Allina Health in Minnesota and western Wisconsin has outsourced its data analytics operations not because it needs more help, but because it fears that increasing revenue pressures and falling margins over time could result in analytics being under-invested, says CFO Duncan Gallagher.

Allina, with 12 hospitals and more than 90 clinics, is proud of the analytics program it started in 2007 with a couple consultants who soon after formed analytics vendor Health Catalyst, as the program has improved outcomes, cost efficiencies and patient satisfaction, Gallagher notes.

In 2008, the delivery system became the first client of Health Catalyst, using the vendor’s technology while building a formidable in-house analytics team that now has about 70 members. How, however, Allina has outsourced the analytics operations to the vendor with the team members becoming Health Catalyst employees under a 10-year, $100 million contract. The vendor could earn bonus payments for meeting performance metrics. Allina also will get additional analytics tools including dashboards and report cards that will supplement the technology platform it already has.

Health Catalyst, Gallagher says, has core competencies and access to capital that will ensure that Allina’s analytics platform is not under-invested. The decision to outsource “was just recognition of that reality and the relationship we have with Health Catalyst.”

Under the arrangement, Allina will “save a little bit” of money during the first three years of the contract, but that was not a driver of the deal, according to Gallagher. The driver was more stability and a platform that continues to grow.

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