Five Reasons Why Health Catalyst Acquired Medicity and What It Means for Interoperability, as Explained by Dale Sanders, President of Technology

Article Summary

Why did Health Catalyst acquire Medicity? Dale Sanders, President of Technology, shares five reasons and what it means for interoperability:

1. Medicity has several petabytes of valuable data content.
2. Medicity’s data governance expertise.
3. Medicity’s 7 x 24 real-time cloud operations expertise.
4. Medicity’s expertise in real-time EHR integration.
5. Medicity’s presence and expertise in the loosely affiliated, community ambulatory care management space.

Editor’s Note: Following the Health Catalyst acquisition of Medicity in July 2018, we sat down with Health Catalyst President of Technology, Dale Sanders, to learn more about the reasons for the acquisition, the state of Health Information Exchanges (HIEs),  the limitations of current healthcare technology, and how Medicity’s technologies strengthen the Health Catalyst Data Operating System (DOS™) and improve interoperability, helping to change the digital trajectory of healthcare.

Team members sitting in a boardroom, clapping at a presentation

Q: Why did Health Catalyst acquire Medicity?

A: Let me acknowledge that the HIE market is not exactly booming. At best it’s flat in some markets, but for the most part, it is shrinking and has been for years. So, on the surface, this acquisition might seem a little contrarian, but if you dig a little deeper than simply the state of the market, there are five good reasons for Health Catalyst to do this.

First, and most obvious, it’s the data content. When you combine Health Catalyst’s vast data content with Medicity’s several petabytes of data, it creates a very valuable additional source of training data for our machine learning algorithms. We already have the best performing machine learning models in the industry, and that’s no overstatement. Adding Medicity’s data content to that training set will put us even further ahead. In addition to the content of the data in an HIE environment, the traffic patterns of data flowing through HIE give us a chance to analyze the process and timing of care by using the metadata of the messages as they transition through the HIE networks. So, we are interested in both the content of HIE data as well as the metadata about the transactions in the HIE networks. On a related note, the HIE vendors have consistently struggled to provide affordable, sophisticated, longitudinal analytics for their clients. HIEs simply don’t have the breadth of data needed for today’s healthcare analytics environment. HIEs have depth of data in a clinical sense– lots of records and transactions– but they don’t have a breadth of data in the larger context of healthcare delivery, for example financial, cost, patient outcomes, and supply chain data. Health Catalyst has breadth of data and depth of data at our client sites in all the of the above-mentioned categories. We hope that Medicity’s existing client base will find the combination of Medicity’s HIE capabilities with Health Catalyst’s analytics capabilities, a very appealing new combination; one that some of Medicity’s clients have been asking for, for years.

Second, and I think most people will find this unusual, we value the data governance expertise that Medicity brings to the table. More and more, Health Catalyst is commoditizing the technology associated with healthcare analytics and decision-support. But it’s very difficult to commoditize the human, legal and organizational aspects of data governance. The HIE vendors were the first to deal with data governance issues across organizational boundaries, state boundaries, and regional boundaries. And when I talk about data governance, I’m not just talking about the usual things like data access rights, security, privacy, data sharing, and data standards. I’m also talking about the legal relationships that exist between these organizations that allow them to share data and I’m also referring to the variability in state legislation for compartmented healthcare data, such as HIV and behavioral health data. That’s a complicated world and Medicity has been involved in it, across 35 states. And finally, I’m also talking about the economics of data governance. For example, the funding models among the participating organizations in an HIE network that have enabled many of Medicity’s HIE networks to be economically sustainable. In a fee-for-service world where data sharing between organizations may actually hurt your financial bottom line, the economics of data governance among Medicity and its clients are pretty impressive.

Third, we value Medicity’s 7 x 24 real-time cloud operations expertise, both the strength of their operations as well as their technology. As you might have heard at Health Catalyst, we are developing and deploying a Data Operating System that is conceptually similar to the combination of an HIE and a classic enterprise data warehouse. The Data Operating System is the convergence of those two functions, plus more. Our Cloud Services and technology are more familiar with the traditional uptime and availability requirements of a data warehouse. We need to brush up our operations and technology to achieve the same level of high-availability and high-performance that Medicity achieves in their cloud operations and apply those to our cloud and the Data Operating System.

Fourth, Medicity’s expertise in real-time EHR integration. As I mentioned earlier, the Data Operating System that we are developing and deploying is a combination of a transaction processing and an analytic processing application development platform. We will soon, as in August 2018, have the ability to move single record transactions through our Data Operating System from point A to point B much like today’s HIEs. We also have an emerging capability to embed the output of our analytics into the workflow of the EMR. We place significant value on the intellectual capacity as well as the technology that Medicity developed to reliably move single level records among their clients and interact with EMRs to insert that data into the point of care. We plan on folding Medicity’s lessons learned and experience into our real time, point-to-point, transaction data movement capabilities in the Data Operating System, and strengthening what we call “closed-loop analytics” back into the EMR.

Fifth, Medicity’s presence and expertise in the loosely affiliated, community ambulatory care management space. We have not been a strong contender in the clinically integrated network space. We’ve lost the vast majority of the procurements in which we competed. Our losses in that space have several root causes, but can largely be attributed to the lack of an HIE. At the end of the day, the CINs are looking for the relatively simple integration of data between EMRs, at the patient encounter level, with just enough clinical quality analytics to meet the legal requirements of a CIN. We offered an overkill of analytics in these procurements and offered nothing for the type of data integration provided by an HIE. With our old Health Catalyst platform, we couldn’t provide that HIE capability, so the CINs dropped us from consideration more often than not. You can argue that we don’t necessarily need to acquire an HIE in order to satisfy that weakness in the CIN market. We could more easily partner with Medicity than acquire them to fill that need. But given the other four motives we have in this acquisition, being able to mitigate our weakness and be a stronger contender in the clinically integrated network space is simply added value.

Q: Finally, interoperability has been top-of-mind for several years among CIOs and law makers alike. How would an acquisition such as this help push interoperability for the entire industry?

We are a very mission-driven company; most of Health Catalyst teammates have worked in healthcare operations for many years and we are tired of the status quo. We want to make a difference. I think anyone who knows healthcare would agree that we need to be more data driven, more digital. At Health Catalyst, we’ve created significant improvements in analytics and data-driven healthcare. We are not finished, but we’ve made progress and we’ve pushed other vendors to raise their game, too. Likewise, I think anyone who knows healthcare would agree that we need to be more interoperable. Analytics and interoperability are two sides of the same data coin. We know healthcare data better than any group of people in healthcare. Most of the problems with interoperability can be traced back to two things: (1) The non-standard manner in which EHRs are deployed, especially at the data and terminology layers, which forces a document-based data exchange model rather than granular data; and (2) The economics of healthcare in the U.S. still don’t drive a need for interoperability. In fact, there are economic disincentives to support interoperability. It’s a grand thought to assume that Health Catalyst can affect these causes, but we will try. The bottom line is this: Somebody needs to make a difference and if Health Catalyst can’t do it from a vendor perspective who understands healthcare data, I’m not sure anyone can.

Additional Reading

Would you like to learn more about this topic? Here are some articles we suggest:

  1. Critical Healthcare M&A Strategies: A Data-driven Approach
  2. Healthcare Analytics Platform: DOS Delivers the 7 Essential Components
  3. 5 Reasons Healthcare Data Is Unique and Difficult to Measure
Introducing the Health Catalyst Monitor™ Patient Safety Suite: Surveillance Module

This website stores data such as cookies to enable essential site functionality, as well as marketing, personalization, and analytics. By remaining on this website you indicate your consent. For more information please visit our Privacy Policy.