Clarify Health acquires Embedded Healthcare to use behavioral economics for value-based care

Enterprise analytics company Clarify Health is enhancing its value-based care offerings with the acquisition of Embedded Healthcare.

Clarify Health’s platform for value-based payment analytics will leverage Embedded Healthcare’s behavioral science tools, providing data and incentives to clinicians to simplify value-based contracting and reduce the cost of care for patients.

Embedded Healthcare was spun out of the University of Pennsylvania’s Healthcare Transformation Institute in 2019 based on research in behavioral economics and value-based care model design.

By incentivizing behavioral changes in providers, the startup aims to create savings opportunities and improve outcomes through decisions like choosing higher-value care sites for elective procedures.

“Clarify and Embedded Healthcare complement each other in a way that will help the industry achieve higher-quality healthcare. Clarify’s insights identify opportunities for value across the delivery system, and Embedded has created the incentive framework and behavioral nudges that drive change into the daily decisions of providers, regardless of what payment models they’re in today,” said Keith Florance, president of Embedded Healthcare, in a statement. “Combined, we bring to market unique capabilities and analytics that will accelerate high-value clinical behavior, reframe a positive payer-provider relationship, and displace ineffective models.”

The companies did not disclose the terms of the deal.

The entire Embedded Healthcare team has joined Clarify as part of the deal. Florance will also become senior vice president of the company’s payer solutions unit.

Launched in 2015, Clarify unites longitudinal data from more than 300 million patients drawn from government and commercial claims, electronic health records and prescriptions.

The company last banked $115 million in a series C round in March 2021 and has raised $178 million to date.

“Behavior change is often the last mile to driving lasting impact in care models. Our health plan and value-based customers’ needs are increasingly complex, driven by intricate analytics requirements across multiple provider contract types,” said Jean Drouin, M.D., CEO of Clarify Health, about the Embedded Healthcare acquisition. “With the addition of Embedded Healthcare, we further deliver on our promise of being the most trusted value-based payments platform. Together, we can affect the mindset and transformation on the ground so that care is delivered and paid for in a better way.”

The analytics provider notched another value-based care acquisition in October, grabbing Apervita’s value optimization business.

The software startup’s unit provides technology to help providers link financial reporting with clinical action for value-based care and payment contracts.

Value-based care models picked up steam during the pandemic as mounting evidence demonstrated their potential to lower costs and improve outcomes.

Medicare Advantage members receiving value-based care in 2020 were more likely to seek preventive care compared to traditional Medicare recipients, according to a November 2021 report by Humana.