Health Catalyst plans to acquire health IT company Healthfinch for $40 million in cash and shares.
Madison, Wisconsin-based Healthfinch provides clinical workflow optimization technology for physicians, including "Charlie," the company's practice automation platform that handles routine, repeatable and non-reimbursable "busywork" that burdens physicians.
The Healthfinch acquisition will allow Health Catalyst’s customers to enhance clinical workflows in electronic health record systems, Health Catalyst officials said in a press release.
The deal also strengthens the company's population health portfolio. Health Catalyst's population health capabilities were bolstered by its acquisition of Able Health in February for $27 million and the launch of its care management solution earlier this month.
Health Catalyst expects to fund the deal using a mix of stock and cash. The deal is expected to close in the third quarter of 2020.
In a filing with the U.S. Securities and Exchange Commission (SEC), Health Catalyst reported the purchase price of approximately $40 million, plus a potential earn-out. As part of the deal, Health Catalyst has agreed to issue 796,380 shares of Health Catalyst’s common stock to the stockholders of Healthfinch, according to the SEC filing.
Salt Lake City-based Health Catalyst, which went public a year ago, reported $154.9 million in revenue in 2019, up 38% compared to 2018 revenue of $112.5 million.
Healthfinch's "Charlie" application combines EHR-integrated technology and protocol content to streamline key workflows such as prescription renewal processing, visit planning, and care gap closure. With Charlie, health systems can deliver a better, safer patient experience, while also achieving lower rates of provider and staff burnout, increased care gap closure, improved quality metrics, and significant time and cost savings for providers and clinical staff, according to the company.
Healthfinch was founded in 2011 by Lyle Berkowitz, M.D., and Jonathan Baran and has raised $18 million to date, according to Crunchbase.
The company's technology is used by more than 5,000 providers and has served 1.7 million patients, Healthfinch reported in a January 2019 blog post.
Healthfinch's software has improved provider efficiency and patient safety—the technology has helped health providers save 44 million minutes, caught over 315,000 medication errors and identified more than 1 million care gaps, according to the company.
Health Catalyst plans to add Healthfinch to its analytics application portfolio as a new application suite category called EMR Embedded Insights. HealthFinch's refills, care gaps closure and visit planning applications will continue to be available in their original configurations, the company said.
Additionally, the Healthfinch technology will be used to augment workflows across Health Catalyst’s product portfolio, with data and insights powered by Health Catalyst’s cloud-based data operating system, a healthcare-specific data platform that provides customers with a single comprehensive environment to integrate and organize data.
Health Catalyst CEO Dan Burton said the addition of Healthfinch's technology and team will accelerate the company's mission to be the "catalyst for massive, measurable, data-informed healthcare improvement.”
This acquisition highlights Health Catalyst’s ability to integrate and scale software applications on top of our DOS platform. "The Healthfinch technology will easily serve up actionable insights, derived from DOS and other Health Catalyst analytics applications into the EMR, at the point of care," Burton said in a statement.
Healthfinch’s capabilities are already in demand from Health Catalyst customers across multiple areas including quality measures, care management, population health, and patient safety.
"Providing these capabilities will bring even greater value to Health Catalyst customers by making the critical insights and analytics from the DOS platform actionable within clinical workflows—providing more effective care for patients and saving time for both doctors and staff through automation so they can work at the top of their license," Health Catalyst executives said in a press release.
RELATED: Health Catalyst reports 2019 revenue up 38%, Q4 earnings beat Wall Street estimates
Berkowitz, Healthfinch's co-founder, chairman and chief medical officer, said the company was launched 10 years ago with the aim of building tools on EMR platforms that would simultaneously make life easier for doctors and better for patients.
"I’m proud to say we have fulfilled that vision as our products currently save immense amounts of physician time monthly, while also improving patient quality via closing gaps in care, minimizing refill errors and speeding up prescription refill turn-around time," Berkowitz said.
"Fifteen years ago at Northwestern University Feinberg School of Medicine, Lyle and I formed a lasting friendship and a shared passion around making life better for clinicians and patients by using health IT to improve the value and efficiency of EMRs," said Dale Sanders, Health Catalyst's chief technology officer. "Fast forward to today and it has all come full circle. EMRs are everywhere, making decision support much easier to implement. The combined strengths of Healthfinch and Health Catalyst will fulfill the vision we share of improving both quality of care for patients and quality of life for physicians."