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Most Interesting Vendor 2012: MedeAnalytics

June 20, 2012
by Mark Hagland
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Great Timing for a Smart Company: As analytics becomes all-important, a highly capable data analytics firm is well-positioned for the future

At a time when analytics capability will be critical for patient care organizations in everything their leaders attempt—meeting meaningful use requirements under the HITECH program, satisfying a dizzying array of mandates under healthcare reform-driven programs, stepping up to participate in rigorous new voluntary programs for accountable care, bundled payments, and the patient-centered medical home—could any IT vendors be better-positioned than those specializing in analytics and business intelligence? Hardly.

So it’s not surprising that the folks at MedeAnalytics are seeing their Emeryville, Calif.-based company riding high these days. In fact, when MedeAnalytics, first founded as an EDI claims processing firm back in 1993, first began to make real industry waves about a decade ago, it was as a back-office revenue cycle management solution provider. But over time, the firm’s executives had the prescience to expand their mission and capabilities to help hospital and medical group leaders not only engage in analytics around financial data, but also around clinical data.

As a result, MedeAnalytics has been growing rapidly in the past couple of years, and its senior executives see a strong growth trajectory going forward. The company is privately held, so it doesn’t report financials; however, Healthcare Informatics estimates the firm’s 2011 U.S. revenues at approximately $70 million, representing strong recent earnings growth. In terms of customers, MedeAnalytics now has more than 850 customers, including both payers and providers, and stretching across the U.S. and in the UK, Ken Perez, senior vice president of marketing, reports.

Mike Gallagher

But it’s the larger vision of where things are going that has MedeAnalytics’ senior executives so excited about the future. “I think what will transform healthcare over the next decade is analytics; and we live to fulfill that mission,” says Mike Gallagher, the company’s chairman and CEO. “Our gig, so to speak, is the aggregation of disparate data sets, putting them in a hosted model, and delivering them through the web to healthcare executives in a HIPAA-compliant manner. Dr. Fouts, our chief medical officer and a co-founder, calls it ‘data democracy,’” Gallagher adds. “And we work with both providers and payers.” 

Bridging Healthcare Sectors

Importantly, the fact that MedeAnalytics bridges the payer and provider sectors in healthcare could well be its strongest calling card, as new reimbursement and care management models such as accountable care organizations, bundled payments, and patient-centered medical homes, emerge under healthcare reform and payer and purchaser initiatives.

Just ask Juan Davila, vice president of provider network management at the San Francisco-based Blue Shield of San Francisco. Over the past few years, Davila has been spearheading private-sector accountable care contracts with several different collaboratives of hospitals and medical groups in Northern, Central, and Southern California (with six live so far), with such well-known provider organizations as Hill Physicians Group, Dignity Health (formerly Catholic Healthcare West), California Pacific Medical Center, and Brown and Toland Medical Group.

“They’re very customer-centric,” Davila says of the MedeAnalytics folks. “I got everything I was thinking about.” What Davila is referring to is his request that MedeAnalytics build his organization a customized, from-scratch, data analytics system for a process to lower the percentage of denied provider claims. That tool has proven to be a wild success, lowering what had been an average 30-percent claims denial rate to a rate under 15 percent, and dramatically improving trust between Blue Shield and the providers in its network.

Meanwhile, on the provider side, Dominic Segalla has equal praise to lavish on MedeAnalytics as a vendor partner. Segalla, senior vice president of Newark Beth Israel Hospital in Newark, N.J. (part of the Barnabas Health system, also Newark-based), has actually been working with MedeAnalytics as a CFO for nearly five years; he began as a customer when he was at St. Vincent’s Hospital in Manhattan, and brought MedeAnalytics with him as a vendor partner when he came to Newark Beth Israel a year ago. Using the company’s Patient Access Intelligence solution, its patient registration software, has helped his organization to significantly improve point-of-registration payer authorization verification, Segalla notes. And he and his colleagues have just started using MedeAnalytics’ revenue cycle solution as well.

Ken Perez

In the end, part of MedeAnalytics’ success has come about partly because of its executives’ ability to anticipate change. “You can call us prescient, or you can call us lucky,” Gallagher says with a chuckle. “It’s hard work, and planning meets opportunity, and you can call that luck.” He sees two very bright beacons going forward. First, is the fact that the company is already benefiting from having moved to a software-as-a-service (SaaS), hosted model, based on the fact that, as he puts it, “We felt that the license-and-install model was not sustainable over the long haul, but rather that the hosted model, the software-as-a-service model, was superior.” Second, of course, is having strongly niched the company as a data analytics firm. As healthcare moves forward into a new, more collaborative era, with new reimbursement and organizational models, it’s a fairly safe bet that smart companies like this one will do well going forward. ◆

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