Proposed athenahealth-HDS acquisition to aid in value-based payment models

Watertown, MA–based athenahealth has acquired Boston, MA-based Healthcare Data Services LLC (HDS), a provider of clinical tools for accountable care organizations, in an attempt to expand its services and aid healthcare setups traverse through an era of new payment models and streamline their clinical activities. The transaction is expected to complete by October, this year.

The US Government is providing various payment models, such as bundled payments, global capitation, pay-for-performance (P4P) incentives, and shared savings, with the interest of establishing a system, wherein the reimbursement is proportional to care quality, which in turn will help lower the patient’s healthcare expenses. Each necessitates a better insight into patient population information, so that organizations can analyze and manage patient requirements, and simultaneously track and align the performance of their own facility against risk-based reimbursement contracts.

Established in 2004, HDS provides tools for health data analysis and population health management to more than 4,000 physicians across 1,500 practices. The acquisition of HDS is expected to further portray athenahealth as a single-source provider with the ability to offer data insight and workflow solutions that support payment models. These efforts in establishing a healthcare data backbone, and care coordination, patient-cycle and clinical-cycle workflows will be complemented by HDS. Thus, through better access to patient information, healthcare organizations will be able to achieve financial and clinical enhancements. athenahealth, with HDS, aims to help healthcare organizations reduce cost and understand the services provided as a whole.

HDS’ experience with Massachusetts’ population health tools market is touted to have encouraged the transformation towards accountable care across the state. Leveraging this, the current synergy plans on producing a comprehensive, easy-to-access platform that could aid organizations to migrate towards accountable care, and extending services of quality and improved reimbursement processes to a larger set of healthcare facilities.

Furthermore, the acquisition is expected to enable athenahealth to leverage HDS’ cliental of medium-to-large health systems, and in turn accelerate athenahealth’s cloud-based services. Complementing athenahealth’s endeavors to support risk-based payment models, HDS hopes to benefit from its complementary cloud services, investment, and sales force ability.

According to athenahealth’s CMO and MD, Todd Rothenhaus, HDS’ capabilities will enable the company to offer its customers a comprehensive view of the quality and cost of patient care. The integration of HDS information into athenahealth’s patient communication, care coordination, and EHR services is also expected to offer transparency to physicians at the point-of care. The incorporation of HDS’ capabilities and models into athenaNet®, a centrally hosted, web-based platform, will enable athenahealth to provide a new set of services to their customers to help them shift from volume-based to value-based delivery models. HDS, together with athenahealth’s Anodyne services, is likely to develop a single business intelligence (BI) solution for the medical fraternity under any payment model.

Jonathan Porter, HDS’ co-founder ends with a positive note that the changes happening in the reimbursement scenario should be taken as a window of opportunities instead of a cause for challenges.

This positive note will go a long way as the US healthcare industry migrates towards a value-based system from a fee-for-service model. This is depicted in an Oliver Wyman survey that shows that the percentage of hospital-employed physicians working under the fee-for-service modules will decrease from over 80% to less than 20% by 2020.

Prior to HDS, athenahealth’s acquisition activities include cloud-based care coordination services vendor, Proxsys, LLC (2011), to enhance its emerging care coordination services, athenaCoordinator; and Anodyne Health Partners, Inc., for BI solutions (2009).

Founded in1997, the company provides cloud-based services including EHR (athenaClinicals®), practice management (athenaCollector®), patient communication (athenaCommunicator®), and care coordination (athenaCoordinatorSM) solutions for 76 medical specialties with its 2,060 employees. Named most innovative company by Massachusetts Institute of Technology (2010 and 2012) and Fast Company Magazine (2010), the company reported revenue of $103.5 million for the second quarter ending June 30, 2012, a 33% increase from the same time of the previous year, and fiscal year 2011 total revenue of $324.1 million.

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