Cloud analytics company Clarify Health buys Apervita's value optimization business

Mergers and acquisitions deals consolidation
Value-based contracting has grown since the COVID-19 pandemic demonstrated that providers in value-based contracts fared well. Jean Drouin, M.D., CEO of Clarify Health, predicts that the move to value-based care models will accelerate in the next two years. (Getty/Kritchanut)

Fresh on the heels of its $115 million series C, Clarify Health is making a key acquisition to bolster its integrated analytics platform for health plans with a focus on accelerating value-based care models.

The company plans to acquire software startup Apervita's value optimization business, which combines cost, quality and outcomes performance analytics with financial insights into a "single source of truth" that enables payers and providers to drive better care and outcomes, according to Jean Drouin, M.D., CEO of Clarify Health.

The deal includes all intellectual property and employees, but financial terms of the acquisition were not disclosed.

Apervita will continue to focus on providing solutions for digital quality measurement and clinical intelligence. Apervita will also focus on enabling the learning health system, a framework that drives better outcomes and cost efficiencies across the health ecosystem, according to executives.

To succeed in value-based care and payment contracts, health plans need to build trust with providers and help them tie financial reporting to clinical action. Clarify Health's strength lies in clinical measurement and benchmarking, while Apervita provides technology to improve the financial and contractual reconciliation for value-based models.

"With the combination of those two, we will be able to provide payers, and in particular the Blues plans, with automated platforms to accelerate the operations of value-based care models," Drouin told Fierce Healthcare.

The acquisition bolsters Clarify’s integrated analytics platform for end-to-end value-based contract design, payments reconciliation, clinical performance assessment and reporting. 

RELATED: Clarify Health scores $115M in series C funding to grow AI-powered data analytics platform

“Our health plan and value-based customers’ needs are increasingly complex, driven by intricate analytics requirements across multiple provider contract types. A trusted platform that can objectively and transparently analyze data from plans and providers is a foundational enabler to the success of new payment models," Drouin said.

The shift from fee-for-service models to value-based care and payment models has been steadily increasing but at a slow pace. "One of the reasons that value-based care may have taken longer to be adopted than might have been hoped for is the difficulty in managing the programs themselves," Drouin said. "You need the ability to baseline and measure clinical care in a way that is trusted by clinicians, and you need to be able to do the actual math to calculate who gets what bonuses and penalties, based on rules in the contract."

But value-based contracting has grown since the COVID-19 pandemic demonstrated that providers in value-based contracts fared well. Drouin predicts that the move to value-based care models will accelerate in the next two years.

"You will see a majority of the 30 to 40 largest payers announce that they have a meaningful value-based care program with health systems and provider partnerships in the next 24 months, especially with the Blues plans," he said.

Apervita was looking to build out its clinical analytics capabilities but recognized Clarify Health's technology would help accelerate better solutions for value-based care, Kevin Hutchinson, CEO of Apervita, told Fierce Healthcare.

"They have strengths where we had weaknesses, and they are looking to fill gaps to provide this end-to-end solution," he said.

Health plans and providers need to be able to track and manage provider performance transparently with equal access to the performance data in real-time or near real-time, he said.

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"The combination of Apervita’s value-based payments reconciliation capabilities with Clarify’s cost, quality, and outcomes performance insights immediately delivers the leading value-based payments and clinical performance assessment solution in the industry," Hutchinson said.

San Francisco-based Clarify Health launched in 2015 and combines longitudinal data for more than 300 million “unique patient lives” from government and commercial claims, electronic health records and prescriptions. These data can help healthcare professionals manage population health and commercialize pharmaceutical and biotechnology products.

Clarify Health platform (Clarify Health)

Clarify has generated more than 18 billion AI-powered predictions that have helped healthcare organizations improve the care of over 65 million members and patients. The company has raised $178 million in venture capital funding to date.

The unified value platform will draw upon 300 million-plus payer-complete, longitudinal patient journeys to link government and commercial claims, electronic health records, prescription and social and behavioral data at the patient level.

Apervita started in 2012 as a developer of a collaboration platform for value-based healthcare. The startup focuses its efforts on helping hospitals and insurers share data and considers data security and privacy to be mission-critical to its business.

RELATED: The pandemic boosted interest in new payment models. This startup developed tools to help manage those complex contracts

Hutchinson was the founding CEO of Surescripts, a health IT company that supports electronic prescriptions. Surescripts built an infrastructure connecting pharmaceutical companies, pharmacy benefit managers, physicians' offices, hospitals and laboratories. 

Apervita works with more than 60% of hospitals in the U.S. and conducts billions of computations and insights for clients each year, according to Apervita executives.

There are two trends in the healthcare market that are driving the demand for Apervita's technology. Regulatory bodies like the Centers for Medicare & Medicaid Services and the National Committee for Quality Assurance have accelerated the transition to all digital quality measurements by 2025.

At the same time, the COVID-19 pandemic made evident the need to support providers with real-time clinical insights and best-practice guidelines. Currently, more than 3,500 hospitals use Apervita’s quality measurement solutions through a strategic partnership with the Joint Commission.