Skip to content Skip to navigation

HIT Venture Capital Funds Saw Huge Gains in 2011

January 18, 2012
by Gabriel Perna
| Reprints

Mercom Capital Group, llc, an Austin-Texas-based communications and consulting firm, released its annual and fourth quarter merger and acquisition (M&A) and funding report for the healthcare technology sector for 2011.  According to Mercom, nearly half a billion dollars came into the sector through venture capital investment compared to $211 million in 2010.

“2011 was a great year for Healthcare IT companies in terms of financial activity,” Raj Prabhu, managing partner of Mercom Capital Group, said in a statement. “Several factors, including strategic acquisitions, consolidation and increasing market share, played a role in the increased M&A activity in the sector.”

Health information management companies received most of the disclosed venture capital funding in 2011, totaling $336 million in 30 deals.  Personal health record companies raised $83.3 million in 12 deals. The top venture capital funding deal in 2011 was $75 million, in a Series C round, raised by online doctor appointment startup ZocDoc.

Other top VC funding deals were $27 million raised by Awarepoint, a provider of real-time location systems, $27 million raised by ABILITY network, a web-based healthcare network, followed by $23 million raised by Humedica, a clinical informatics company and $23 million raised by Practice Fusion, a web-based EMR company (Practice Fusion also raised another $6 million in additional funding in 2011).

Merger and acquisition (M&A) activity was robust in 2011 with 104 recorded transactions totaling $6 billion, compared to $4 billion in 85 transactions in 2010.  Health information management (HIM) companies accounted for most of the M&A transactions with 61 transactions, followed by 19 transactions for revenue cycle management (RCM) companies and 16 transactions for service providers. In terms of dollars, RCM companies accounted for $3.9 billion, followed by HIM companies with  $1.9 billion. 

The top M&A transaction in 2011 was the acquisition of Emdeon, a provider of revenue and payment cycle management and clinical information exchange solutions, by Blackstone Capital Partners for $3 billion.



ONC National Coordinator Gets Live Look at Carequality Data Exchange

Officials from Carequality have stated that there are now more than 150,000 clinicians across 11,000 clinics and 500 hospitals live on its network. These participants are also able to share health data records with one another, regardless of technology vendor.

American Red Cross, Teladoc to Provide Telehealth Services to Disaster Victims

The American Red Cross announced a partnership with Teladoc to deliver remote medical care to communities in the United States that are significantly affected by disasters.

Report: The Business of Cybercrime in Healthcare is Growing

While stolen financial data still has a higher market value than stolen medical records, as financial data can be monetized faster, there are indications that there is ongoing development of a market for stolen medical data, according to an Intel Security McAfee Labs report.

Phishing Attack at Baystate Health Potentially Exposes Data of 13K Patients

A phishing scam at Baystate Health in Springfield, Mass. has potentially exposed the personal data of 13,000 patients, according to a privacy statement from the patient care organization and a report from MassLive.

New Use Cases Driving Growth in Health Data Exchange through Direct

In an update, DirectTrust reported significant growth in Direct exchange of health information and the number of trusted Direct addressed enabled to share personal health information (PHI) in the third quarter of 2016.

Insurers to CBO: Consider Private Insurers’ Data in Evaluations of Telemedicine

Eleven private insurers, including Aetna, Humana and Anthem, are urging the Congressional Budget Office (CBO) to consider the experience of commercial insurers when evaluating the impact of telemedicine coverage in Medicare.