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Investor Newsletter January 2021
Author
Justin Long
Author
Joshua Harris
Monthly overview of recent KLAS insights, upcoming reports, and industry happenings.
Data Analytics
The announcement by AWS for HealthLake will likely cause heartburn for any healthcare data analytics company. If Google, Microsoft, and Apple follow this path, a new market dynamic will ensue, and that may include many current data analytics companies failing.
AI/Machine Learning
The continued advancement of AI and voice recognition toolsets from big tech companies will drive AI improvements and adoption by the smart companies that use these tool sets to create their differentiated AI solutions. Voice recognition technologies will continue to advance and will integrate voice biomarkers to advance early illness diagnosis.
Remote Patient Monitoring
A new consortium that includes Apple, Google, and Zigbee called Project CHIP will allow a standard connection for consumer devices to smart home products. The connection to medical monitoring devices to this environment supports new home care service capabilities for consumers and providers.
Key market drivers for 2021 will include consumer demands for more digital health solutions and the impact of Walmart, Walgreens, and CVS to redesign healthcare delivery for primary care.
Haven fails. The joint effort by JP Morgan, Berkshire Hathaway, and Amazon to reduce employer insurance costs while improving employee health outcomes will cease operations at the end of February 2021. While Haven failed, COVID-19 prevailed, further extending a “woke” nation regarding the inequity of healthcare services in the US. The citizens of the US will drive new healthcare insurance and delivery models supported by a Democratic administration. The next four years will be remarkably interesting to experience.
CMS Price Transparency will drive healthcare providers and payers to deliver care at lower costs. This is the beginning of the end of fee-for-service reimbursements. Consumers will now be able to effectively shop for care relative to service prices, which are usually not well aligned with quality of care or outcomes. Consumer digital services will emerge that detail healthcare service costs and the resulting quality and outcomes of the service for provider organizations.
KLAS Is in Session
New Product Smile
New products often seem to garner a lot attention. When a new product is viewed as innovative or different, customers can and often do excuse some of the shortcomings with the product. KLAS has found that, more than half of the time, this can lead to unrealistic expectations in the market and some disappointing results for some customers. In KLAS’ research, a “New Product Smile” occurs in 57% of new products that are brought to the market. Often, early adopters have low expectations around what the product can and cannot do, and they work closely with the vendor as a partner when issues arise. As time passes and additional customers are brought online, the partnership that early adopters had with the vendor erodes, and they are left frustrated at the new relationship and the lack of personal communication. Additionally, as new customers are brought live, expectations are higher for a mature product. New customers can be unpleasantly surprised to find that the product is lacking in key functionality or stability, and that has a negative impact on long-term sales. Over time, vendors can see their scores rise again by being fully transparent about the product’s capabilities, setting realistic road maps, and focusing on effective scalability (not just new sales).
CX Framework—Relationships
KLAS has developed the Customer Experience (CX) Framework through decades of customer interviews with healthcare organizations and vendors throughout the world. This framework is used to help providers and vendors see where a product or vendor excels or where it needs improvement at a glance.
This month’s highlight: Relationships
A provider once shared with KLAS, “We are not buying software from vendors; we are marrying the vendors.” This relationship between providers and vendors is a significant commitment between both parties, and with it comes a set of expectations. The relationship pillar of KLAS’ CX Framework sums up the most common touch points between providers and vendors, serves to highlight the quality of the relationship that providers will have with the vendors they select, and shows whether the vendor will take an active interest in the long-term success of the customer.
Upcoming KLAS Specialty Reports
Large Ambulatory Performance & Training Best Practices
Large ambulatory practices tend to be complex and cover multiple specialties, and therefore have substantial needs regarding their EMRs. This report, focused on these large ambulatory practices, will examine what EMR vendors are doing to help clinical users of the EMR in terms of initial and ongoing training. This report will also draw on Arch Collaborative findings about EMR training.
Futura Mobility HIT Staffing: eTech First Look
Futura Mobility is a healthcare IT consulting firm that provides point-of-care mobile technology and clinical and business IT support and services. KLAS has not previously reported on Futura Mobility; thus, this report constitutes a first look at their clients’ experience.
Latin America (LATAM) PACS
Focused on PACS customer satisfaction and market energy in Latin America and the Caribbean, this report will examine efforts by Agfa HealthCare to get enterprise imaging off the ground and by MV to develop their system. The report will also seek to answer questions regarding PaxeraHealth’s efforts to grow in the region and Pixeon’s ability to grow outside of their core region.
Other eTech Spotlights & First Looks
Verata Health: eTech Spotlight
Relevant Healthcare: eTech First Look
RxNT: eTech First Look
Robotic Process Automation: Adoption Moving Mainstream
Use of robotic process automation (RPA) technology in healthcare continues to grow. Early adopters focused primarily on automating repetitive and time-consuming revenue cycle management (RCM) tasks. Having achieved positive ROIs, these adopters see the opportunity to drive additional efficiency and bottom-line improvements, both within RCM and in other areas of their organizations. This report dives into the performance of several early leaders in RPA technology to compare how they perform and how well they meet customers’ needs and expectations.
Industry Investments of Interest
Will telehealth and telemedicine investments continue on pace from what we saw in 2020? Or will the Teladoc, Livongo, and Amwell solutions show the growth and the EBITDA improvements expected by investors materialize to slow market investments in this area? Will vendors who create simple telehealth connection services that integrate with EHR solutions challenge current market leaders? Will collaboration and teleconference vendors like Microsoft and Zoom become market leaders? 2021 will be an interesting year to watch for telehealth and telemedicine market dynamics.
Curai Health, a learning telehealth solution, closed $27.5 million in Series B financing led by Morningside Ventures and including our return backers from General Catalyst and Khosla Ventures.
Diameter Health, a provider of data interoperability solutions, has announced that it raised $18 million in a Series B funding round led by managed care organization Centene Corporation, with participation from existing investors Optum Ventures, LRVHealth, Connecticut Innovations, and Activate Venture Partners.
H1 Health, which provides a massive digital professional database and data analytics platform that connects healthcare professionals and life science companies, raised a $58 million series round of funding co-led by growth-stage investment firm IVP and Menlo Ventures.
MedArrive, a telemedicine and online medical support services provider, raised $4.5 million in a seed round, co-led by Kleiner Perkins and Define Ventures.
nference, which synthesizes the world’s biomedical knowledge, announced the completion of a $60 million Series C funding round led by Matrix Capital Management, along with Matrix Partners, Mayo Clinic Ventures, and NTTVC.
Onc.AI, an artificial intelligence platform intended to provide clarity to cancer treatment decisions, has closed a $6 million financing round.
Tempus, which enables physicians to make real-time, data-driven decisions to deliver personalized patient care, announced an additional $200 million financing at a post-money valuation of $8.1 billion dollars and an additional $250 million of convertible debt. The investors include Baillie Gifford, Franklin Templeton, Google, Novo Holdings, and funds and accounts managed by T. Rowe Price. With these investments, Tempus has now raised around $1.05 billion.
Workit Health, a telehealth solution for treating addiction patients, announced a $12 million Series B round of financing, which brings its total funding to date to $20 million.
Industry Investments of Interest
LabGenius, a London, UK-based next-generation therapeutics company powered by machine learning, raised $15M.
Snap Inc. has acquired enterprise voice assistant developer Voca.ai for $70; Voca.ai developed voice biomarkers to help detect COVID-19.
Recent Emerging Technology First Looks & Spotlights
Amwell Flash Insights 2020: a review of Amwell relative to the Google investment and current customer views on the potential impact of this event.
DocASAP: an emerging patient access and engagement platform.
Doximity Dialer: an emerging telehealth solution.
Doximity Hospital Solutions: a physician collaboration and patient acquisition solution.
GYANT: Patient engagement tools are in high demand. GYANT’s AI-enabled platform, which integrates with any EHR system, is meant to drive more meaningful patient/doctor engagements while improving care utilization and pathways.
Infectious Disease Connect: Infectious Disease Connect (ID Connect) provides telemedicine access to infectious disease specialists when they are needed. ID Connect’s software, ILÚM Insight, is an infectious disease decision support platform that identifies real-time opportunities to intervene in patient cases to arrive at the optimal therapy and antibiotic utilization.
MedeAnalytics SaaS Platform: a review of the new cloud-based solution for the MedeAnalytics product.
MediReport: a multinational vendor with a structured reporting cardiology solution called CardioReport that was originally developed for cath, but it has since branched out to include EP, echo, and vascular (the vendor does not offer a cardiology PACS).
Microsoft Teams: a review of the collaboration and telehealth capabilities of this platform.
Phrase Health: a solution that evaluates the effectiveness of clinical alerts and analytics for patient care.
Softek: RCM services for Cerner clients that improve receivables.
Teladoc - Livongo Merger: In October 2020, Teladoc Health finalized a deal to acquire Livongo. This merging of two publicly traded virtual care companies creates a telehealth giant amid rising demand for virtual care solutions.
YES HIM Consulting: YES HIM Consulting provides auditing services and training programs for in-house coders in addition to traditional outsourced coding services.
Happy 2021 from KLAS Research
With 2020 now in the rearview mirror, the KLAS Investment Advisory team hopes your new year is off to a strong and productive start. For inquiries on viewing our growing number of specialty or emerging technology reports, gaining access to our expansive KLAS database, or discussing details surrounding your next due diligence project, contact the KLAS Investment Advisory team at investorservices@klasresearch.com. We look forward to serving you in 2021!
Designer
Natalie Jamison
Project Manager
Robert Ellis
This material is copyrighted. Any organization gaining unauthorized access to this report will be liable to compensate KLAS for the full retail price. Please see the KLAS DATA USE POLICY for information regarding use of this report. © 2024 KLAS Research, LLC. All Rights Reserved. NOTE: Performance scores may change significantly when including newly interviewed provider organizations, especially when added to a smaller sample size like in emerging markets with a small number of live clients. The findings presented are not meant to be conclusive data for an entire client base.