Health Catalyst-Medicity deal has value-based care angle

The acquisition aims to give providers access to near real-time analytics, says Dan Burton.

Combining analytics expertise with health information exchange capabilities portends the possibility of real-time data analysis for healthcare organizations, and that’s one of the driving forces behind Health Catalyst’s acquisition of Medicity.

That transaction closes today, according to Dan Burton, Health Catalyst’s CEO. Terms of the transaction have not been released.

Aetna had owned Medicity since 2011, paying a reported $500 million to acquire it then. Healh Catalyst says its customer base includes more than 100 clients, including 21 state and regional health information exchanges (HIEs), large employers, health plans and 75 integrated delivery systems encompassing more than 1,000 hospitals.

But Burton also believes its Medicity’s access to providers in the ambulatory market that will help the combined company better serve its customers. Medicity is used by an estimated 185,000 clinicians in physician groups and extended care facilities, he says.

“Medicity’s roots are outside of the acute care setting; of the data they help manage, it’s tilted heavily toward ambulatory care data,” he says. Health Catalyst, by contrast, has emphasized analytics services from the acute care perspective; its Data Operating System offering includes AI-driven analytics and business intelligence, and a broad set of financial, cost, patient outcomes, and supply chain data from more than 400 hospitals and 4,000 clinics.

The deal gives Health Catalyst a bigger footprint in provider communities that use Medicity as their HIE vendor, contends John Osberg, a mergers and acquisition specialist at the consulting firm Informed Partners. Health Catalyst can integrate its data analytics and data warehouse platform into Medicity, with the HIE supplying providers with data they need to conduct analytics.

Health Catalyst’s Burton says Medicity customers will benefit from Health Catalyst’s capabilities in analytics, which can be layered on top of its core service of real-time data exchange. “They’ve said to us, ‘It’s great to be able to move the data in real time, but help us to understand the data.’ We’ve already had some meaningful discussions with their client base, and we believe we can offer Health Catalyst capabilities that can sit on top of (the Medicity) platform in a relatively short time frame.”

For Health Catalyst customers, the deal will offer capabilities to better exchange data that its analytics engine combines from a variety of sources.

That will be key for hospital organizations looking to improve performance in value-based care contracts, says Mike Mytych, owner of Health Information Consulting in Menomonee Falls, Wis. These organizations will need strong analytics—which Health Catalyst offers—and strong connectivity for providers and patients, which Medicity can bring. “Population health doesn’t work well without an HIE,” he contends.

“Adding Medicity’s data skills and technology, particularly in physician-led value-based care networks, is a great complement to our solutions,” says Dale Sanders, Health Catalyst’s president of technology.

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