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Healthcare IT M&A Activity Increases 23 Percent in 1H 2018

July 30, 2018
by Heather Landi
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Mergers and acquisitions (M&A) activity in the healthcare IT industry rose during the first half this year, with volume increasing 23 percent, from 101 deals in the second half of 2017 to 124 deals so far in 2018, according to investment banking firm Berkery Noyes.

The firm’s first half 2018 M&A trend report examines deals in the healthcare and pharmaceutical information and technology industries.

The industry’s largest sponsored transaction in the first half of 2018 was Veritas Capital-backed Verscend’s announced acquisition of Cotiviti, a provider of payment accuracy and analytics driven solutions, for $4.82 billion. Veritas Capital also completed another deal in the top ten list during the half year period with the announced acquisition of the value-based care division from GE Healthcare for $1.05 billion, according to the report.

Seven of the industry’s top ten largest deals year-to-date occurred in the healthcare IT segment.

Overall, for the pharma and health IT industries, total M&A transaction volume in 2018 declined by three percent over the second half of 2017, from 239 to 232.

Total transaction value in the first half of 2018 rose by 54 percent over the second half of 2017, from $13.63 billion to $20.93 billion, according to the report.

The median revenue multiple, after rising from 1.9x in the first half of 2017 to 3.0x in the second half of 2017, declined to 2.3x in the first half of this year. During the last 30 months the median revenue multiple was 2.1x.

Berkery Noyes tracked 1,154 healthcare and pharma IT transactions between 2016 and the first half of 2018, of which 244 disclosed financial terms, and calculated the aggregate transaction value to be $72.62 billion. Based on known transaction values, the firm projects values of 910 undisclosed transactions to be $9.22 billion, totaling $81.83 billion worth of transactions tracked over the past two and a half years.

 

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In Texas, Healthcare Leaders Take a Tech-Enabled Approach to Combat the Opioid Crisis

September 28, 2018
by Heather Landi, Associate Editor
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In many ways, emergency physicians across the country are at the front lines of the battle against opioid abuse and addiction, as patients who are abusing or addicted to opioids are frequent users of emergency care.

The ED is often a hospital “entry point” for addicted patients, who present in the ED asking for prescription opioids to manage pain, or patients who are overdosing may arrive for treatment or are experiencing related crises. A significant challenge facing the healthcare industry in trying to combat opioid addiction is the lack of real-time information available at the point of care to alert emergency physicians about a patient’s medication use and history of ED visits.

Armed with real-time information about patients’ and their opioid use, physicians can provide referrals for substance abuse treatment or case management, rather than duplicating medical tests performed at another hospital. Tied in with the issue of opioid addiction, but also separate from it, excessive use of ED care is an ongoing problem facing hospitals and health systems as high users of ED care often have underlying social, mental or substance abuse problems that require care coordination and healthcare services provided outside of a hospital.

Healthcare leaders in Texas recently took steps to address many of these challenges facing hospital ED care teams by working with Salt Lake City-based company Collective Medical to give care teams throughout the state access to the Collective network and care coordination platform. The Texas Hospital Association (THA), which represents more than 85 percent of the state’s acute care hospitals and healthcare systems, or about 486 organizations, announced a partnership with Collective Medical back in May that will enable ED care teams in member hospitals to have access to an information exchange for more actionable information at the point of care.

While Texas is not the hardest-hit state in the opioid epidemic, the number of people in Texas dying from an overdose of opioids continues to grow. In 2016, there were 1,375 opioid-related overdose deaths­­­ in Texas, a rate of 4.9 deaths per 100,000 persons compared to the national rate of 13.3 deaths per 100,000 persons, according to the National Institute on Drug Abuse.

According to Collective Medical, the Emergency Department Information Exchange (EDie) platform will enable care teams in Texas hospitals to more rapidly identify complex patients in real-time with notifications and actionable care plan information. Through the platform, which integrates with electronic health record (EHR) systems, providers also gain insights into their patients, such as prior ED utilization, social determinants, prescription histories and advanced directives, which enables provide to make informed decisions regarding medically unnecessary admissions and readmissions.  

“Collective is proven to improve patient outcomes in states across the country, and it is an invaluable tool for hospitals combating the opioid epidemic,” Ted Shaw, THA president and CEO, says. Shaw adds that deploying the Collective platform is just the first step to connecting all the caregivers at various point in the continuum of care. “We want to make sure that whether it be in the ER, or in the outpatient setting, within the hospital or between two hospitals, that there is a connectivity that results in actionable information, that sends alerts, and puts information in front of caregivers that allows them to make informed decisions.”

The partnership also supports THA’s recent voluntary guidelines for hospital ED prescribers of opioids, Shaw says. “One challenge with the opioid crisis in Texas is the need to capture information and look at the prescribing patterns out there, and then share that information appropriately in a HIPAA compliant fashion. This system is one that would do that,” he says.

Heather Marshall, M.D., a Texas-based ED physician and president of the Southwest Region for Alteon Health, a physician-led company that provides management and ED staffing services for hospitals, says the technology platform has been a “gamechanger” for ED clinicians in organizations where it’s been deployed.

When ER clinicians have access to real-time information about their patients, including medical histories, ER visits and prescriptions, it enables clinicians to provide better patient care and creates more operational efficiency, Marshall notes. “Instead of taking me two hours to figure out what’s going on with the patient, I have the information in 15 minutes. We can then provide the appropriate care to the patients, and by turning patients more quickly, we create operational efficiency as we can care for more patients.”

She continues, “We have people who have opioid problems and are simply accessing ER departments in good faith because they are not feeling well, but the solution to their problems isn’t necessarily that they need another CT scan, the solution to their problem is that they need treatment and they need to deal with the underlying disorder,” she says, noting that the ED network is a “win for everybody.” We get better operational efficiency when we’re not having to repeat workups and we’re able to get patients follow-up care.”

Marshall recently moved to Houston, but also currently continues to practice emergency medicine in New Mexico, where she previously lived. Marshall is familiar with Collective Medical’s ED network and care coordination platform as a result of her previous emergency medicine work both in New Mexico and in Washington State, where the technology has been deployed. The benefits of the Collective network also havespread by word-of-mouth among ED physicians.

About 10 years ago, many practicing clinicians in Seattle hospitals were recognizing the growing problem of opioid abuse and overdoses, according to Marshall. “Many of the practicing clinicians had identified issues with care coordination and lack of interoperability between EHRs. We felt it day-to-day, but we didn’t have data to move things. In 2007, the levers shifted, and we were able to identify that we had a health emergency on our hands and we needed a different set of tools,” Marshall says.

Several hospital ER departments in Seattle initially piloted Collective Medical’s EDie platform, and the platform was then rolled out across most of the state as part of a statewide collaborative effort to address overutilization of ED services. That effort was spearheaded by the Washington State American College of Emergency Physicians, the Washington State Medical Association and the Washington State Hospital Association. The initiative, called “ER is for Emergencies,” deployed seven best practices, one of which centered on interoperable health information exchange. As part of that effort, the collaboration engaged with Collective Medical to deploy its EDie technology. Other best practices focused on development of patient care plans, participating in prescription monitoring programs and patient education on appropriate ED use, Marshall notes.

According to a Brookings Institute study of the Washington State “ER is for Emergencies” program, the state saved $34 million in emergency department costs and Medicaid ED visits declined 10 percent in its first year of use in 2013. Likewise, care teams across the state have reduced opioid prescriptions coming out of the ED by 24 percent since the program’s inception.

A similar effort was rolled out in in the state of New Mexico in 2016 through a collaboration between the New Mexico Hospital Association, UnitedHealth Group, Molina Healthcare, Blue Cross Blue Shield and Presbyterian Healthcare Services. Collective Medical is currently partnered with more than a dozen state hospital associations and more than 550 hospitals in 13 states, from Alaska to Massachusetts, have deployed the company’s software and have joined the ED network. The technology platform is endorsed as a best practice for emergency medicine by the American College of Emergency Physicians.

According to Collective Medical, use of the network has improved care collaboration in healthcare organizations across the country. CHI St. Anthony’s Hospital, a critical access hospital located in Pendleton, Oregon, was able to reduce unnecessary ED visits from identified frequent ED users from 17 percent of overall visits to nine percent within six months of implementing the Collective platform. Within one year, the hospital reduced narcotic prepack prescriptions coming out of the ED by 60 percent and realized hospital cost savings of $200,000, the company says.

Even with widespread use of EHRs and health information exchanges (HIEs), Marshall says there are often gaps in real-time information about a patient’s medical history and a technology solution, such as the Collective Medical platform, can help to fill those gaps

“It’s a difference between push and pull,” she says, noting that an ER physician typically needs to have a concern about a patient or a suspicion that a patient has recently been to another ER in order to query the EHR or HIE. “You’re really dependent on making a judgment about a patient or them disclosing information. That’s a pull; I have to go and ask for information,” she says. “What Collective Medical Technologies is doing is their system is a push system. Every state or organization sets the trigger threshold for what they are looking for. The ER doctors can set the trigger threshold so that if a patient has been to a local ER, let’s say five or six times in the last 12 months, the system pushes that notification to the physician.”

A Collective Effort to Combat the Opioid Crisis

There are efforts at the hospital, community, state and federal level to address the growing problem of opioid misuse, abuse and addiction. Last week, the U.S. Senate passed The Opioid Crisis Response Act of 2018, which includes numerous important health IT provisions. The House passed its version of the legislation in June, and a committee to reconcile the differences between the two is nearing a resolution.

While the opioid crisis has gained attention in the past few years, Marshall says the problem of opioid abuse and addiction has been building for two decades. “When I was in medical school from 1996 to 2000, all the teaching to nurses and physicians was that we don’t treat pain enough. The entirety of the subject matter on this was more pain treatment, and for some reason, we locked ourselves into thinking that only meant opioids,” she says. “It’s become pretty clear to me that what I was taught in medical school has created a new set of problems, and we didn’t have a good handle on how to treat that problem.”

She continued, “We’ve learned that even giving three or four days of scheduled narcotics can change the patient’s body chemistry such that they develop some tolerance. If I’m a treating clinician, and I suddenly have information that tells me that the injury that this patient has is an old injury, not a new injury, that might change the medicine that I prescribe that day.”

Marshall also notes that there is growing support in the medical community for the application of universal precautions to patients being considered for or treated with opioid therapy for chronic pain. The concept of universal precautions has its origins in infectious diseases, such as wearing gloves when handling blood products. “The idea is that we should be using universal precautions every time we prescribe opioids. Every person that I prescribe an opioid to has a risk for addiction. As an ER physician, I don’t have time to do the level of analysis to determine that person’s risk. So, you can give a patient two pills, and then have them follow up with a primary care doctor a pain management specialist who can determine the co-morbidities for addiction dependence or medication misuse,” she says.

And, Marshall notes that the work to address today’s opioid epidemic will be a long-term effort. “It’s going to takes us 15 to 20 years to catch up to the addiction that has developed over the last 20 years. But, if we start doing the right things now, we’re going to see the benefit in 10 to 15 years,” she says.

 

 


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A New Development Throws a Wrench into the Athenahealth Saga

September 18, 2018
by Mark Hagland
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The ongoing drama over the future of EHR vendor athenahealth seems to have entered a new phase, with a development that potentially throws a monkey wrench into its business process

The ongoing drama over the future of the Watertown, Massachusetts-based athenahealth appears to be continuing. Healthcare Informatics Managing Editor Rajiv Leventhal reported on Sep. 7 that “Elliott Management, a New York hedge fund led by billionaire Paul Singer, is the favorite to win the athenahealth takeover bid now that Cerner and UnitedHealth have declined an opportunity to acquire the health IT company, according to a report in the New York Post.”

Now, however, the situation seems abruptly to have changed. The New York Post reported on Monday that “Paul Singer’s Elliott Management has backed away from its $160-a-share bid for Athenahealth, The Post has learned. Singer, while getting cold feet at $160 per share, could be mulling a bid at a lower price, sources said. At the same time, other suitors — including some strategic companies that had made initial inquiries — have also gone quiet, sources close to the situation said.”

The Post’s Josh Kosman and Carleton English, who had also authored the newspaper’s Sep. 6 report, stated in yesterday’s article that, “As a result of Singer’s retreat and the lack of robust interest from others, athena has extended a final bid deadline by 10 days — to Sept. 27, sources said. Singer backing off the promised bid is a stark turnaround in the battle for the health care tech company,” they added.

What’s more, they wrote, “Elliott succeeded in a tough activist fight to get Athena to oust founder and chief executive Jonathan Bush, a cousin of former President George W. Bush, and to put the company up for sale.  Singer’s firm in May said it was prepared to pay $6.9 billion for Athena — contingent on due diligence.” And they quoted an unnamed source who told them, “There has been a lot of speculation on Elliott’s motives” for saying in May it was prepared to pay $160 a share. “It feels now like they never really wanted to own it” and were just setting a floor for the auction, the source told the reporters. athenahealth is a leading vendor of electronic health record and physician practice management solutions.

Healthcare Informatics will update readers on this story as new developments occur.

 

 

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Survey: CMIOs Cite Need for Better Technologies to Address High Drug Costs, Opioid Abuse

September 6, 2018
by Heather Landi, Associate Editor
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Physician IT leaders believe that progress has been made to improve medication management, however, there is more work to be done to address gaps that could potentially impact patient safety, such as high drug costs and opioid abuse, according to a recent survey of chief medical information officers (CMIOs).

The Association of Medical Directors of Information Systems (AMDIS) surveyed CMIOs in U.S. hospitals about medication management initiatives and the impact on patient safety. According to the survey, sponsored by DrFirst, a Rockville, Md.-based medication management solutions provider, nearly 100 percent of CMIOs believe medication management improvement initiatives are having a positive impact and that patient safety issues are less likely to occur today, as compared to 5 years ago.

Among the top patient safety gaps identified by CMIOs is the “inability to prevent financial constraints” from impacting patients’ adherence to prescribed medications. In fact, 71 percent of the survey respondents cited concerns with the lack of price transparency—the ability to inform patients how much a prescribed medication will cost, including their insurance co-pay amount. Medication costs are a key concern for patients as well, as evidenced by a Truven Health Analytics-NPR Health Poll which found that 67 percent of patients who failed to fill their prescriptions in the last 90 days reported high costs as their reason.

The surveyed CMIOS also identified a major gap related to the opioid epidemic. Sixty-five percent of respondents cited the need for an integrated clinician workflow that makes it easy for clinicians to coordinate the entire medication management process, including electronic prescribing of controlled substances like opioids, access to state Prescription Drug Monitoring Programs (PDMPs) to identify patients’ opioid histories, and electronic access to prescriptions from other providers and locations to avoid potentially harmful drug combinations. Similarly, 41 percent shared concerns about providers’ abilities to prevent opioid abuse since they often cannot easily distinguish “drug shoppers” from genuine patients.

Overall, 82 percent of surveyed CMIOs agree that medication management improvement initiatives have had a positive impact on adverse drug events. However, only half of the CMIOs expressed satisfaction with the medication management process, while 12 percent indicated dissatisfaction. According to the survey, the biggest gaps in the entire medication management process are incomplete patient medication histories (80 percent) and misaligned medication reconciliation and care transition cycles that lead to misinformed decisions by care teams (75 percent).

“While the industry has clearly made significant strides to improve medication management processes, CMIOs remain troubled by a number of gaps that compromise patient safety and quality outcomes,” G. Cameron Deemer, president of DrFirst, said in a statement.

He added, “By leveraging data and medication management technologies, including those that provide easy PDMP access and price transparency at the point of prescribing, care teams are better positioned to drive safer, more effective care—and increase medication adherence for patients across the country.”

The AMDIS survey found that 91 percent of CMIOs believe the biggest gap in medication history adherence and monitoring is the lack of visibility into a patient’s medication adherence. In most cases, only pharmacies know whether a patient has filled a prescription. Eighty-five percent of CMIOs point to the lack of patient participation in the medication reconciliation process as the biggest gap for medication history availability in their organization.

In addition, CMIOs identified workflow variations across departments (91 percent), a lack of process buy-in and/or process compliance (77 percent), and a lack of process ownership (73 percent) as the top issues compromising patient safety.

Virtually all the surveyed CMIOs believe it is imperative to focus on the entire medication process when addressing patient safety concerns and process efficiencies; 95 percent also feel that reducing order entry and data validation burdens for pharmacy and clinical staff will enhance patient safety and process efficiencies.

 

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