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Taking a Deeper Dive into the Healthcare Informatics 100

May 25, 2016
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Early on in 2016 when the team at Healthcare Informatics started discussing ways to enhance our Healthcare Informatics 100 list—a compilation of the top health IT companies based on HIT revenues from the most recent fiscal year—there was a common desire amongst the editorial and marketing teams, and, other leaders at our company to make this year more about healthcare IT thought leadership. After all, it’s the vendor community’s knowledgeable leaders that in so many ways impact how the health IT landscape shifts.

HCI hit the ground running with this notion at the Healthcare Information and Management Systems Society (HIMSS) conference in Las Vegas earlier this year, setting up on-site video interviews with various thought leaders from vendors that made last year’s list. The videos were a huge hit across the industry, as vendor executives answered questions about the most significant trends that are currently impacting the health IT environment. For those companies that did partake in this process, their videos were featured with their listing this year.

What’s more, for the first time ever, vendors were asked to estimate the percentage of revenue earned in all of their product segments. The product segment breakouts were displayed in pie chart form, as were the percentages of the major revenues served by each company (example below). We plan to do more breakout lists in June based on the product percentage data that vendors offered us, so stay tuned!

In addition, thanks to some great work by the Healthcare Informatics web team, we were able to show year-over-year revenue changes for each company that filled out the appropriate data. The Healthcare Informatics 100 list is undoubtedly a unique industry offering, and has been compiled for more than 20 years, but we think that these enhanced visual features make for a much better reader experience, and also more accurately depicts the trends that we are seeing in the HIT marketplace.

Now, onto the list! As of Monday, May 23, all 100 company listings have been made public on our website. We released the list in quartiles this year, so there indeed was a level of anticipation among the vendor community that we haven’t seen in prior years. But now that the list is complete, let’s dive into some of the details of this year’s compendium.

Staying strong at #1: As noted in last year’s Healthcare Informatics 100 odds and ends blog, last year marked the first time that, on top of including provider-based revenue that they have historically listed, vendors also were able to include health IT revenue derived in the payer, health information management, employer, and vendor-to-vendor markets as well. Optum, a consulting and analytics division of the country's largest health insurer, UnitedHealth Group, certainly benefitted from that major change, and did so once again this year, with a revenue of nearly $6.2 billion, by far the highest ever on our list. This number represents a nearly $1 billion jump from last year’s revenue, which also ranked #1.

The health IT giants…remain giants: We all know who the biggest names are in healthcare technology. In fact, you pretty much just have to look our top quartile of companies to see the familiar names, with 26 companies this year with an HIT revenue of more than $500 million. It’s interesting to see that just about all of the top companies on this year’s list were also at the top of last year’s list, and previous lists before that. The general trend of the Healthcare Informatics 100 is that the big names flex their virtual muscles. To this end, I point you to our Most Interesting Vendor stories, where we profiled three companies ranked in the top quartile of the list, taking a deeper look at what made 2015 so interesting for each of them. The stories of Leidos, Nuance, and athenahealth can be seen here.

Risers and fallers: Ever year it’s fascinating to take a look at the companies who moved up or down the list in a significant way. Of course, the ranking number alone doesn’t tell the whole story of why a certain vendor moved one way or the other, but it’s definitely worth looking at. This year, the biggest risers (of companies that were on both the 2016 and 2015 lists) were: Sharecare, moving up 21 spots from #94 to #73 (our industry consultants estimated its revenue at $110 million, compared to $63 million for last year); Aesynt, moving up 18 spots from #69 to #51 by doubling its revenue from $100 million to an estimation of $200 million; EPAM Systems, rising from #98 ($61 million) to #84 ($86 million);and Burwood Group, jumping up 12 spots from #91 to #79, with a revenue increase of $68 million to $99 million.

The biggest drops were from Zynx Health, just sneaking onto this year’s list at #100 with an estimated revenue of $55 million, compared to $82 million last year, when it ranked #80; CTG, which fell 16 spots from #76 to #92, seeing its reported revenue drop from $92 million to $67 million; and finally, Orion Health, dropping 11 spots from #63 in 2015 ($123 million) to #74 this year ($107 million).

Interestingly, no company in the top half saw a significant enough rise or drop in its revenue to be part of the above grouping. This speaks to a trend of a lot more activity in the lower half of the list, meaning some of the up and comers who just fell short could very well be part of the list in future years. What’s more, I should note that this riser/faller group is based on ranking on the list—not revenue. So a vendor such as Optum, which increased revenue by nearly $1 billion year-over-year, does not qualify since its ranking (#1) did not change.

Lots of activity: A big part of why HIT companies might rise or fall depends on mergers and acquisitions (M&A) from the previous year. I won’t get into too much detail here, as the HCI team has put together some terrific content exclusively related to health IT M&A over the last week. First, ST Advisors, the consulting team with decades of business M&A experience that helps us with research and analysis for the list, wrote an in-depth piece about how value-based care was a common theme in much of the M&A activity from 2015. The ST Advisors authors write, “While perhaps a tad over-hyped at this point, the transformation of healthcare reimbursement from “volume to value” has finally begun to logically align stakeholders throughout the healthcare landscape, and during 2015, we saw evidence of the industry progressing further along the value-based care continuum.”

Then, HCI Editor-in-Chief Mark Hagland further interviewed ST Advisors’ senior executives about deeper trends they saw in the marketplace; and finally, Hagland summed it all up in a blog, in which he noted, “…though the senior executives of healthcare IT vendor companies are not focused on supporting healthcare system reform per se—instead, they are totally focused on improving their organizations’ bottom lines and strategic profiles—as the U.S. healthcare system shifts, so are vendors. Thus, the ‘big box’ EHR vendors are working quickly to fill in missing areas of capabilities in such areas as population health management, data analytics, clinician workflow, and interoperability. And in some cases, recognizing that it may be both easier and smarter to buy rather than build, they’re buying.”

Old and young: Founded in 2012, Caradigm is officially the youngest company on the Healthcare Informatics 100 list, while Elsevier, founded in 1880, and is now 136 years old, is the company that has been around longest.

With that, we sincerely hoped you enjoyed the 2016 Healthcare Informatics 100 list and all of its enhanced features. We look forward to your continued participation.

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