With three big purchases in less than a month, Ingenix – the IT arm of the payer UnitedHealth – continues to bolster itself for a fast-changing healthcare environment.
With its acquisition of Picis in July, and Executive Health Resources and Axolotl in August, Ingenix looks to be moving aggressively as consolidation continues apace.
Of course, Ingenix is a firm that's bought more than 50 companies over the past decade, and whose self-stated raison d'etre is "to acquire and integrate the world’s best-in-class healthcare information technology capabilities." It's relatively used to mergers such as these. But the recent flurry of activity suggests Ingenix is fast positioning itself to better capitalize on health reform and the stimulus-abetted IT boom.
First up was Wakefield, Mass.-based Picis, which makes information solutions for the high-acuity areas of hospitals – emergency departments, surgical suites (ORs and recovery rooms) and intensive care units. With systems installed in some 1,900 hospitals in 19 countries, the acquisition will enable Picis to build on its market-leading platform with additional resources, information and analytics expertise from Ingenix.
"We felt strongly that under healthcare reform we would need to establish larger partnerships to leverage our products and knowledge more rapidly and on a bigger scale because time to market is so crucial now," says Picis CEO Todd Cozzens.
Moreover, he points out: "By 2020 the population over age 60 is expected to double from the year 2000. Where does the aging population get most of their care? The answer is surgery, intensive care and emergency care. High acuity care today accounts for nearly 70 percent of hospital revenues and costs – and the average patient acuity is rising every year. Nowhere in healthcare is there such a need for tools to make the care process more efficient than in high acuity."
Of course, the move will also position Ingenix well in a segment that's growing fast and "is expected to be further stimulated by the $46 billion HITECH Act," says Ingenix communications director Kyle Christensen. Indeed, he notes high-acuity care "has been growing at nearly twice the rate of the overall HIT market over the past several years."
It will also help Ingenix and UnitedHealth keep tabs on hospitals that are most cost-effective in those areas, only including the most efficient exemplars in their network. “Tremendous opportunities exist to use information and technology to modernize the high-acuity area, delivering better care and greater efficiency to these high-volume areas of the hospital, where resource consumption is often at its greatest," said Ingenix CEO Andy Slavitt.
Next acquisition
Barely two weeks later, Ingenix announced its purchase of Executive Health Resources (EHR), of Newtown Square, Pa., for a reported $1.5 billion. The firm specializes in medical necessity compliance and physician medical management solutions. It serves more than 1,100 hospital and health systems nationwide. That, "combined with Ingenix’s unmatched health information and analytics capabilities, will help our clients thrive in the evolving regulatory environment for healthcare," said Slavitt.
In an effort to reduce federal payment discrepancies, hospitals must by law perform compliance reviews for services provided to patients covered by Medicare and Medicaid to ensure that care is medically necessary and is delivered in the proper setting. EHR provides evidence-based clinical intelligence and physician advisers well versed in CMS regulations to help hospitals comply with such provisions.
"The regulatory landscape is complex and ever-changing, and compliance has become crucial," said Robert Corrato, MD, president and CEO of Executive Health Resources. "As we continue to support our clients in this rapidly growing market with solutions that simplify that process, Ingenix’s impressive data assets and sophisticated technologies will help us to more quickly to deliver critical, technology-enabled intelligence for our clients."
In the wake of healthcare reform – with its focus on reducing costs even as hospitals and health systems serve an increasing volume of patients with government-sponsored health plans – UnitedHealth, through Ingenix, is buttressing its means of using health IT to home in inefficiencies, ensure compliance and sniff out fraud.
"Ingenix’s array of solutions and analytical services, coupled with our deep medical necessity compliance expertise, will allow us to develop powerful solutions to assist providers in overcoming many challenges," says Michele Bowman, EHR's director of corporate communications.
"Our technology-enabled expert Physician Advisor services and intelligence will further support Ingenix’s efforts to deliver solutions that help reduce administrative complexity and improve operational efficiencies, while maintaining the highest levels of patient care."
And onward.
In mid-August, Ingenix announced that it would be buying Axolotl, the San Jose-based provider of health information exchange (HIE) services.
"HIEs are bringing us closer to the point where all the healthcare professionals patients select to oversee their care can connect to share information and optimize outcomes," said Andy Slavitt, chief executive officer of Ingenix. "We will work with Axolotl to continue to meet the needs of multiple HIE stakeholders and to expand its technologies that serve healthcare communities."
"This is a combination of two innovative, creative workforces, and it comes at an important moment for HIE development," added Ray Scott, Axolotl's CEO. "Ingenix will enable us to accelerate our growth and help us continue to deploy our leading secure health information technology."
What comes next for Ingenix is anyone's guess. But it's safe to assume that something else will.
