Tag Archives: Predictive Analytics

Signify Premium Insight: Why Aledade Chose to Bring VBC IT In-House with Curia Acquisition

The news headlines continue to flow from Aledade, the largest network of independent primary care practices in the US. In the last month alone, it has added 450 value-based care (VBC)-focused independent practices to its network, acquired VBC analytics firm Curia and announced that Cigna’s Healthcare Medicare Advantage customers are now eligible to receive VBC from its network. 

The Signify View 

All three announcements speak volumes for the inexorable shift towards VBC in the US. Aledade is already deeply invested in this opportunity: more than two million patients in its network are covered by more than 150 VBC contracts across Medicare, Medicare Advantage, Medicaid and commercial payers. The company now boasts more than 1,500 independent primary care practices and health centres within the 40-plus VBC-focused Accountable Care Organisations (ACOs) it owns. And, as its network of VBC-focused primary care practices expands, demand for the resources these practices need to deliver VBC is growing. 

Many independent practices struggle to deliver VBC on their own, however. Most lack the resources, clout or economies of scale to invest in IT and other care management functions as Integrated Delivery Networks (IDNs) can. Instead, they must outsource some functions to organisations like Aledade, and its (smaller) competitors like Privia, Wellvana, Enlace Health, Pearl, UpStream and Rise Health.  

The Curia acquisition meets demand from Aledade’s large (and growing) practice network for improved analytics to close care gaps and improve population health. The deal also allows Aledade to maintain control of the VBC IT roadmap and associated costs as it scales its business and ACO network. But is also raises the question of why it chose to bring VBC IT in-house by acquiring Curia, rather than buying off-the-shelf or developing a solution in-house. 

Breaking down Barriers 

Curia’s platform uses advanced predictive analytics and tech-enabled workflows to identify patients who would benefit from certain interventions. According to Aledade, the AI algorithms extract insights from disparate data sources, provide more accurate predictions using past data, and optimise primary care workflows. In a VBC context, giving a practice the tools for highly targeted care and tailored interventions prevents unnecessary hospitalisations and care provision, reducing overall healthcare costs. 

As stated, practices face various challenges in delivering VBC. Their influence on a patient’s care journey is more limited than an IDN. Barriers to VBC adoption also include an aversion by some physicians to take on more risk given the financial, operational and administrative hurdles they face; practices’ relative lack of financial resources, effective coding and billing processes; and shortages of staff to manage reporting, general care management and outreach requirements.  

In response, many small independents now outsource IT, strategic care management (e.g. risk stratification to deliver clear, best practice guidelines on how to manage different cohorts in the most effective way), administrative and operational functions (e.g. manpower provision) etc – ingredients in helping a small practice operate more cost-efficiently.  

Anecdotally, providers we speak to describe benefits Aledade offers them: for example, the Aledade app helping with HCC coding or telling a practice why a patient was in the ER (helping with patient outreach by getting the patient to come to the practice first instead of going straight to the ER for less serious health issues); and Aledade recommending specialists (a low-cost way to manage referrals 

Unlocking the Value of AI 

Aledade is one of a growing breed of organisations offering a suite of functional VBC solutions to small practices. With Curia, it now offers the data aggregation, longitudinal patient views, health insights and care management workflow tools’ functionality essential in a PHM ecosystem. This gives Aledade a competitive advantage as it can now assume direct control of the IT roadmap development and associated IT costs, to ensure it meets the specific needs it has around care management, and do so within its budget.  

There is the wider, intrinsic value of AI to consider in this context too. AI can make sense of the vast amounts of data, EHRs, patient charts, labs and biometrics etc. To date, most VBC set-ups have struggled to fully access and utilise this data to inform decision-making, given that up to 80% of health data is unstructured and underutilised. 

AI also helps drive greater cost efficiencies by providing a wealth of cost-related data available to VBC programmes (for example claims data on billed services, drug costs, equipment etc). AI identify areas for cost improvement (e.g. searching EHRs to confirm medical necessity of procedures, drugs that require authorisations etc). However, these features are not unique; many other IT vendors offer this. This raises the question: why did Aledade believe it necessary to acquire an IT vendor to address these requirements?  

Outlier Aledade

Aledade is certainly an outlier in this regard. Most other organisations or VBC providers buy off-the-shelf or, less commonly, develop solutions in-house. But there are unique benefits to acquisition.  

This way, the Curia solution can be fine-tuned to the needs of Aledade’s customers, so it exercises complete control over solution development. Aledade also has the financial muscle to continue investing in the technology so it can scale.   

But why does Aledade not simply procure IT from a third party? There is a plethora of IT vendors offering solutions for VBC, from start-ups such as General Catalyst-backed Commure, established players such as Innovaccer, and big tech such as Amazon and Google. Clearly it feels that none offer IT with the feature sets it requires, or it feels it is a cost overhead it can better manage in-house. Interviews Signify Research has conducted with ACOs, and other organisations similar to Aledade, offer insight into the IT needs that other VBC vendors must focus on to dissuade other providers from bringing IT development in-house. They tell us that better integration is needed between EHRs and PHM analytic software (having separate logins for different apps contributes to a lack of holistic patient view and does little to improve care management workflow efficiencies); individual patient data may be absent, siloed, and unstructured, making it difficult to carry out effective analytics and risk-stratification processes aimed at closing care gaps, a critical task carried out by care management teams; and VBC vendors need to improve software for risk adjustment, workflows, and communication that can interface directly with EHRs and still be easy to use for providers and PHM teams.   

Unless these pain points are addressed, acquisitions (and self-developed solutions) by the likes of Aledade and Privia (that also has an internal tech solution) therefore have the potential to threaten the commercial VBC IT market.  

Riding the Waves 

As such, the Aledade-Curia axis stands in good stead in a changing US primary care market. Although it has an impressive 1,500 primary care practices within its ACO network umbrella, and with the prospect of strong VBC-fuelled demand from thousands more, the longer-term trend is for the number of independent practices to dwindle. IDNs and large providers like Optum have developed quite a taste for primary care practices and have the resources and technology in-house to do what Aledade sells. This will need to be factored into Aledade’s thinking in the coming years. 

For now, however, the Curia deal places Aledade in an excellent position. While AI is not the panacea to every VBC delivery challenge small (or any-sized) practices face in 2023, it is a prudent investment for organisations that want to use data-driven insights to improve population health.  

VBC IT vendors, on the other hand, will need to be mindful of the various pain points we describe in this Insight. Failure to do so will see more ACO networks do the IT themselves, and VBC IT vendors would stand to miss out on the huge opportunity presented by a rapidly-scaling primary care sector.

SPI Premium Insight: Spacelabs Targets Hospital Cost Concerns with PeraHealth Acquisition

Last month, patient monitoring device vendor Spacelabs Healthcare acquired predictive analytics technology firm PeraHealth. The deal offers Spacelabs impetus in a market where early-warning solutions alerting clinicians to patient deterioration, and that help reduce in-hospital mortality and unplanned transfers to the ICU, are in high demand. 

The Signify View 

The acquisition will look to address hospitals’ pressing needs to reduce costs in both a challenging economic environment that is squeezing healthcare budgets, and amid the ongoing shift towards value-based care (VBC) in the US. 

One way to do this is to move patients, where possible, out of high-cost care settings like the ICU into step down and general wards. But in doing so there is a clear risk of the patient being re-admitted to the ICU should their condition deteriorate. Tools that can predict or detect deterioration in a patient’s condition and prevent this costly eventuality is a potentially valuable weapon in a hospital’s armoury. This is especially true in the US where, against the backdrop of VBC, hospitals are ever more liable for care provision. Reimbursement funding is at risk if patient care falls below the standards expected. 

Three Routes to Market 

In response to this trend, an ecosystem of analytics start-ups is vying for share in a highly competitive space, and three clear routes to market have since emerged for these firms. 

Analytics and AI-Based Applications in Clinical Care (Source: Signify Research). Note this is not a comprehensive list and just provides example vendors 

Acquisitions by monitoring device vendors is one attractive route to market for analytics firms given strong demand for additional analytics tools that support the provision of patient monitoring. Other routes are to sell direct to the hospital – a challenging prospect in a very competitive space – or acquisition by other IT vendors. The Spacelabs acquisition of PeraHealth is a good example of the first route, and this draws parallels with Japanese vendor Nihon Kohden’s August 2021 acquisition of algorithm and software developer Advanced Medical Predictive Devices, Diagnostics and Displays (AMP3D). The technology developed via the acquisition has helped Nihon Kohden further compete with other patient monitor powerhouses such as Philips, GE Healthcare and Mindray. 

With a 3.0% global market share Spacelabs is the world’s seventh-largest patient monitor vendor (behind Philips, GE HealthCare, Mindray, Nihon Kohden, Hill-Rom (Baxter Healthcare) and Draeger Medical). However, it has established a solid customer base for its monitoring devices offering in the ICU, step-down and general wards.  

PeraHealth’s sepsis detection solution substantially elevates Spacelabs’ value proposition and deepens its portfolio which includes multi-parameter monitors, central stations and cardiac telemetry devices.  In 2021, multi-parameter devices accounted for most of Spacelabs’ revenues.  

However, sepsis is the leading cause of death from infection, accounting for one-fifth of deaths worldwide, and there is significant focus in health systems on monitoring at-risk patients. Claiming to offer the only FDA-cleared predictive analytics solution of its type, PeraHealth says it offers clinicians ‘a visual dashboard of a patient’s condition in real-time, helping them detect changes before they become life threatening.’ By incorporating the technology into its wider portfolio Spacelabs has ensured it has the capability to meet the growing interest in solutions that can reduce adverse events. 

PeraHealth’s respected ‘Rothman Index’ early warning system (EWS), used to predict cardiac and pulmonary arrest deterioration and mortality, is also attractive in the hospital market. Hospitals’ own early warning protocols are often manual, and so interest in automated early-warning systems that flag patient deterioration is rising with mounting pressure on stretched hospital staff. With the Rothman Index under its umbrella, Spacelabs joins the likes of Philips IntelliVue Guardian Solution, Capsule Technologies’ Early Warning Scoring System (EWSS) and Bayesian Health’s Targeted Real-Time Early Warning System (TREWS), an AI-powered solution shown to reduce mortality from sepsis by 18%, in having an in-house solution. 

Although currently viewed by healthcare professionals as a ‘nice to have’, interest in analytics is increasing with the realisation that healthcare providers are increasingly under strain from increased hospital admissions and fewer caregivers. Device vendors that fail to acquire, or develop their own, analytics solutions risk being left behind. 

ICU Still the Focal Point 

Although non-ICU settings are beginning to assume greater importance for analytics vendors the ICU remains the key market driver and a focal point for them. CLEW Med and Ambient Clinical Analytics are just two vendors that were launched on the premise of strong demand for physician ICU support during the COVID-19 pandemic, when staff and clinical resources were stretched to the limit. Despite the cost-motivations in shifting patients to step-down and general wards, both monitoring device and analytics vendors until now have largely focused on the ICU. Philips says 99% of its remote clinical surveillance still happens in the ICU and very few vendors, with perhaps the exception of GE HealthCare, have successfully moved beyond this setting. 

Crowded House 

As we described earlier, acquisition is one of the keys to success – or even survival – for some analytics firms. Competition here is becoming intense, with EHR vendors, tele-ICU vendors and high acuity Clinical Information System vendors also developing their own analytics platforms. Epic’s proprietary sepsis prediction model claims to reduce sepsis mortality by 20%. Given the saturation of the global acute EHR software market in the US, EHR vendors are, among other strategies, diversifying into clinical software provision – often in the form of ancillary ‘add-on’ modules. In the longer term, standalone predictive analytics vendors will find it hard to compete with Epic etc as more IT vendors (EHR and CIS) make analytics a native component of the EHR/CIS. 

Even large health systems and hospitals are developing their own predictive analytics technology, employing data analysts and scientists to build open-standards algorithms for high acuity prediction and monitoring applications. 

Again, analytics vendors may choose to partner with EHR, high acuity CIS or high acuity telehealth vendors, integrating their analytics tools with high acuity vendors’ broader ICU information systems or teleICU solutions. PeraHealth sells its solution in this way via a partnership with high acuity teleICU vendor Caregility. 

Primed to Address Pain Points 

The PeraHealth acquisition marks another confident step forward for Spacelabs. Having benefitted from the COVID-induced demand boost for patient monitors at all acuity levels, the company is now primed to address some of the pain points experienced by hospitals in 2023. Device flexibility has become a key factor in purchasing decisions, with vendors updating their product portfolios to offer solutions that can flex up or down the level of functionality depending on the patient’s requirements or demands on hospital facilities. Today, that demand is to reduce the cost of care provision by removing patients from the ICU as and when it is safe to do so. 

In the media announcement accompanying the acquisition, Spacelabs said that together it and PeraHealth will ‘write the next chapter in digital health innovation’. They will not be the only firms with such lofty ambitions, and Spacelabs is far from being a dominant force in patient monitoring. While the Spacelabs acquisition brings together many complementary facets, there is a lot of work ahead for both firms before the next chapter is written.