What We're Reading

CLINICIANS STILL STRUGGLE TO QUICKLY ACCESS EHRS AT POINT OF CARE

Healthcare IT News 12/19/2017

Even through workstations on wheels, care team workflows still remain fragmented due to the need to access patient data and clinical information from multiple disparate systems. This is turn then breaks down the fundamental human flow of care as well as leaving patients with the perception that the clinician’s primary focus is on the technology, and not them. In the long term, the best approach lies in reducing the number of factors and unifying the myriad applications for more efficient communications and care.

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FOUR HEALTHCARE REVENUE CYCLE TRENDS TO WATCH IN 2018

Becker’s Hospital Review 12/19/2017

With the revenue cycle continually evolving, more technology solutions have emerged to keep pace. Key trends to keep an eye on in 2018 include mega-mergers, technology solutions, patient financial experience and affordability, and end-to-end revenue cycle solutions. In regards to technology, newer solutions are expected to be geared towards risk adjustment tracking and coding, emphasizing the importance of healthcare providers partnering with vendors.

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HOW THREE MAJOR CHALLENGES WILL SHAPE HEALTHCARE IT IN 2018

Health Data Management 12/15/2017

One of the top issues carrying over from 2017 is data breaches, an issue that the healthcare industry continues to struggle with. As the pace of attacks in early-2017 approached over a breach a day, the trust in healthcare providers has decreased, with more data becoming exposed. Other hurdles for the industry include the transition to value-based care as well as consolidation, where failed mergers of four of the largest insurers has garnered significant attention.

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SEEKING A UNIFIED APPROACH TO MOBILE CARE COLLABORATION

Healthcare IT News 12/8/2017

With newly-issued mobile communications tools not meeting the needs of current healthcare employees, they resort to using workarounds, such as sending unsecured texts from personal phones. Additionally, a survey by Journal of Hospital Medicine found that 80% of employees still use a hospital-issued pager, due to the ease of use and previous knowledge and understanding. In order to enforce the use of these new technologies, organizations need to require ongoing training as well as more reliable networks.

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HERE'S WHY HEALTHCARE SHOULD BE TALKING ABOUT NET NEUTRALITY

Modern Healthcare 11/19/2017

Net neutrality means everyone sending data is treated the same by carriers like Verizon and others; no one can pay or be charged more for faster transmission speeds and none can be barred from sending data. Telehealth and electronic record data exchange are the two primary areas of healthcare that will suffer were internet service providers allowed to charge higher prices for faster transmission speeds, say those who back net neutrality.

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Key Healthcare Macro Indicators

HCIT Public Market Valuations

HCIT Public Market Valuations as of December 31, 20177

Public Comparables

Public Comparables7

NOTABLE HCIT M&A TRANSACTIONS

BV Investment Partner’s Acquisition of Precision Nutrition

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  • Provider of technology-powered nutrition education and behavior change solutions for the health and fitness industries
  • Following the strategic investment, BVIP will support PN’s organic growth plan which includes further penetrating the fitness professional end market, expanding into additional end market segments, and further investing in the ProCoach online content and business software platform

 

Navicure’s Merger with ZirMed

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  • ZirMed is a provider of web-based revenue cycle management solutions to the healthcare sector
  • Navicure and ZirMed have consistently been ranked Best in KLAS and have been recognized by healthcare market research firm Black Book as top performers in their respective markets
  • As a result of the merger, the combined company will be well positioned for further innovation in the revenue cycle management industry through leveraging their respective solutions to create an enterprise-wide RCM system

 

Fidelity National Financial’s Acquisition of T-System

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  • T-System is a leading provider of clinical documentation and coding solutions to hospital-based and free-standing emergency departments and urgent care facilities
  • T-System’s solutions are currently used in about 40% of US emergency departments and urgent-care centers
  • Fidelity National Financial will be able to further accelerate the future growth of T-Systems through multiple acquisitions and transitioning the Company to a recurring revenue business model

 

Allscripts’ Acquisition of McKesson’s Enterprise Information Solutions Business

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  • McKessson's Enterprise Information Solutions business is a provider of clinical and financial solutions supporting the full scope of care delivery processes
  • This acquisition further advances Allscripts strategy to offer the most comprehensive and high performing health IT solution suite
  • Allscripts will invest in and continue to offer Paragon as the integrated EHR and revenue cycle management solution for the small hospital market segment, while Allscripts Sunrise will continue as the primary platform for larger institutions, typically with highly complex service line needs

HCIT M&A and Private Placement Activity at a Glance

M&A Transaction Activity



M&A Transaction Activity Last 12 Months as of December 31, 2017 ($ in millions)7,8

 

Private Placement Activity



Private Placement Activity Last 12 Months as of December 31, 2017 ($ in millions)7,8

Summary of Technology IPOs

RECENT U.S. IPO ACTIVITY (BY OFFERING SIZE)7

  • Technology IPOs rebounded in 4Q 2017 after the underperformance of Snap and Blue Apron in 3Q 2017, which caused many potential IPO candidates to re-evaluate timing.
  • As the stock market completes one of its best years in history, driven largely by outperforming technology stocks, both technology startups and unicorns are increasingly viewing the public markets as a potentially interesting source of liquidity.
  • Notable technology companies such as Spotify and Dropbox, both who have already filed for an IPO, will test the IPO markets in 2018.

 

Debt Market Overview

  • Median middle market LBO loan multiples in 2017 increased slightly to 5.5x leverage.
  • Middle market LBO loan volume decreased to $1.1 billion in 4Q 2017, bringing total volume in 2017 to $6.8 billion.

  • Technology companies were the second largest recipients of middle market LBO loans in 2017, representing 15.5% of new issuance.
  • Median LBO debt percentages increased slightly to 53% of total purchase price in 2017.

HW&Co.'s Technology, Media & Telecom Group

Sources

1. Centers for Medicare & Medicaid Services

2. Office of the Actuary

3. U.S. Census Bureau

4. America's Health Insurance Plans

5. Accenture

6. HIMMS Analytics

7. FactSet

8. PitchBook

9. PNC Capital Markets

10. S&P LCD stats