HW Healthcare IT Introduction

Harris Williams (“HW”)

  • 25+ years and more than 1,000 closed transactions
  • 350+ professionals across eight office globally
  • 170+ closed transactions in the last 24 months
  • 10 industry groups

Focused Advisory Services

  • Mergers and acquisitions (M&A)
  • Capital raises
  • Corporate divestitures

Consistent Recognition for Quality

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HW Technology, Media & Telecom (“TMT”) Group

  • 35+ dedicated TMT professionals
  • TMT offices include Boston, San Francisco, and London

Key TMT Themes

  • Sass / Cloud
  • Data & Analytics
  • Digital Transformation
  • A.I. / Machine Learning

Horizontal Focus Sectors

  • Application Software
  • Cloud Managed Services and Hosting Solutions
  • Compliance Solutions
  • CRM and Marketing Automation
  • Human Capital Management
  • Infrastructure and Security Software
  • IT and Tech-Enabled Services
  • Marketing, Research, and Insights Software

Vertical Focus Sectors

  • Architecture, Engineering, and Construction Software
  • Education Technology and Services
  • Energy Technology
  • Facilities and Real Estate Software
  • Financial Technology and Payments
  • Government Technology
  • Healthcare IT
  • Industrial and Supply Chain Technology
  • Internet and eCommerce
  • Retail Technology

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    Healthcare IT Taxonomy

    Patient-Facing Solutions

    • Member Onboarding / Portals
    • Patient Outreach & Campaigns
    • Patient Engagement / Education
    • Digital Wellness Tools
    • Benefits & Consumer-Directed Healthcare Tools
    • Information Tools & Online Media

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    Care Delivery

    • Operational Efficiency
    • Inpatient – Clinical
    • Outpatient – Clinical
    • Post-Acute – Clinical

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    Pharma & Devices

    • Development
    • Trials
    • Commercialization
    • Adherence
    • Regulatory

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    Revenue Cycle Management

    • Charge Capture & Coding
    • Claims Management
    • Adjudication / Appeal / Review
    • Payment Processing
    • Patient Collection
    • Other RCM Tools
    • Regulatory & Analytics

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    Population Health & Risk Management

    • PHM Informatics
    • Data Aggregation & Normalization
    • Privacy / Security
    • Information Sharing / Interoperability
    • Population Analytics
    • Care Coordination

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    Healthcare IT Market Commentary

    • The current COVID-19 pandemic has highlighted the importance of patient access and telehealth tools, as doctors work to continue treating patients while maintaining social distancing standards
    • Recent operational and clinical challenges in the response to COVID-19 have highlighted fundamental inadequacies that require next-generation technology solutions throughout the healthcare ecosystem
    • Increasingly complex reimbursement arrangements in the face of rising healthcare costs are supporting strong payer interest in specialized cost containment and payment integrity solutions
    • The ongoing transition to, and adoption of, value-based reimbursement models has highlighted an urgent need for cost control for provider organizations, underpinning demand for operational optimization tools across a number of categories
    • The consumerization of healthcare and heightened consumer expectations of the “shopping” experience continue to put pressure on healthcare organizations to adopt patient engagement and retention solutions

    Healthcare IT Market Trends

    Patient-Facing Solutions

    • Providers are adopting patient experience platforms that drive engagement across the continuum, provide care givers with a holistic view of the patient, and improve RCM operations through proactive confirmation of insurance and billing information
    • Patient engagement vendors, whether they sell to providers or payers, are thinking strategically about how to leverage the "channel" to the patient to amplify clinical impact by delivering content that enables patients to play an active role in their own healthcare

    Care Delivery / Operational Efficiency

    • With nearly 50% of physicians employed by provider organizations, efficient credentialing, onboarding, and continuous monitoring are becoming an acute revenue and compliance challenge, leading to a surging demand for comprehensive healthcare specific workforce management and human capital management solutions
    • The ongoing transition to value-based care has increased pressure on hospital and health systems' margins, driving organizations to invest in cost-control solutions, primarily focused on procured goods and services, consumables, and third-party services

    Care Delivery / Clinical 

    • Social distancing requirements and changes to reimbursement rates as a result of the spread of COVID-19 have rapidly accelerated the adoption of telehealth solutions by providers and payors across specialties
    • The pharmacy is playing an increasing role in actively managing patient care: the average patient sees their pharmacist 9x as often as they visit their physician

    Revenue Cycle Management

    • While patient-pay modules had historically driven limited value for providers as standalone solutions, their deeper integration into both the episode of care and the broader RCM ecosystem is driving both provider adoption and accelerated investment interest
    • The market is continuing the trend of investment in, and provider adoption of, tools for management of complex claims (e.g., workers' comp, car accidents) and AI-enabled charge-capture and billing solutions

    Pharma and Devices

    • The convergence of clinical and commercial objectives and the paradigm shift towards specialty drugs with narrow patient populations has given rise to critical challenges around market access, go-to-market strategy, and clinical trial enrollment
    • The prevention of unnecessary treatment and medication adherence has been helped by increased patient / physician interaction and shared institutional knowledge

    Population Health 

    • Lack of interoperability across EMRs and other clinical systems remains a fundamental barrier to aggregating patient data into a single, uniform source of truth, though recent CMS rules will likely set the process in motion over several years
    • The rapid rise of Medicare Advantage plans and commercial, value-based arrangements underpins demand for sophisticated care management solutions that can deliver a holistic view of the patient or member and rapidly close gaps in care

    Impact of COVID-19 on Healthcare Technology

    The global COVID-19 pandemic represents a pivotal moment for healthcare technology as hospital, provider, patient, and government behavior changes dramatically, with significant short- and long-term ramifications.

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    Telehealth

    The outbreak of COVID-19 has established telehealth as a new pillar in care delivery across specialties for the future. Reimbursement changes have brought telehealth payments more closely in line with in-person visits. Going forward, consumer pressure and government advocacy will be necessary to maintain payments to incentivize doctors to offer virtual visits.

    Specialty EMRs and Practice Management

    Specialty EMRs and practice management vendors, particularly those with a revenue cycle services and/or payment processing offering, saw a steep decline in revenues and profitability as outpatient clinics. With clinics re-opening and non-emergent procedures returning, revenue should steadily increase.

    Supply Chain

    The COVID-19 outbreak has exposed the integrity of medical supply chains as a weakness within the healthcare system. Impacts on supply chains have stressed hospitals’ ability to replace vital supplies as a reliance on single vendors has led to a shortage of critical medications, PPE, and equipment.

    Pharma and Clinical Trials

    Near-term new trial activity will see a reduction as CRO access to patients is limited and sites are closed. CROs are now running decentralized, virtual trial sites aided by the use of telehealth and remote monitoring tools to keep trials progressing. With hospitals and clinics closed to sales reps, limited access to HCPs is expected to slow pharma sales and commercial investment in the near-term.

    Patient Safety

    Patient safety and clinical surveillance tools are providing providers and administrators with the tools to manage patient and staff activity in their hospitals in real time. Providing stakeholders with the ability to monitor and assess both patient and provider interactions will enable hospitals to more effectively manage outbreaks.

    HCIT Public Market Observations1

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    As of June 30, 2020.

    Public Comparables

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    As of June 30, 2020.

    ($ in millions, excl. stock price)

    Select Healthcare IT M&A Transactions1

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    ICONIQ Capital’s Investment in QGenda

    • QGenda is a leading provider of SaaS-based workflow management software to the healthcare industry
    • The Company’s scheduling, clinical capacity, and labor analytics solutions have been adopted by over 3,000 customers across more than 30 medical specialties
    • With the new investment from ICONIQ Capital and continued financial support and industry expertise of Francisco Partners, QGenda will focus on expanding its footprint and growth through new product investment and unparalleled customer service
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    Rubicon Technology Partners’ Acquisition of Central Logic

    • Central Logic is a provider of comprehensive patient logistics and care orchestration software for health systems
    • The Company’s SaaS solution provides real-time visibility and business intelligence tools to manage complex patient transfers across integrated health systems
    • The investment from Rubicon Technology Partners will be used to accelerate growth through product innovation, sales expansion, delivery and customer support, and pursuit of acquisitions
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    Optum’s Acquisition of NaviHealth

    • NaviHealth is a provider of a software platform for health systems and payers to manage patient care post-hospital discharge
    • The Company's platform manages post-acute services for over 4.5M Medicare Advantage members and nine of the top 10 largest health systems
    • Following the acquisition, naviHealth's post-acute clinical model and data-drive insights will be paired with Optum's existing community-based health care and clinical capabilities to meet the demand for personalized, value-based care coordination for complex health conditions across the continuum of care
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    Change Healthcare’s Acquisition of eRx Network

    • eRx Network is a provider of real-time, comprehensive data-driven solutions for pharmacies focused on improving operational efficiency and maximizing reimbursement
    • The Company’s solutions integrate directly into existing pharmacy workflows to offer claims processing and editing, real-time insurance verification, e-prescribing, and claims billing
    • The addition of eRX will allow Change to offer a broader portfolio of solutions to pharmacies and life sciences companies while increasing market share, advancing innovation, and developing new solutions
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    The Blackstone Group’s Acquisition of HealthEdge

    • HealthEdge is a provider of core administrative processing systems solutions (“CAPS”) to healthcare payors across a range of market segments including government, commercial, individual, and dental
    • The Company’s solutions enable payers to seamless and efficiently administer benefits, configures plans, manage providers, and enroll participants
    • The Blackstone Group will provide HealthEdge with the operational and financial resources necessary to accelerate growth and further disrupt the traditional payer technology market

    What We’re Reading

    The Potential Security Crisis Presented by Rapid Telehealth Rollouts

    Healthcare IT News  June 10, 2020

    The COVID-19 pandemic has caused an unprecedented rise in telehealth technologies and services. While this rapid change has been beneficial for patients, it has also created increased opportunities for cybercriminals to take advantage of the large amount of health data being generated. Medical devices have historically been considered problematic due to their light operational footprint, which doesn't allow for much security processing-power, and for their close links to the cloud, which can be easily accessed. In order to combat these risks, it is suggested that hospitals conduct a third-party risk assessment on any service being used, and ensure that all vendors have robust security programs in place.

    Read the full article here.

    How AI-Driven Remote Healthcare Monitoring Improves Health and Peace of Mind for Vulnerable Patients

    Tech Radar  June 10, 2020

    Over the past ten years there has been an extraordinary amount of innovation within the digital healthcare space. Artificial intelligence and machine learning-driven remote healthcare technology has allowed for improved outcomes and an increase in quality of life for patients. Benefits like reduced time spent in hospitals allows for a reduction in patient exposure to systemic diseases like COVID-19 and protects the lives of both healthy and vulnerable patients alike.

    Read the full article here.

    What Health Plans Must Know About Telehealth's Immediate Impact on Risk Adjustment

    MedCity News  May 31, 2020

    When COVID-19 began and telehealth was on the rise, there was concern that health plans would not have access to risk adjustment data that was being generated through telehealth visits. When CMS approved telehealth as a means for health plans to gather risk adjustment data in April, health plans were relieved but in need of a way to implement successful risk adjustment initiatives. Focusing on solving disjointed telehealth strategies and helping strained PCPs increase engagement from their patient populations will allow health plans to ultimately find success.

    Read the full article here.

    Why COVID-19 is Proving a 'Great Equilizer’ for Mental Health Care

    Fierce Healthcare  May 29, 2020

    Virtual behavioral health care has been on the rise as COVID-19 has come to the forefront of the healthcare landscape. Social isolation, financial difficulties, and job loss are all contributing to the negative mental state of many individuals, and virtual care allows for the proactive treatment and management of these emotions through a tumultuous time. According to Teladoc, this increase in behavioral healthcare has shattered the stigma around seeking treatment for mental health issues, which is expected to continue post the pandemic.

    Read the full article here.

    COVID-19 Tests the Value of Artificial Intelligence in Medicine

    Modern Healthcare  May 22, 2020

    Several research teams throughout the country have repurposed AI programs that were developed in calmer times to address issues with COVID-19. Machine-learning programs sift through millions of pieces of data looking for patterns, which can be helpful but also disruptive as they tend to result in answers that are not yet standard procedure and can confuse practitioners. These programs are exciting and offer new insights into disease, but should be used cautiously by practitioners until there has been validation of the results.

    Read the full article here.

    M&A Transaction Activity

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    Private Placement Transaction Activity

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    Care Delivery - Landscape

    Inpatient & Clinical

    To view full market map please contact: *TMT_HCIT@harriswilliams.com

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    Select HW TMT Transactions

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    1. CapIQ

    2. PitchBook

     

    The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent. 

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