Six health care systems are involved as investors in and customers of data analytics company Health Catalyst or the competitor it just bought, Health Care DataWorks.
Four of them, Allina Health, Minneapolis; Indiana University Health, Indianapolis; Kaiser Permanente, Oakland, Calif.; and Partners Healthcare, Boston, are existing customer investors of Salt Lake City-based Health Catalyst, so not much is changing for them, at least for now.
Two health system investors in Health Care DataWorks — Cedars Sinai Medical Center and MemorialCare Medical Center — received cash and stock for their ownership stake in the company in the deal, which closed July 31 and was only publicly announced today.
And just as important, the two systems will become customers of Health Catalyst as well. "We see it is a terrific acquisition," said Brant Heise, managing director of the MemorialCare Innovation Fund. "The two organizations are very similar in their missions and in their vision."
Heise said Fountain Valley, Calif.-based MemorialCare, which has been doing direct investing for 15 years, gets a lot out of its ownership stakes when acting as a customer. "We find that there are tremendous synergies that you can develop and foster between the entrepreneurial community and the health care system community by taking a slightly different approach than a typical vendor-client relationship," Heise said. "It's really much more collaborative and collegial. We find that it's tremendously valuable for all sides."
Cedars-Sinai, Los Angeles, was an early customer of Health Care DataWorks, and Darren Dworkin, its chief information officer, said he views the acquisition as a sign that the analytics segment, like electronic health record system companies did, is starting to consolidate and mature. "It's a great, positive sign," Dworkin said.
The dealmaking may not be over for the companies and its system owners, because Health Catalyst is planning to sell its shares to the public.
Dan Burton, CEO of Health Catalyst, said before the Health Care DataWorks deal that his company performed work for about 200 hospitals; the purchase of the Columbus, Ohio, company brings 18 more hospitals, within five systems, as customers.