Why Philips is buying population health vendor Wellcentive

Acquisition augments its telehealth business with intellectual talent, analytics tools, says Tom Zajac.

Royal Philips has significantly deepened its footprint in the population health management sector with the acquisition of Wellcentive, which sells analytics products that support population health management initiatives.

Terms of the acquisition were not disclosed.

Philips already has a strong base of population health technologies and services that include enterprisewide telehealth, home monitoring of patients, personal emergency response systems, and services to identify and provide preventive care to high-risk patients.

Now, Philips picks up a suite of boots-on-the-ground healthcare analytics capabilities with Wellcentive’s cloud-hosted platform to gather and analyze clinical, financial and claims data across a hospital or enterprise, to improve care coordination and reimbursement.

Wellcentive, with 115 employees, has served the industry for 11 years and its technology oversees care of more than 30 million patients, according to CEO Tom Zajac.

The company will be folded into Philips’ population health management business line, which Zajac will lead. Philips will integrate Wellcentive products into its HealthSuite cloud-based population health platform.

Putting Zajac in charge of population health management is a strong signal that Philips intends to succeed in population health, says Mitch Work, president and CEO at TheWorkGroup, a market intelligence consultancy. “We’ve seen these deals fall apart because corporate culture is often discounted; leaders don’t understand why the deal was done or were not given key roles, so they often leave as soon as the non-compete clause expires.”

If the acquiring company does not take enough time to learn the culture being acquired and brings in its own people, those in the bought company can become disillusioned and leave, taking their intellectual property with them, he adds. “It looks like Philips is doing a good job. Corporate culture across the board is one of the biggest reasons for a failed merger. It’s refreshing to see the apparent way this will be handled.”

So, while it remains to be seen how synergies eventually will play out, “It seems to me that Philips now has a very nice continuum of services to address population health,” Work says.

Kathyrn Whitmore, founder and managing principal of the population health management/analytics consultancy STS Consulting Group, also likes the early signs for the merger.

“Given Wellcentive’s leadership in population health management tools and Philips’ global reach in patient-focused healthcare technologies, I think they will mesh well and rapidly gain market share assisting health systems in transitioning to value-based quality of care models,” she notes. “Connecting the consumer by smartphone to contribute to this information hub in the cloud is a critical success factor improving an individual’s health and a largely untapped source of information in the journey toward population health and value-based care.”

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