MPG Life Sciences Software Market Update - H1 2019
HIM Industry Trends Driving M&A 2012
1. Healthcare Information & Media
(“HIM”)
Industry Overview & Trends Driving HIM M&A
August 2012
“[Patients] seek health information from media companies more than from government,
healthcare companies, and consumer companies combined.” - PwC, 2012
2. Healthcare Information & Media (“HIM”) Universe Defined
Professional
HCIT Consulting Services
DTP Advertising Old CME New CME
Clinical Collaboration
Prescribing Data Data Analytics
Physician Reference Directories Research Data
Practice Management
Management
Spectrum
Professional Journals Smart Monitors
Digital Disease Lead-generation Electronic Medical Records
Management Remote Monitoring
Content Information & Media Spectrum Distribution
Healthcare
Doctor Reviews
Personal Health Magazines Tele-health/V-consults Appointment Scheduling
Patient Education Electronic Health Records
Waiting Room Media
DTC Advertising
Digital Health Management
HC Social Networks
Provider Collaboration
Diagnostic Games/Awards UGC Publishing
Consumer
2
3. Healthcare Spending Will Continue to Accelerate
Growth in healthcare spending is primarily being driven in the hospital care, physician & clinician
services and the prescription drugs segments
US National Healthcare Expenditures (In Trillions)
$5
$4
$3
$2
$1
$0
2006 2008 2010 2012 2014 2016 2018 2020
Hospital Care Physician and Clinical Services Prescription Drugs Other Health Services
Retirement/Nursing/Home HC Net Cost of Private Health Ins Gov Health Activities and Admin Structures & Equipment
Dental Services Durable/Non-Dur Med Equip Research
Source: U.S. Department of Health & Human Services
3
4. Key Trends Driving M&A
in the HIM Economy
1. Clinical Intelligence Is Driving Information Materiality
2. Marketers Roles Are Being Redefined By Outcomes Focus
3. Accountable Care Legislation Stimulating Pay-For-Performance
4. Legislation Driving EMR Adoption And Workflow Integration
5. Capital Overhang Fostering Healthcare Business Model Evolution
4
5. Clinical Intelligence is Driving Information Materiality
Drivers Selected Clinical Intelligence Deals
Data driven customization is dividing
customers into revealing micro-segments Buyer Target Target Description Price Year
Data liquidity arises from the emergence of OptumHealth Connextions
CRM and analytics driven
$325 2011
consumer insight company
intelligence across a continuum of care
Liquidity & customization has lead to PerkinElmer ArtusLabs Cloud computing infrastructure $15 2011
predictive intelligence
• data + analytics = information Cambridge Knowledge management in a lab
PerkinElmer $205 2011
Soft setting (SaaS)
GOAL: Audience Ownership
Clinical trial software (planning to
Oracle ClearTrial 2012
payment, SaaS)
PerkinElmer Labtronics Electronic lab notebook (SaaS) 2011
Aetna Medicity Health information exchange $500 2011
Consumer focused digital HC
Aetna Payflex $202 2011
expense management
Predictive intelligence has created a new level of data
materiality as Healthcare companies compete for the
opportunity to message and affect behavior
5
6. Marketers Roles are being Redefined by Outcomes Focus
Drivers Selected HC Information Deals
Changing Pharma landscape is forcing a
Buyer Target Target Description Price Year
reassessment of multi-channel marketing mix
• 17 Brands ($34B in retail sales) will lose patents Priority
Dowden Multichannel marketing targeting
over the next 2 years Health Media
Integrated
Payers and Providers
2011
Marketing
Predictive Intelligence has created opportunity
to message and affect behavior Menlo
Lumos Labs
Subscription based neuroscience
$33 2011
Ventures games/exercises for consumers
• Patient education
• Adherence
Remedy Intelecare Mobile medical adherence,
• Lead Generation Health Media Compliance prescription compliance
2011
Fogg Behavior Model
Mobile & online symptom tracking
Medivo WellApps applications for patients with 2012
chronic illnesses
Vista Equity Essential Interactive e-learning solutions
2012
Partners Learning for behavioral health issues
SDI Health's
InVentiv Promo & Analytical physicians surveys
2012
Health Audit for Pharma
Business
Sharecare Real Age Online health measurement tool 2012
Source: www.behaviormodel.org. 6
7. Accountable Care Legislation Stimulating Pay-for-Performance
Drivers Selected ACA Driven Deals
Buyer Target Target Description Price Year
Provides focused, data
Harris Carefx
aggregator that partners with $155 2011
Corporation Corporation
existing EMR
Health Data Payment integrity
HMS Holdings $400 2011
Sights services to Payers
Verisk Bloodhound Payer-focused hosted claims
$82 2011
Analytics Technologies editing and analytics
Provides proprietary systems
Verisk MediConnect and services that facilitate the
$349 2012
Analytics Global aggregation and analysis of
Pay for Performance medical records
Eligibility verification,
Medical
Experian credit scoring services, $185 2011
Present Value
and claims software
Enables Payers to design,
Implications: McKesson Portico
build, service and deliver
$90 2011
value-based reimbursement
Soaring demand for and valuations of: to Providers
• comparative data companies Compliance
Payer/Provider cloud-based
SAI Global regulatory compliance and risk 2012
• digital practice management companies 360
management SaaS
• integrity service companies General
HIE, EMR, data analytics,
Vangent business-process $960 2011
Focus on Patient outcomes is driving Payer Dynamics
outsourcing
and Provider information needs to converge
7
8. Legislation Driving EMR Adoption & Workflow Integration
Drivers Selected Practice Management Deals
Meaningful Use legislation has driven
Buyer Target Target Description Price Year
growth the EMR industry
The tipping point of the materiality of Cerner
Resource
Systems
Electronic, point-of-care
documentation services for LTCs
2011
information has been reached NCR
Distributor of kiosks &
Quadramed Healthcare 2012
• Driving consolidation in EMR and across Solutions
tablets for registration
the entire continuum of care
Automatic
ADP EHR and practice
Data $205 2011
AdvancedMD management SaaS
Processing
HIM M&A 2011
$4,000.0 $3,970.0 Transcription & clinical
61 Nuance Transcend $321 2012
60 documentation services
$3,500.0
$3,000.0 50
Workflow and communications
McKesson peerVue 2012
solutions
$2,500.0 40
$2,000.0 $1,919.0 International EMR & revenue
30 CSC iSOFT $188 2011
cycle management
$1,500.0
19
20
$1,000.0 16 Real-time healthcare
Lumeris NaviNet 2012
10 communications network
$500.0 5
1 2 $213.0
$0.0 Und* Und* Und* 0 Passport STAT
Health Personal Mobile Health Telemedicine Revenue Service Enterprise scheduling 2012
Information Health Cycle Providers Health Tech’s
Management Record Management
US$ in Million 2011 Total No. of Deals
8
9. Capital Overhang Fostering Healthcare Business Model Evolution
Drivers Selected Private Equity Deals
Competition is heating up: private equity
players, flush with cash, are chasing Buyer Target Description Price Year
digital/SaaS InVentiv Ingenix, i3
• Typically favor platform/bolt-on strategies with (TH Lee) CRO
Clinical development business $400 2011
operating leverage
Kforce Outsourcing solutions to
• $100 billion of which is nearing the end of its InVentiv
Clinical pharmaceutical, biotech and $50 2012
(TH Lee)
investment horizon Research medical device companies
• Low % of digital revenue can make a 2-3x The
Avatar Patient satisfaction and
Riverside 2011
multiple impact on price Internat’l Physician engagement surveys
Company
Capital Overhang of US PE Investors by Vintage Year Management consulting firm
Avatar HR Solutions
specializing in employee and 2011
(Riverside) Internat’l
physician engagement
T-System Practice
(Francisco Management Medical billing 2012
Partners) Associates
T-System Clinical
Medical charge management and
(Francisco Coding 2012
auditing services
Partners) Solutions
API
Healthcare Cloud-based SaaS for HC staffing
Concerro 2012
(Francisco & scheduling systems
Partners)
Gateway EDI SaaS that helps medical practices
NHXS 2012
(Apax) manage physician reimbursement
9
10. Digital Health Ecosystems ARMS RACE
Medicare Commercial Generics Med
Devices
Employers Large
Medicaid Biotech
Pharma
PBMs Payers AROs Pharma CROS
Patients Policy
Pharmacies ACOs $$$
Regulators
Hospitals
Providers Politics Organized
Politicians Groups
Medical
Associations Professionals
11. Pharma Ecosystem Case Study
THLee’s Strategic Vision. Create an organization that relieves the pain points of Pharma.
Corporate Timeline:
Paul Meister appointed CEO, inVentiv acquires i3 clinical
inVentiv Health taken Acquires Kforce
founder/CEO of Liberty Lane development businesses of
private after acquisition by Clinical Research
Partners, former Chairman of Ingenix from OptumInsight for
Thomas H. Lee Partners for $50M
Fisher Scientific International $140M
Sept 2010 Jan 2011 May 2011 Today
May 2010 Jan 2011 Jan 2011 Mar 2012
Joe Massaro appointed CFO, previously inVentiv acquires the Campbell inVentiv acquires Value
worked as MD at Liberty Lane Partners, Alliance Group, a healthcare related PharmaNet Development estimated
former SVP of Global Business Services management consulting firm, for Group, a clinical at ~$2B
at Fisher Scientific International $400M development services
company, for $600M
Clinical Business (50% of rev) Consulting Business Commercial Business
Providing people, tools, and
Clinical trial staffing
technology to support the
Comprehensive Pharma
Drug development service successful commercialization of
management consultancy
provider pharmaceuticals, biologics, and
medical device or diagnostic
Pharmaceutical, life science products
and device staffing
Kforce Clinical Research
Source: inVentiv Health Strategy Team
11
12. Pharma Ecosystem Case Study
Commercial Business holdings detail:
Full-service brand identity consultancy Ad agency focused in oncology/immunology
Education and communications for advocacy Full-service communications/events
Clinical trial staffing solution Patient educational information
Global PR and marketing Analyzes claims data to reduce costs
Full service healthcare ad agency Patient medication use and risk management
Digital healthcare ad agency Patient access and reimbursement services
Multifaceted creative services company Customized sales solutions
Brand perception company Sales team recruitment
Canadian full service healthcare ad agency Specialized medical education
Provider of live/on-demand event services Digital ad agency selling accelerator
Ad agency known for creating experiences Non-personal healthcare marketing
Patient relationship marketing programs Pharmaceutical service and support
12
13. Provider Ecosystem Case Study
athenahealth’s Strategic Vision: Driving value to doctors through the last mile.
By combining the information collected across a multitude of providers with athenaRules and then
leveraging the analytics provided by Anodyne, athenahealth has created a platform for comparing
payer performance and utilizing predictive analytics
Corporate timeline:
Co-founders
Todd Park and
Jonathan Bush Acquired Anodyne
purchased a Health Partners for $30M
small practice Expanded the from VC’s, later used to Acquired MDX
and incorporated IPO’d on build out analytics Medical/Vitals
technology with
as athenahealth NASDAQ business for $3M
athenaClinicals
2000 Aug 2007 Aug 2008 Jul 2011 Today
1997 2006 Sept 2007 Oct 2009 Sept 2011
Developed Company Acquired Crest Line Acquired Proxsys for Company
athenaCollector: valued at $76M Technologies for $7.7M, $36M, later re-brands as has ~$2.8B
a billing and later re-branded as athenaCoordinator market cap
practice mgmt athenaCommunicator in
tool 2010
Source: athenahealth Strategy Team
13
14. Provider Ecosystem Case Study: athenaNet – “The Hedgehog”
athenaClinicals
athenaCollector • Electronic medical records
• Physician billing and integrating Provider and Payer
practice management intelligence
athenaService
athenaRules • Over 1,000 people who
• Patented billing Rules Engine “Driving Value interact with clients at all
enables client performance of the key steps in the
benchmarked across athenaNet to Doctors
revenue cycle
through the
last 10 feet”
- Jonathan
Bush
athenaCoordinator athenaCommunicator
• Order transmission and • Order Transmission
patient registration insurance pre-certification
and patient registration
Anodyne Analytics
• Data visualization tools and
insight into client’s practice
performance
14
15. Payer Ecosystem Case Study
UnitedHealthcare’s Strategic Vision. Create a Patient & Primary Care Provider-centric experience
that utilizes information to transition from a fee for service to pay-for-performance environment by:
Optimizing care quality
• focus on the holistic health of the consumer: prevention, wellness and disease management
Reducing costs
• integrate information systems across care providers and pay-for-performance payment structures
Corporate timeline:
United rebrands itself OptumHealth acquires OptumHealth acquires
to match its market state and federal care business process and
facing businesses, service, Logistics technology outsourcing
thereby creating the Health Inc from company, Connextions, Optum introduces the
Optum segments Gundersen Lutheran from New Mountain for Health Cloud Platform
$325M
Mar 2011 Jun 2011 Sept 2011
May 2011 Aug 2011 Today
Q1 2011
OptumHealth acquires OptumInsight sells it’s OptumInsight acquires toxicology
care mgmt company, i3 clinical development and clinical research consultancy,
INSPIRIS, from a business to inVentiv GlobalTox, from MTE Consultants
consortium of VC’s at Health for $140M for an undisclosed amount
an undisclosed amount
Source: UnitedHealthcare Strategy Team
15
16. Payer Ecosystem Case Study
OptumHealth OptumInsight OptumRx
• Care Solutions • Provider solutions including financial performance improvement, • PBM services
compliance, clinical workflow and accountable care solutions • Mail order and specialty
• Behavior Solutions
fulfillment
• Payer solutions including network performance, clinical quality,
• Financial Services • Claims processing and
operational efficiency/payment integrity and risk optimization
• Collaborative Care retail network/rebate
• Government solutions including program integrity, health contracting
• Logistics Health
management/population analytics and data warehousing/
business intelligence
• Life Science solutions including market access/optimization,
strategic regulatory services, risk management and patient
insights
16
17. Payer Ecosystem Case Study: Health Cloud
Dashboards & Hosting
HIPAA compliant tools:
Optum Care Suite
Healthcare Scheduling Exchange
Optum Care Pathways: Establish care plan
across Provider continuum; access to EMRs
Healthcare Scheduling Exchange (HSE): Optum Care Coordination: Track &
Provider referral & secure Patient messages document care w/ multiple Providers
Optum Care Population: Condition specific Optum Care Quality: Aggregate & analyze outcomes from
Patient registry analyzed for health intelligence Payer claims, Provider records, and Patient reports
Foundation for an Accountable Care Organization
Patient Centric, Outcome Focused
17
18. Payer/ACO Ecosystem Case Study
Aetna’s Strategic Vision: Create a Health 2.0 Accountable Care Organization using data and
mobility solutions.
• Stay Current: adapt healthcare management options to the changing habits of society.
• Remain Flexible: Maintain a wide array of options for all sorts of clients.
Corporate Timeline:
Acquires health care
analytics company Acquires 3rd party Acquires Healthagen,
ActiveHealth Enters into a strategic administrator Prodigy developer of iTriage,
Management for partnership with leading Health for approximately top rated mobile
$400 million. pharmacy CVS Caremark. $600 million. health app.
Nov. 2010 Jan. 2011 Jul. 2011 Today
May 2005 Jan. 2011 Jun. 2011 Dec. 2011
Acquires Health Acquires health plan Aetna’s market
Joeseph Zubretsky and Meg
Information Exchange administrator Payflex cap is ~$14.2B
McCarthy are appointed
company Medicity for for approximately
Executive VP’s; Mark
approximately $490 $202 million.
Bertolina becomes CEO.
million.
Source: Aetna Strategy Team, SEC filings
18
19. Payer/ACO Ecosystem Case Study: Convergence
Industry observers are seeing a path to convergence of Payers and Providers
19
20. For More Information
Lora Lindsey Over the course of her career, Lora has been
involved in the execution of over 44 deals
Healthcare Information & Media including: 12 M&A transactions, 16 equity
financings, 10 debt financings and 6 other advisory
assignments:
Passionate about connecting People and Ideas • Vice President, Media IB, Bear Stearns
in Health Information & Media (HIM)™ • Associate, Healthcare IB, Goldman Sachs
• Analyst, Lev. Finance & Media Lending, BofA
• Volunteer, US Peace Corps
Asset classes underwritten include:
• Debt: leveraged loans (middle market),
syndicated loans, sub-investment grade bonds,
Email nyclindsey@gmail.com distressed workouts (chapters 11 & 7), converts
Mobile 646.734.8375 • Equity: public equity (large, small, and nano
Skype Lora.Lindsey1 cap), PIPES, private placements, alternative
Twitter @HIMBanker investments (venture and private equity)
LinkedIn www.linkedin.com/pub/lora-lindsey/0/185/225
Pinterest www.pinterest.com/HIMBanker Securities Industry Registration: Series 79
Crunchbase www.crunchbase.com/ BBA, University of Washington
MBA, Columbia Business School