In mid-February, healthcare tech and analytics company Veradigm and HealthVerity, a leading real world data (RWD) marketplace, announced they would be teaming up to ‘advance research and improve patient care for cardiovascular disease and diabetes patients’.
Veradigm says the collaboration will see full interoperability between Veradigm’s Cardiovascular and Metabolic Registries data and de-identified patient data on HealthVerity’s IPGE platform.
The Signify View
The tie-up reinforces Veradigm’s strategic focus on RWD and life sciences (the company was the RWD and life sciences arm of EHR vendor Allscripts until the end of 2022, when Allscripts rebranded as Veradigm). It is also Veradigm’s first partnership free of the Allscripts name.
The company’s journey to RWD began in earnest in March 2022 when Allscripts (of which Veradigm was a small but growing unit at the time) was split in two after struggling for several years to grow revenues and inpatient/health system market share. The bulk of pre-split incarnation of Allscripts’ EHR portfolio – inpatient solutions Sunrise, Paragon and Opal, TouchWorks ambulatory EHR for large practices and its population health management tools – was sold to IT monolith Harris Computer Corporation for $526M. This business now operates under the Harris umbrella as Altera Health, and accounted for $927.6M of Allscripts’ total revenues in 2021).
The split left Allscripts with two EHR products for small practices: Allscripts Professional, and Practice Fusion (a suite of originally free EHR products that Allscripts acquired in early 2018), as well as Veradigm. Combined, these businesses generated $552.2M in revenue in 2021. Veradigm was established with the aim of using Practice Fusion’s EHR data to provide research tools for payers, providers and life science companies for research, drug discovery, clinical trials and RWD-type applications. On 1 January 2023, the remaining Allscripts business were rebranded as Veradigm.
Veradigm’s decision to gradually distance itself from pure-play EHR is a positive step. Its RWD business (particularly that to payers/lifescience) is growing faster (15% for payer/lifescience in 1-3Q22). While its provider revenues, largely driven by Allscripts Professional and Practice Fusion EHRs, while still the bulk of the business, are growing at a much slower rate (4% 1-3Q22).
By selling much of its EHR portfolio to Harris, Veradigm is now free from Allscripts’ shackles and, should it choose, can team up with other EHR vendors who offer greater value (as well as develop partnerships with RWD vendors like HealthVerity). As Veradigm focuses on growing its RWD and life sciences focus for the business.
Growth Goals
On the face of it, the collaboration brings together two heavyweights which, in theory, should accelerate Veradigm’s RWD and life sciences business growth. HealthVerity is one of the largest platform RWD marketplaces, offering as a repository of healthcare and consumer data, and through the partnership it will act as a conduit for Veradigm to sell its ‘regulatory quality’ cardiology and metabolic registry data to pharmaceutical firms and other researchers.
Veradigm’s Cardiology Registry is the largest US outpatient cardiovascular quality improvement registry, with more than 102M records and 13,000 providers. Its Metabolic Registry has 79M records and 11,100 providers. Veradigm’s EHR data of more than 176M patients from the past five years is also incorporated in both registries, as well as data from 300M medical claims made over two years. This ancillary claims and registry data is much more structured and usable than healthcare data (see diagram below). Based on population health data, it is already growing quickly and should continue to do so.
Beyond the HealthVerity tie-up, Veradigm will also be keen to capitalise on a concept known as ‘data gravity’, a kind of snowball effect where the more data a company has, the more data it attracts (essentially because it is regarded as a good host in which to commercialise it). However, if it wishes to take advantage of this concept, Veradigm will need to partner with, or have access to, larger volumes of clinical data. Clinical RWD (cRWD) comprises just a small percentage of RWD projects today, but is growing quickly, particularly multi-modality projects which combine types of cRWD and cRWD/RWD.
cRWD is also the hardest type of data from which to profit, because curating data is hard – for example, in the anonymisation of unstructured data, as well as GDPR and HIPAA compliance. There are hundreds of ways to de-identify data, but the process of de-identification ironically risks losing some original value in that data.
So while ancillary RWD is an easy, low value path to growth for Veradigm, the real potential riches lie in also accessing cRWD.
The cRWD Challenge
We discuss the challenges of exploiting cRWD in this recent Insight. cRWD remains firmly in its formative stages, and is difficult to work with, limiting mass utilisation. While the potential of cRWD is undoubtedly vast (and Veradigm already has an advantage over other cRWD vendors like GE and Philips given that it has more immediate, and broader, access to EHR data and social determinants of health), data curation is time- and labour-intensive. Despite the upside potential, companies like Veradigm would be advised to tread carefully, and avoid betting too heavily on the potential of curated data until NLP technology enables the curation process to become more automised. A more logical approach will be to grow its registry and claims RWD businesses (which are already the bigger part of the company) and, instead of participating directly in cRWD, it may choose to circumvent the issue of clinical data curation and partner out with more vendors like HealthVerity instead.
A more immediate problem for Veradigm as it tries to accelerate growth in its clinical RWD business is that it lost many resources in the portfolio sale to Harris. Notably, Allscripts’ dbMotion data integration solution. This would have been a valuable weapon for Veradigm in harmonising Oncology Information System (OIS), Laboratory Information System (LIS) and clinical data across its PHM portfolio, but it is now in Altera’s hands. Veradigm also lost some Allscripts inpatient information in the company break-up.
That said, dbMotion was quite an old technology. An aggregation engine is truly useful only if it can curate data and make it automatically usable. Maybe there is an opportunity here, therefore, for Veradigm to develop a new data aggregation solution which will better serve its own strategic ambitions.
Race Against Time
As a public company, Veradigm does not necessarily have the luxury of time to achieve growth. It will need to satisfy its shareholders that its decision to shift focus to RWD is the right one.
In a 2023 Financial Guidance report, the company says it expects revenues of between $640M and $660M in 2023 (from $552.2M in 2021), and to achieve this it will need to maintain some growth via cash cows (its EHR product lines). In a 2020 Life Sciences Briefing, Veradigm highlighted life sciences and payer solutions as high growth areas for the business, and it really needs to start performing.
Clinical RWD promises much, but with the challenges of curating data it will take time to unlock the obvious potential. In any case Veradigm will also be up against other EHR vendors which are predicted to continue to dominate the clinical RWD market for the foreseeable future. Wider partnerships between Clinical RWD vendors and generalist RWD providers will be increasingly required as requests for combined clinical and non-clinical datasets increase. Again, this may be a strategic direction option for Veradigm, a company with plenty going for it as it moves into new territory.