Palm injects funds into ePhysician

Palm has checked itself into the hospital.

On Tuesday, the handheld maker announced that it has taken a stake in ePhysician, a start-up that allows doctors to use handheld computers to send prescriptions to pharmacies.

The investment from Palm Ventures, the company's venture capital fund, was part of an $18 million round of financing for ePhysician, whose products also allow physicians to access patient records, search a drug database and bill for services--all from a handheld computer.

The health care market is shaping up as a key battleground for Palm and Microsoft in their push to equip the business world with handhelds. Palm's first publicly announced investment was in Golden, Colo.-based Healthetech, a maker of software and medical products that allow individuals to check their metabolism, monitor exercise, and count calories on handheld computers. Palm announced that deal in early December.

Other investors participating in ePhysician's third round of funding were venture firms Dresdner Kleinwort Capital and Benchmark Capital, as well as drugstore chain CVS.

Mountain View, Calif.-based ePhysician said its products are already in use by 8,000 doctors who have submitted more than 400,000 prescriptions electronically.

"We are proud to announce the closing of our third round of funding...particularly at a time in which it has been difficult for many companies to raise capital," Stuart Weisman, ePhysician's chief executive, said in a statement.

The size of Palm's stake was not disclosed. Palm launched its $50 million Palm Ventures fund in September.