LET'S SAY you're a home medical equipment provider and you're reluctant to modernize your operation.

You think all that computerese-dot-com stuff is too dot-complicated to learn. It's too costly to buy, too unnecessary for this type of business. Besides, you might be selling the company soon anyway.

About that last factor, consider this: One of the first things any potential buyer will want to know is the state of your company's technology.

"Prior to closing a purchase, we send our systems group in to analyze the condition and compatibility of the systems," says Ron Allen, vice president of health care services for Walgreens Health Initiatives, the Deerfield, Ill.-based subsidiary of Walgreen Co. "It's part of the determining factors for the purchase."

As it was when Walgreens Health Initiatives purchased Glendale, Ariz.-based Cactus Healthcare and Supply in September. Under the name of Walgreens Advance Care, the division provides home respiratory services, home infusion services and HME in select markets.

While it might be threatening to some small HME providers when a big corporation starts gobbling up little guys, it also presents opportunity. And the big guys aren't exactly shopping for run-down fixer-uppers.

"When you evaluate a purchase and in doing due diligence, you look at-among other things-what kind of technology is in place, because that influences the company's success or failure," Allen says.

"You look at hardware, software, telephone systems. It all needs to be considered. If a company is not technologically advanced, you want to look at how capable that company will be converting. It might run on pencil and paper, but if it's a quality organization, it can still convert. But you don't want a bunch of problems that can't be fixed. You don't want to get into a hole so deep you can't get out."

Allen says all systems and processes are analyzed, from patient satisfaction and the way orders are taken to deliveries, administration and reimbursement. Especially reimbursement.

"That's where technology can be the most utilized and aggressively applied in the home care industry," he says.

The transition for Cactus Healthcare and Supply has gone smoothly, Allen says, because the company was already using a software system employed by Walgreens and delivery personnel were equipped with wireless telephones to facilitate communication. He said that Jeff Vetnar, the previous owner who now is a Walgreens regional operations manager, was receptive to changes such as a telephone system upgrade implemented to improve the way business was done.

Allen says the rap against the health care industry's lack of sophistication regarding technology is unfair. Walgreens boasts of a mail-service pharmacy utilizing technological efficienciesto deliver prescriptions by mail.

"Health care is probably as innovative and aggressive as any industry," he says. "Innovation is what differentiates you from the competition."