Veritas Capital, will become part of General Dynamics Information Technology.

Gerard J. DeMuro, executive vice president of GD’s information systems and technology group, said the Vangent buy complements the company’s 2008 acquisition of Towson-based ViPS, which provides mostly back-office health IT, such as claims processing systems and fraud detection software. Vangent focuses on systems customers use, such as call centers for Medicare and Medicaid beneficiaries.

“We’ve been growing in this market organically and through acquisitions over the last three or four years,” said DeMuro, noting that GD’s health care practice now generates annual revenue of $250 million to $300 million. The company sees the market “growing faster than the traditional defense market.”

A week later, Lockheed announced its acquisition of Diamond Bar, Calif.-based QTC Holdings, which provides outsourced medical evaluation services to the Department of Veterans Affairs, among other government agencies. Lockheed did not disclose the terms of the agreement.

The company said in a statement that QTC — and particularly its case management and electronic health records experience — made it a natural fit.

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