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Report: Health IT Venture Capital Funding Increases to $5.1 Billion in 2016

March 6, 2017
by Heather Landi
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In 2016, venture capital funding, including private equity and corporate VC, in the healthcare information technology (health IT) sector totaled $5.1 billion in 622 deals, a new record for the sector, according to an annual report from Austin, Texas-based Mercom Capital Group.

Mercom Capital Group, a global research and communications firm, recently released its “2016 Q4 and Annual Health IT Funding and M&A (mergers and acquisitions) Report,” for the healthcare IT and digital health sector. According to that report, venture capital funding in the health IT sector grew 9 percent year-over-year, to $5.1 billion compared to $4.6 billion raised in 574 deals in 2015. Corporate funding in health IT companies—including debt and public market financing—came to $5.6 billion, down 30 percent from 2015’s $8 billion.

Since 2010, the sector has received $18.5 billion in VC funding in 2,672 deals and about $7.5 billion in debt and public market financing (including IPOs), bringing total healthcare IT funding to $26 billion, according to the Mercom Capital press release about the report.

“Venture Capital funding bounced back after declining in 2015,” Raj Prabhu, CEO and co-founder of Mercom Capital Group, said in a prepared statement. “Digital Health public companies on the other hand continue to struggle.”

Drilling down in the sector, healthcare practice-focused companies raised $1.6 billion in 185 deals, accounting for about 32 percent of the total funding. That 1.6 billion is up from the $1.5 billion raised in 171 deals in 2015.

Consumer-centric companies raised about $3.5 billion in 437 deals, accounting for 68 percent of the total funding raised, and up from $3.1 billion in 403 deals in 2015.

The top funded areas in 2016 were:

  • mobile apps – $1.3 billion
  • wearable sensors – $592 million
  • data analytics – $574 million
  • telemedicine – $528 million
  • mobile wireless – $228 million
  • wellness – $218 million

Looking at the top VC funding rounds in 2016, the Mercom Capital report rounded up the top five—Ping An Good Doctor-$500 million; Chunyu Yisheng-$183 million; Flatrion Health-$175 million; Jawbone-$165 million, and Meet You-$151 million.

The average deal size in 2016 was $8.1 million, similar to 2015.

Thirty-five countries saw healthcare IT VC funding deals in 2016 compared to 27 in 2015. Within the United States, California companies continued to receive the most funding with $1.3 billion in 143 deals. New York was second with $440 million in 49 deals.

Mercom Capital also reports that a total of 1,115 investors (including accelerators/incubators) participated in healthcare IT VC funding in 2016 compared to 923 in 2015 Top VC investors in 2016 were Khosla Ventures (seven deals), then GE Ventures, Social Capital, and BlueCross BlueShield Venture Partners (six each), the report stated.

There were 22 accelerators and incubators who participated in 83 deals in 2016, compared to 2015 which had 55 deals involving 14 accelerators and incubators.

The report also looks at 2016 M&A transactions and health IT M&A activity dropped to 205 in 2016 compared to 219 in 2015.

Health information management (HIM) companies were involved in 89 M&A transactions in 2016, followed by mobile health companies (26), data analytics companies (19), telehealth and personal health companies with 18 each, and scheduling, rating and comparison shopping companies with 12.

According to the report, the top five disclosed M&A transactions in 2016— Pamplona Capital Management’s $2.75 billion acquisition of MedAssets, followed by the $2.6 billion acquisition of Truven Health Analytics by IBM. The third largest M&A transaction was the $2.35 billion acquisition of Press Ganey Associates by EQT Equity fund EQT VII, followed by the $950 million acquisition of Netsmart Technologies by Allscripts & GI Partners. Finally, bringing up the top 5 was the $820 million acquisition of Verisk Analytics' healthcare services business from Verisk Health (Verscend) by Veritas Capital.

Further, Mercom Capital reports that debt and public market financing for healthcare IT companies fell to $533 million in 18 deals last year, compared to $3.4 billion in 29 deals in 2015.

Last year, four IPOs raised a combined $234 million, while seven IPOs in 2015 raised a total of $2.2 billion. NantHealth raised $91 million, Tabula Rasa HealthCare raised $51.6 million, Oneview Healthcare raised $46.5 million and Senseonics raised $45 million.

 

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ASCO Picks IBM Watson Exec to Lead CancerLinQ

August 10, 2018
by David Raths
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Big data platform collects and analyzes data from cancer patients at practices nationwide

The American Society of Clinical Oncology (ASCO) has named a former IBM Watson executive as the new CEO of its CancerLinQ big data platform.

Cory Wiegert was most recently vice president of product management for IBM Watson Health. Prior to joining IBM, Wiegert held positions with Sterling Commerce, Siebel Systems Inc., Centura Software and Safety-Kleen.

Kevin Fitzpatrick stepped down as the nonprofit CancerLinQ’s CEO in April 2018. Richard Schilsky, M.D., who was serving as interim CEO of CancerLinQ, will continue his role as ASCO's chief medical officer.

CancerLinQ collects and analyzes data from cancer patients at practices nationwide, drawing from electronic health records, to inform and improve the quality of cancer care. Its database contains more than a million cancer patient records. The effort has two major components:

• The CancerLinQ quality improvement and data-sharing platform for oncology practices,

• CancerLinQ Discovery, which provides access to high-quality, de-identified datasets derived from the patient data to academic researchers, non-profit organizations, government agencies, industry, and others in the oncology community.

CancerLinQ LLC also has established a number of collaborations with government and nonprofit entities -- including American Society of Radiation Oncology, Food and Drug Administration, and the National Cancer Institute -- as well as industry through its collaborators AstraZeneca, Tempus, and Concerto HealthAI.

In a statement, ASCO CEO and CancerLinQ LLC Board of Governors Chair Clifford A. Hudis, M.D., said Wiegert’s arrival “comes at a pivotal time, as we are quickly building on and improving CancerLinQ's core quality improvement platform for oncologists and data analytics services for the broader cancer community."

As CEO, Wiegert will be tasked with developing new solutions to help oncology practices improve the day-to-day care they provide their patients and continuing to serve CancerLinQ collaborators.

 

 

 

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A ‘Google’ for Clinical Notes Draws Interest

August 8, 2018
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Developed at the University of Michigan, EMERSE allows users to search the EHR’s unstructured clinical notes
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Those of us who cover healthcare informatics often hear clinicians and researchers talk about the problems involved in doing analytics or research on unstructured data in clinical notes. That was why I was intrigued when I saw that informatics teams at the University of North Carolina School of Medicine are implementing a tool called EMERSE (Electronic Medical Record Search Engine), which allows users to search free-text clinical notes from the electronic health record (EHR). They describe it as being like "Google" for clinical notes. 

But then I noticed that the tool was actually created quite a while ago, in 2005, at the University of Michigan, and has been in use there ever since. So I reached out to its developer, David Hanauer, M.D., a clinical associate professor of pediatrics and communicable diseases at the University of Michigan Medical School. He also serves as assistant director for clinical informatics in UM’s Comprehensive Cancer Center’s Informatics Core as well as associate chief medical information officer at the UM Medical Center.

Hanauer told me that the developers of EMERSE at Michigan have a grant from the National Cancer Institute to further develop the tool and help disseminate it, with a focus on cancer centers around the country. “We are about one year into the grant,” he said. “We have spent the last year cleaning up the infrastructure to make it even easier for people to adopt. We have been working hard on technical documentation. When we started it, we had almost no documentation; now we have substantial and detailed documentation about how to implement and run it.”  

The five sites implementing EMERSE as part of the grant are the University of North Carolina, University of Kentucky, University of Cincinnati, Case Western Reserve University and Columbia University.

I asked Hanauer if health systems continue to struggle with unstructured data in clinical notes. “They all absolutely struggle with it,” he said. “They have mostly been ignoring it, to tell you the truth. That is why we believe and hope EMERSE will fit well into this environment of people needing different tools.”

I also asked him to describe some of the use cases. Most generically, anybody who needs to look through the chart and doesn’t know exactly where to look can get benefit from it, he said. He described three categories of users: research, clinical care and operations. “For example, in research you could use it for cohort identification. You want to find patients who meet your needs when it comes to a research study. This is important in part because ICD codes, the go-to way people often try to identify a cohort, are often inaccurate and non-specific.”

According to the EMERSE web site, for studies in which eligibility determination is complex and may rely on data only captured within the free text portion of documents, EMERSE can be a rapid way to check for mentions of inclusion/exclusion criteria.

In another example, EMERSE also can be used to help find details about a patient rapidly, even during a clinical visit. “For example, if a patient mentions that a certain medication helped their migraine three years ago but can’t remember the name, just search the chart for 'migraine' and find that note within seconds,” the web site notes. Cancer registrars can use EMERSE for data abstraction tasks, including difficult-to-find information such as genetic and biomarker testing.

Hanauer said at Michigan, clinicians have a way to access EMERSE from their Epic EHR. “If you have a patient’s record open, you can click a button, it will log you into EMERSE and bring that patient’s context over, and you can start searching in just of a few seconds.”

In 2005, the platform was written to work with a homegrown EHR. When UM transitioned to Epic in 2012, Hanauer and team used that as an opportunity to make it more powerful. “When we went live with Epic, it became clear there were some architectural limitations that were probably going to limit the future power of the software,” he recalled. “We leveraged the design and concepts and rewrote it from scratch. But even though we were going to work with Epic, we designed it specifically so it would not be tied to any particular EHR.”

Because it deals with patient records, security and audit logs have to be taken very seriously. Every time you log into EMERSE, you come to an attestation page. “You have to declare why you are using it for this session,” Hanauer explained. “We have tried to make it as simple as possible. Almost every institution that does research now has an electronic IRB system, so we have a way you can pull a user’s IRB-approved study into the EMERSE database, and a list appears of that user’s studies only. The user can click on it, record that use, and move forward.” There also are quick buttons for common administrative use cases.

I asked Hanauer if other academic medical centers had developed similar search tools. He said some have created local tools. “The main difference with EMERSE is that it is proven it can work elsewhere. (It was used at the VA in Ann Arbor, Mich., on the VistA system.) “We have a long track record of use and have been working on the infrastructure to disseminate it,” he said. “We are giving it away at no cost, but it is almost like running a software company, where you have to have a web site, user documentation, and system administrator documentation. To me, it doesn’t make a lot of sense for others to reinvent the wheel when this is something we have invested millions of dollars in at this point.”

He stressed that although the grant project is focused on five cancer centers, they are giving the software away at no cost, and are glad to help anybody interested in getting it up and running. “One of the key challenges is that the users can’t control whether it gets deployed or not,” he said. “Our biggest challenges is not the users, who are contacting us and asking us for it, but getting this through local IT leadership, and that is a big hurdle.”

Why would CIOs be opposed to deploying this tool? “I think their plates are full and a lot of times people are looking for vendor solutions,” he surmised.  “I also think that often people don’t understand what the issues are. Some people think they will just get some off-the-shelf NLP software. But I can assure you that that software will not be able to do the kinds of things that EMERSE can do. That is partly because a lot of medical documents are not in natural language. Medical documents are anything but. They are a mess.”

 

 

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Anthem Expands $500M Deal with IBM with Focus on IT Automation, AI

July 26, 2018
by Heather Landi
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Health insurer Anthem has expanded its services agreement with technology leader IBM with a focus on using artificial intelligence (AI) and automation to improve operational efficiency and modernize technology platforms.

With this collaboration, Armonk, New York-based IBM and Indianapolis-based Anthem, one of the largest U.S. health insurance coampnies, will work together to help drive Anthem’s digital transformation and deliver an enhanced digital experience for its nearly 40 million consumers, Anthem said in a press release.

In 2015, Anthem entered into a five-year, $500-million-dollar strategic technology services partnership with IBM in which the technology giant provided operational services for Anthem’s mainframe and data center server and storage infrastructure. As part of that agreement, Anthem has been able to leverage IBM Cloud solutions to increase the ease, availability and speed of adding infrastructure to support new business requirements, the company said.

Under the expanded agreement, IBM will provide Anthem with enterprise services for its mainframe and data center server and storage infrastructure management. In addition, IBM will work with Anthem towards creating an AI environment which will allow for an automated infrastructure providing 24/7 digital capabilities. This will bring greater value and access to Anthem's consumers, care providers, and employees, Anthem said.

IBM and Anthem will also continue to work together on IT automation. Since 2015, the two companies’ have implemented over 130 bots, automating over 70 percent of the monthly high volume repetitive tasks. This includes bots that can identify when a server is reaching capacity to shift workloads to other less utilized servers ensuring that work is not impacted. This capability has improved systems availability as well as freed up resources to work on higher-value projects, Anthem said in a press release.
 
“We are seeing a dynamic change in the healthcare industry, requiring us to be more agile and responsive, utilizing advanced technology like AI to drive better quality and outcomes for consumers,” Tim Skeen, senior vice president and chief information officer, Anthem, Inc., said in a statement. “Our continued strategic partnership with IBM will help establish a stronger foundation for Anthem to respond to the changing demands in the market, deliver greater quality of services for consumers and help accelerate Anthem’s focus on leading the transformation of healthcare to create a more accessible, more affordable, more accountable healthcare system for all Americans.”

“The collaboration between IBM Services and Anthem has already laid the groundwork to improve healthcare processes and quality,” said Martin Jetter, senior vice president, IBM Global Technology Services. “Our latest agreement will accelerate Anthem’s growth strategy and continued leadership as one of the largest healthcare insurance companies and provide a solid path to bringing new efficiencies in driving digital transformation.”
 

 

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