PHM Vendors Pivoting Towards New Revenue Streams

Publication Date: 20/02/2019

While at last year’s HIMSS the focus of many PHM vendors was firmly rooted in saying ‘the Social Determinants of Health’ as many times in one meeting as possible; this year there was an unexpected muted response around buzzwords such as AI or blockchain.

Unsurprisingly, 2018 had not been a breakthrough year for many, with the CMS Pathways to Success programme continuing to cause uncertainty around the ACO push towards VBC. This has caused some vendors to look at their existing portfolio to assess how it could be better used serving new markets.

Better late than never

Meditech announced at HIMSS the release of its Expanse Population Health solution. Meditech already had several elements of PHM functionality on offer but had not brought it together into a complete PHM platform. It will leverage its partnership with Arcadia to gain expertise within the data aggregation and risk stratification modules, while also centralising and standardising its workflows and toolkits within the new platform.

Meditech has one of the largest hospital installed bases in the US (estimated to have exceeded Allscripts prior to its McKesson EIS buy). But, selling its pure-play EHR solution has limited its ability to upsell and leverage new business from that customer base. To put it into perspective Meditech’s 2018 revenue was just below $500M, while Allscripts has guidance to reach >$2B. While its entry into the market is late, there will be potential for Meditech to leverage its existing install base and grow within this market.

A Shift in Focus

NTT Data’s partnership with Enli has resulted in a new financial/ outcomes focused solution – Contract Intelligence – taking Enli in a slightly different direction with an increased focus on the financial improvements that care coordination can bring. Enli also announced its release on the athenahealth marketplace, building on its existing success from providing its CareManager solution to Virence Health and via the Epic App Orchard.

Meanwhile Lightbeam announced the release of its PHM Platform Version 3.0, with a range of updates focused on workflow back-end improvements to help monitor Medicare Advantage measures and reimbursement performance metrics.

Going Beyond the Provider Market

Allscripts was pushing the Veradigm brand, its new payer and life sciences division, announced last year, as it looks to target new verticals. It took it one step further at HIMSS with Veradigm entering an agreement with NextGen to improve data sharing across common health plans and labs.

Cerner announced in 2018 its push into the payer market through a partnership with Lumeris. In its investor outreach during HIMSS and associated new investor deck it showed it already has plans to extend further beyond the payer market.

Despite the deck also including some bold statements (which Signify Research doesn’t agree with), like a forecast showing the PHM market will grow to $45B by 2021, larger than its projected EHR market size, it outlined six key market segments to drive ‚Äòstrategic growth’. These included:

  • Managed Medicaid, where vendors such as ZeOmega and Optum already operate
  • Long-Term and Post-Acute Care, where Hyland has been operating with its interoperability and data sharing functionality
  • Behavioural health, where AdvancedMD and EzCareTech have had some success with their EHRs
  • CareAware, Cerner’s EHR-agnostic connectivity solution

We don’t expect this strategy to be limited to just Cerner. Many pure-play PHM vendors had noted that the larger EHR firms had become more aggressive in trying to sell their complete suite of digital solutions, driving down average revenues per life managed. The provider market is becoming more of a battlefield, with many vendors losing patience with providers unwillingness leave the safety of a FFS model.

While announcements are a long-step from winning within these new verticals, a shift away from providers is a strategically sound move that offers vendors new revenue streams beyond their traditional verticals, where growth has been below expectation.

The Interoperability Hangover from HIMSS

Another area which also received significant attention during the conference presentations, but perhaps less so directly on the exhibition floor, was the HHS announcing its proposals for interoperability in a 724-page document the weekend before the conference kicked off. Vendors will no doubt have a better chance to digest the document in their post-HIMSS hangover; but the proposed changes do represent a push in the right direction for the interoperability headache in the US.

In some ways it still feels the US has been trying to run before it can walk with population health and the drive for a longitudinal care record. Many single-payer markets such as Poland are focusing solely on issues around interoperability before scaling integrated care pilots. The likes of France (with its DMP) and Germany (through its Telematics Infrastructure) are attempting to deliver a national framework where EHRs can send and receive clinical data based on a National Identifier before moving onto more lofty projects aimed at risk stratification.

The US push for value-based care has driven the PHM agenda, while interoperability outside of large provider networks continues to limit access to a complete patient record. The proposed changes will put more of an emphasis on EHR vendors driving these solutions and aims to stamp out information blocking, paving the way for a more patient-focused EHR system. As an unintended consequence, legacy EHR solutions in smaller practices or hospitals could need to be replaced by solutions complying with these new rules.

About the Author

Michael has 5 years’ experience as a Senior Market Analyst, working across multiple industries and specialising in developing forecasting models and database management. Michael joined the Signify Research digital health team in 2018 and currently leads our PHM coverage, as well as specialising in the EMR/EHR and RCM markets.