Data analytics vendor Health Catalyst’s pending acquisition of health information exchange vendor Medicity may in part be a transaction of convenience, but it also fulfills several strategic goals for the companies.

That’s the belief of John Osberg, a mergers and acquisition specialist at the consulting firm Informed Partners. The companies are based in Salt Lake City, have operated over approximately the same period of time, know each other well, and some executives have worked at both companies.

Osberg believes there is instant value in the deal, which gives Health Catalyst a bigger footprint in provider communities that use Medicity as their HIE vendor. 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.

Medicity also serves several states and large corporations, which gives Health Catalyst additional inroads to new clients. In all, Medicity is in 1,000 hospitals, has 250,000 end users and operates 20 regional and statewide HIEs. “Health Catalyst now has a much expanded footprint in the healthcare IT world,” Osberg adds.

The pending combination of Health Catalyst and Medicity is primed to support corporate America, says Mike Mytych, owner of Health Information Consulting LLC in Menomonee Falls, Wis.

Also See: Wyoming forms HIE to improve patient info exchange in state

Health Catalyst knows that without an HIE, the company would be at a disadvantage, Mytych contends. With Medicity, it gets more provider and employer clients and a toolset of analytics to offer. And, Aetna, the current owner of Medicity, has claims data that can be analyzed.

Corporations want their employees to be in accountable care organizations, and they want good healthcare experiences for their employees, and ACOs make up a large segment of Health Catalyst’s clients, according to Mytych. Consequently, employers are contracting directly with providers to operate as a clinically integrated network.

Hospitals have their own needs that the combination of Health Catalyst and Medicity could tackle, Mytych adds. In addition to a more stable electronic health records strategy, hospitals hoping to succeed in accountable care will need strong analytics—which Health Catalyst offers—and strong connectivity for providers and patients, which Medicity can bring. The bottom line, Mytych adds, is that “population health doesn’t work well without an HIE.”

Hospitals using a combined technology package from both vendors will be able to operate as a virtual HIE while also tracking such metrics as utilization, consumption of care, management of referrals, patient risk stratification and gaps of care, Mytych explains.

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