Research & News

HGP Health IT August Insights

HGP’s August Health IT Insights provides a summary of Health IT transactions, news, and public company performance during the month of August.  The wave of Health IT IPO’s during June and July were followed in August with a wave of high-profile private equity buyouts.  Clinical trial and life sciences technologies received particular attention, with significant investments in InCrowd, Forte Research, and THREAD Research.  Other transactions of note included the Walgreens’ and WCAS acquisition of Shields Health Solutions, a specialty pharmacy integrator for hospitals, The CapStreet Group’s acquisition of Surgical Notes, a leading provider of revenue cycle management software and services to ambulatory surgery centers, and Warburg Pincus’ acquisition of WebPT, an EMR provider for physical therapists, occupational therapists, and speech-language pathologists.  See the infographic below for a few of the buyout highlights from the month of August. 

The public markets saw a slight decline over the month as trade tensions and worries about the economy continued.  The healthcare industry was no exception, with our indices trending downward between 2% and 7%.

Noteworthy Transactions

Noteworthy M&A transactions during the month include:

• Navigant Consulting, a specialized, global professional services firm serving clients in the healthcare, energy, and financial services industries, was acquired by Guidehouse for approximately $1.1 billion.  This enterprise value represents approximately 1.25x revenue and 15x EBITDA.
• Accolade, a provider of healthcare advocacy solutions for employers and employees has acquired MD Insider, a provider of physician performance analytics.
• MyHealthDirect, a provider of referral management and online scheduling solutions, was acquired by Experian.
• QxMD, a provider of mobile decision point tools and mobile learning solutions for healthcare professionals, was acquired by WebMD.
• Imx Medical Management Services, an independent review and case management provider, was acquired by Leidos via subsidiary QTC Management.
• Signify Health and Remedy Partners merged to create a unified value-based payment platform for health plans, health systems, physician groups, and life science organizations
• Everyday Health acquired BabyCenter, a global digital parenting resource, from Johnson and Johnson.
• Press Ganey acquired NextPlane Solutions, a provider of technology and solutions to improve patient safety, workplace safety, experience of care, and clinical quality.

Noteworthy Investments during the month include:

• Babylon Health, a provider of telemedicine as well as a chatbot-based diagnostic aid, received $550 million, valuing the company at more than $2 billion.
• Sidecar Health raised $18 million to launch a new health plan designed to facilitate true transparency and affordable, robust coverage. Investors include GreatPoint Ventures and Morpheus Ventures.
• Two Chairs raised a $21 million series B round led by Amplo with longtime investors Goldcrest and Maveron also participating.
• Nomad Health, an online marketplace for healthcare jobs, raised $34 million. Icon Ventures led the round.
• GV led a $60 million investment in Ethos to leverage predictive analytics and big data to issue life insurance policies.

Noteworthy News Headlines

• The NHS in England is setting up a national artificial intelligence laboratory to enhance care of patients and research. The Health Secretary, Matt Hancock, said AI had "enormous power" to improve care, save lives and ensure doctors had more time to spend with patients. He has announced £250m will be spent on boosting the role of AI within the health service.

• A new scientific report found that numerous challenges will hinder AI growth in healthcare unless the industry improves. The report examines how under much of the veneer of process improvement and radical new discoveries in the field of medicine, the industry has too many entrenched systems to fully realize the advances artificial intelligence promises.

• Apple Health Records has come to a handful of Allscripts’ EHR platforms, allowing iPhone users to collate and control their personal health information across different organizations, the EHR vendor announced August 26th. The tool is housed with the iPhone’s native Health app, and requires the user’s iPhone passcode, fingerprint or face scan to access. With it, patients can view updated records consisting of their medications, test results, procedures, immunizations and other relevant medical info housed within their chart.

• Walmart the world’s biggest retailer, is moving deeper into the primary care and mental health market, opening a new clinic called Walmart Health in Georgia. At the new clinic, the company will offer hearing tests, 60-minute counseling sessions, dentistry, and vision tests.

Public Company Performance

HGP tracks stock indices for publicly traded health IT companies within four different sectors - Health IT, Payers, Healthcare Services, and Health IT & Payer Services. The chart below summarizes the performance of these sectors compared to the S&P 500 for the month of August:

The following tables include summary statistics on the four sectors tracked by HGP as well as the S&P 500 and NASDAQ for August 2019: