Investor Newsletter September 2022

KLAS Market Insights

Organizations Are Consolidating Data Analytics Solutions

Healthcare organizations are seeking to measure and improve modern care delivery by aggregating data. Thus, they must learn how to identify actionable insights using effective data analytics products. KLAS typically categorizes these products into two areas: (1) data visualization and reporting and (2) data and analytics platforms. While the former focuses on front-end graphical or tabular displays of data (Tableau, Microsoft Power BI, etc.), the latter goes beyond data visualization to also examine robust data ingestion and enterprise analytics.

In the early days of data analysis, best-of-breed vendors entered the market, specializing in very specific use cases that helped organizations extract actionable insights. However, as the market evolved, organizations began to find that the functionality of best-of-breed solutions was too narrow to address their increasingly complex needs and problems. This, along with the desire to consolidate systems and streamline data ingestion and management, prompted organizations to look to data analytics solutions from their EMR vendor. In 2017, KLAS data shows that among large IDNs, those who are Cerner EMR customers use an average of 3.2 data analytics solutions, while those who are Epic EMR customers have an average of 4 data analytics solutions. In 2021, KLAS data shows these averages have decreased to 2 solutions for both Cerner EMR and Epic EMR customers. Across all large IDNs, regardless of EMR vendor, the average number of data analytics solutions in 2021 is 2.2.

It remains to be seen whether organizations will continue to consolidate by choosing their enterprise solution or whether they will return to best-of-breed solutions. EMR vendors’ development often trails behind best-of-breed vendors’ development. Going forward, organizations must consider the balance between the advanced functionality of best-of-breed solutions and the easy interoperability of EMR solutions and determine which type of solution will best meet their needs.

It should also be noted that the rise of AI/ML tools introduces complications. These tools are difficult to deploy but hold enormous promise for improving care delivery. Best-of-breed vendors are likely better positioned to develop AI/ML tools that can drive significant value at scale. However, the ability of AI/ML tools to drive value at scale across different healthcare systems has not yet been proven. If AI/ML tools decline in popularity, enterprise analytics solutions from EMR vendors are more likely to dominate the market, thanks to the simplified interoperability and deployment.

The KLASifieds

Digital Health Investment Symposium (DHIS) 2022
September 13–14, 2022
Stein Eriksen Lodge | Park City, UT

KLAS Report Highlights

Emerging Technology Reports

Each week, dozens of new companies are knocking on the doors of provider organizations and health systems to present their latest innovative solutions. KLAS publishes 90+ individual reports annually that provide early performance data on these solutions designated as emerging, disruptive, or innovative.To access the KLAS reports library, visit our website.

Market Specialty Reports

KLAS publishes 75+ specialty reports annually, providing market insight based on customer perceptions of and experiences with the vendor/consultant solutions they employ. KLAS also validates industry trends, emerging technologies, purchase decisions, and market energy. Interested in KLAS report purchase options? Contact the KLAS Investment Advisory team at investorservices@klasresearch.com.

Post-Acute Care EMR Product Suites 2022: Vendors’ Progress toward an Enterprise Offering

Most providers in post–acute care settings want technology built for their specific area, but they face challenges with interoperability, analytics, value-based reimbursements, and care coordination. Increasingly, organizations are looking for vendors that can meet all their post–acute care needs. Several vendors are answering the call, despite the highly varied, unique challenges associated with each care setting. This report examines what solutions are offered, how they are being adopted, and how well they meet setting-specific functionality needs (particularly for home health and LTC/SNF). The report mainly focuses on vendors specific to post–acute care but also provides a brief look at the post–acute care solutions of enterprise acute care EMR vendors.

Recently Released and Upcoming KLAS Specialty & Emerging Technology Reports

2022 KLAS Emerging Solutions Top 20

The partnerships that healthcare organizations make with technology vendors and services firms drive outcomes for years to come, and amidst a flood of new technologies, amazing potential partners can be missed. For the first time, KLAS has asked 16 prominent members of the healthcare community with broad HIT expertise to read 41 KLAS reports on emerging technology and rate their perception of the solutions based on their potential to impact the Quadruple Aim of Healthcare: to improve outcomes, reduce the cost of care, improve the patient experience, and improve the clinician experience. This report (1) ranks these emerging solutions by their ability to disrupt the healthcare market and (2) provides insights from participating healthcare leaders into what innovation themes organizations should be aware of as they seek to provide the best patient care.

CMS Payer Interoperability 2022:
An Early Look at Purchase Decisions and Vendor Performance in a New Market

CMS recently issued a new regulation stipulating that CMS-regulated payers must be able to securely store and share patient data under the HL7 FHIR standard. To achieve this, organizations use CMS payer interoperability products, which usually provide capabilities such as patient access APIs, provider directory APIs, and payer-to-payer data exchange. Health plans and state agencies are evaluating how well technology vendors’ existing or newly developed solutions can help them stay compliant with the new CMS requirements. This report is KLAS’ first to validate the purchase decisions and customer experience of some of the vendors in this area.

Payer Claims & Administration Platforms:
2022 Vendor Guide

Value-based care models have created widespread recognition among health plans that flexible technology is a must, while the need to be more member-centric and digitally focused is driving a desire for better integration between claims platforms and other payer HIT applications. This vendor guide is intended as a simple starting point for health plans and TPAs investigating payer claims and administration platforms. The guide is limited only to vendors with commercial software solutions (services firms are not covered) and includes all vendors known to KLAS as of July 2022.

US Digital Pathology 2022:
Early Adopters Lead the Charge in an Emerging Market

Digital pathology for primary diagnosis is nascent in the US, but it is primed for rapid growth, similar to what is currently being seen in Europe (see KLAS’ report on global digital pathology). In anticipation, many technology vendors are vying for a foothold in the US market, leading to a highly varied landscape. In partnership with the Digital Pathology Association (DPA), KLAS surveyed 55 provider organizations to assess the state of digital pathology among pioneers in the US and determine which vendors are gaining traction. 33 of the interviewed organizations are live with digital pathology; the remainder are currently implementing or making plans for the future.

Chi-Matic Revenue Cycle Services:
First Look Report 2022

The financial climate in healthcare has pressed many revenue cycle teams to do more with less, but many struggle with staffing and the deep technical expertise needed for revenue cycle optimization. An organization’s financial health requires a holistic approach that includes expertise in revenue cycle and healthcare software and processes. This is where firms like Chi-Matic (a primarily Epic-focused firm) step in. This report evaluates the experiences of provider organizations that have used Chi-Matic’s revenue cycle services.

Finvi Artiva HCx:
Emerging Technology Spotlight Report 2022

Healthcare organizations continue to search for opportunities to improve margins by optimizing revenue cycle operational efficiencies. Finvi, formerly known as Ontario Systems, offers the Artiva HCx platform as a solution for efficiently managing insurance and self-pay receivables. The product includes key workflows and reporting analytics designed to streamline and automate processes. This report will examine customers’ experience and satisfaction with Artiva HCx.

Lumeon Care Orchestration Platform (US Customers):
Emerging Technology Spotlight Report 2022

Coordinating patient care is becoming increasingly important for provider organizations; however, the process is typically very manual and time-consuming, and many organizations can’t dedicate enough resources due to staffing shortages. As a result, they are looking for tools that can help automate each patient’s care journey. Lumeon seeks to accomplish this through their comprehensive Care Orchestration Platform. This report evaluates the experience and satisfaction of customers in the US.

SeamlessMD:
Emerging Technology Spotlight Report 2022

Patient-driven care management solutions have the potential to improve the overall quality of patient care and to drive outcomes by enabling clinicians to monitor and stay connected with patients across their healthcare journey—including before, during, and after hospitalization. This report seeks to validate the experiences of customers (both US and non-US) with SeamlessMD’s digital patient engagement platform.

Trulla:
Emerging Technology Spotlight Report 2022

Annually, there is considerable healthcare expenditure that is exacerbated by gaps in the pharmacy supply chain. An improvement opportunity is to reduce the annual pharmacy spend while utilizing available 340B and group purchasing organization (GPO) accumulations to maximize cost savings. Procuring medication at affordable prices is a concern for providers, pharmacies, and patients. This report offers a first look at Trulla, a pharmacy procurement software application aimed at helping pharmacy buyers select the most economic NDCs and suppliers, ultimately improving the drug-purchasing process.

To make a purchase or find more information on KLAS reports, contact the KLAS Investment Advisory team at investorservices@klasresearch.com.

Market Activities Impacting Investments

Dealmakers Remain Optimistic for 2022

Almost all private equity firms (94%) have closed deals in the previous six months, up from 89% in fall 2021. A DealCloud report analyzes deal approaches and risk factors in the current market.

Insights into Emerging Healthcare Segments

Crunchbase reports on emerging healthcare segments with examples of vendors who are likely to positively impact healthcare services.

Major Macroeconomic Headwinds for Global M&A

A recent Q2 M&A report shows that North American M&A continued its decline, with deal volume and value both falling more than 30% from Q4 2021.

Middle Market PE Firms Adjusting to Market Shifts

New PE middle-market strategies, as identified by PitchBook, consist of scaling platform companies—especially those in a fragmented market—through add-on acquisitions, adding them to the platform companies they already own. The acquisition targets will be VC-backed companies with falling valuations.

PE Firms Acquiring Wealth Management Companies

A wave of consolidation is sweeping the wealth management industry, fueled by private equity (PE) interest, generational turnover, and acquisitions. Acquisitions of wealth management funds allows PE firms the chance to build up their portfolios of businesses with steady cash flows.

Technology Deals: 2022 Midyear Outlook

A PwC report shows deal value for the first half of 2022 was $272.4 billion, with $173.3 billion in the first quarter and $99.1 billion in the second quarter. The increase in overall deal value in the first half of 2022 compared to the first half of 2021—$172.8 billion—is partly due to the number of megadeals. Deal volume was lower during the first two quarters of 2022, totaling 677 deals, compared with 1,070 deals for the first half of 2021.

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