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Healthcare Analytics StartUp Landscape Global



Introduction:


Healthcare analytics is defined as the use of data, information technology and computer-based mathematical models to gain insights that support healthcare professionals in decision making. This report covers B2B companies that offer healthcare analytics solutions to Providers, Payers, Employers and Accountable Care Organizations (ACOs). The companies have been classified based on their application - Clinical, Financial, Operational and Suite Solutions. Examples include companies that offer analytics for Population Health Management, Clinical Decision Support Systems, Patient Engagement, Revenue Cycle Management and Workflow Management.


It excludes those companies that offer analytics in the form of consultancy, B2Csolutions and companies that offer analytics for drug development, drug discovery or research. This report also does notcover companies that offer their solutions to multiple industries (Oracle, SAS) and companies whose non-analytics productsand solutions span the entire healthcare sector (Cerner, McKesson).


Situation:


The companies are usually divided into these categories:

  • Clinical Analytics: Solutions that help gain insight into clinical operations, aid decision making, foretell patient health decline, prevent hospital readmissions and improve the quality of patient care.

  • Financial Analytics: Solutions aimed at streamlining and improving the revenue cycle process, identifying cost containment opportunities.

  • Operational Analytics: Solutions that assist administrative and operational decision making in areas such as customer acquisition, workflow management and market intelligence.

  • Suite Solutions: Solutions with multiple use cases that support overall performance improvement and execution.


Problem:


Most startups in this sector of the economy face the following problems or obstacles.

  • Complicated Industry: The industry does not give enough liberty reducing the innovative thinking of brilliant entrepreneurs. This is because of its association with the government. There are certain rules that are imposed on startups these rules are sometimes changed at random times causing a lot of confusion for these startups.

  • Slow Expansion: The competition may not be tough, this can sometimes give a feeling of sluggish or slow paced growth. Even after receiving funding from investors, there is still required a lot of self motivation before significant growth can be accomplished.

  • Privacy and Security: This problem affects the healthcare industry a lot. There are problems associated with the use of data collected from hospitals and other healthcare industries.


Implication:

  • The involvement of the government in the healthcare industry is invaluable but the problem of rigid rules and regulations and their pace at changing them might drive a lot of entrepreneurs into other sectors.

  • The slow rate of growth in this sector would affect the number of investors funding startups.

  • The problem of privacy can lead to hospital withdrawing their involvement in giving data to startups.


Need Payoff:


With more than 800 companies and a total investment of $2.2B in 2015/2016. The most active investors are: Rock Health, Bain Capital Ventures, Blue Cross Blue Shield Venture Partners.

  • Suite Solutions: A total investment of 1.4B. Includes companies whose product offerings impact more than one core application area. That is solutions with clinical, financial and operational impact. There have been 61 companies founded within 2008 and 2015.

They are divided into these:

  1. Performance Improvement: Analytics and business intelligence tools that help bring an overall improvement in workflow management, operational decision making and revenue cycle management. An example is Health Catalyst (founded in 2008 at Salt Lake City).

  2. Volume-to-Value: Solutions that help healthcare organizations to shift from a fee for service model to a value based payment programs. Analytics and decision support tools that support bundled payments, risk adjustments, patient risk stratification and care management. An example is Alignment Healthcare (founded in 2013 at Orange County).


An example is Flatiron Health (2012, New York City). They are a Cloud-based oncology platform offering analytics, billing and EHR. Their major investors are: First Round Capital, IA Ventures, SV Angel, Google Ventures, Allen & Company, Stripes Group, Great Oaks Venture Capital, Casdin Capital, Roche, Baillie Gifford, Laboratory Corporation of America, BoxGroup.

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  • Financial Analytics: A total investment of $300M. It includes companies which offer solutions aimed at streamlining and improving the revenue cycle process. These solutions cater either to hospitals or payers. Data Sources: Medical claims, Pharmacy claims, Billing and Payment data, Coding data, Denial information.


They are divided into these categories:

  1. Revenue Cycle Management: Analytics used for revenue integrity, financial reporting and benchmarking, care pricing analytics, adjudication outcomes comparison and analysis of provider utilization patterns.

  2. Fraud, Waste and Abuse: Solutions that help in identifying revenue leakages and provide insights into cost containment opportunities. Includes solutions that offer risk adjustment, coding error identification and claims validation.

A good example of a company in this section is MediGain ( founded in 2004 at Plano) with total funding amount of $46.5M from Prudential Capital Group. They provide revenue management solutions to healthcare providers.


  • Clinical Analytics: There have been a total of 436 companies founded from 2008 to 2015. A total investment of $3.1B. It includes companies which offer solutions that help gain insight into clinical operations, aid decision making and improve the quality of patient care. These solutions are primarily used by hospitals. However, payers and employers also use clinical data to understand and monitor member health.

Data Sources: Electronic Health Records (EHRs), Medical Claims, Audit records, Pharmacy Claims, Laboratory records, Radiology records, Wearables data, Sensors data, Genomic and Molecular data, Lifestyle and Environment data.

They are divided into these four categories:

  1. Decision Support: Point of care decision support tools used by clinicians, radiologists and doctors. Includes intelligent alerts, medical imaging diagnosis. An example is HeartFlow ( founded in 2007 at Redwood City).

  2. Population Health Analytics: Solutions that help in risk stratification, care gap identification and member health management. Caters to Providers, Payers and Employers. An example is Welltok (founded in 2009, at Denver).

  3. Health Engagement: Analytical tools that support remote monitoring, medication adherence and personalized care management.

  4. Clinical Performance Metrics: Solutions that help in physician assessment, clinical benchmarking, quality improvement and help improve patient safety.

  5. Precision Health: Precision medicine tools are used by clinicians to provide personalized treatments, drugs, dosage. Also includes genomic analysis.


A good example of a company under this sector is Proteus Digital Health (founded in 2001 in Redwood City), They provide medical adherence monitoring system. With a total funding of $404M. Their major investors are: Oracle, Silicon Valley Bank, Adams Street Partners, ITOCHU Corporation, Kaiser Permanente Ventures, Asset Management Ventures, Essex Woodlands, The Carlyle Group, Medtronic, Novartis, Oxford Finance, Fletcher Spaght, Helix Ventures, St. Jude Medical, ON Semiconductor, Otsuka America Pharmaceutical, Spring Ridge Ventures, Affinity Capital, Sailing Capital.


  • Operational Analytics: A total investment of $509M. It includes solutions that support administrative and operational decision making. Applications include Marketing, Workflow Management, Materials Management and Strategy. The solutions offered are used by hospital administrators and physician offices.

Data Sources: Hospital Information Management Systems (HIMS), Appointment management systems, Supply Chain Management Database, Staff and patient hospital records, Consumer demographics data and Patient feedback.

There are four categories in this subsection:

  1. Strategic: Business Intelligence and analytical tools that help hospital administrators in understanding market intelligence and patient feedback.

  2. Workflow: Solutions that offer patient flow automation and optimization, staff scheduling and resource utilizations.

  3. Marketing: Analytics used for lead generation, customer segmentation, referral management and patient acquisition.

  4. Materials Management: Tools that support hospital supply chain logistics, demand prediction and procurement analysis.


A good example of a company under this sector is Evariant ( founded in 2008, in Farmington). They provide a platform for digital marketing solutions with investors like: Lightspeed Venture Partners, Salesforce, Goldman Sachs, Health Enterprise Partners, McKesson, Enterprise Partners Venture Capital, Dignity Health.


Conclusion:


The HealthCare Analytics sector is a hot sector with a lot of investment going into it. The transformative power of this sector coupled with its involvement with technology makes it easier for the involvement of a lot of startups. The vision of this sector is promising and the benefits it offers to the data analytics sector and the healthcare sector cannot be overemphasized.


References:

  1. The WWW.

  2. Tracxn Report.


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