What You Should Know:

– Arbital Health, a rising star in the value-based care space, announced a significant double play today, acquiring leading actuarial firm Santa Barbara Actuaries and securing $10 million in Series A funding led by Transformation Capital.

– This strategic move positions Arbital Health as a major player in accelerating the healthcare industry’s transition to a more outcome-driven model.

Building the Infrastructure for Value-Based Care

Founded in November 2023 by healthcare veterans Travis May and Brian Overstreet, Arbital Health is building technology to facilitate outcome-based contracts, a cornerstone of value-based care. By serving as a neutral third-party adjudicator, the company ensures fair assessments of contract fulfillment, fostering trust and collaboration across the healthcare ecosystem.

Fueling Growth and Impact

Transformation Capital’s $10M investment, joined by other prominent healthcare investors, underscores the immense potential Arbital Health holds. “We believe Arbital Health has the right team, technology, and vision to revolutionize how healthcare value is measured and rewarded,” stated Scott Rosen, Partner at Transformation Capital.

Arbital’s Initial Product Offerings

Arbital Health’s initial product offerings cater to diverse needs within the healthcare ecosystem:

Value Assessment for Point Solution Vendors: Quantify the economic value of healthcare interventions and optimize ROI through predictive analytics.

Value Analysis for Payers: Understand the true value employees and members are getting from deployed point solutions.

Actuarial Advisory: Leverage SBA’s expertise for a broad range of consulting services for risk-bearing organizations.

The acquisition of SBA brings a best-in-class actuarial team and established clientele to Arbital Health. “SBA’s expertise strengthens our mission to become the go-to utility for outcome-based contracts,” declared Brian Overstreet, CEO of Arbital Health. “Together, we’ll deliver unparalleled solutions for all stakeholders in the value-based care landscape.”

What You Should Know:

– Veradigm Inc. (NASDAQ: MDRX), a leading healthcare data and technology solutions provider,  announced today the acquisition of Koha Health, a full-service revenue cycle management (RCM) company.

– This strategic move strengthens Veradigm’s position as a premier provider of RCM services in the ambulatory healthcare market. Financial details of the acquisition were not dislcosed.

Expanding Ambulatory RCM Expertise and Reach

The acquisition brings significant advantages for both companies:

Enhanced MSK Expertise: Koha’s specialized knowledge in Musculoskeletal Medicine (MSK) adds depth and breadth to Veradigm’s RCM offerings, catering to a growing and crucial healthcare sector.

Widened Service Scope: Veradigm gains the ability to serve a broader range of clients, including ambulatory healthcare provider practices and Ambulatory Surgical Centers (ASCs) utilizing diverse EHR systems.

End-to-End RCM Portfolio: Veradigm bolsters its RCM suite, providing clients with a comprehensive solution encompassing the entire revenue cycle, from claims management to reimbursement.

This move not only strengthens Veradigm’s existing client base but also unlocks new market opportunities, particularly in the MSK and diverse EHR segments. By providing clients with added value through a comprehensive and specialized RCM solution, Veradigm aims to drive growth and success for both the company and its partner healthcare providers.

“Today’s announcement represents an exciting opportunity for Veradigm to scale our revenue cycle services portfolio by leveraging additional capabilities and subject matter expertise to better serve the needs of the market,” said Tom Langan, President, and Chief Commercial Officer at Veradigm.

What You Should Know:

– Despite a 13% decline in deal volume compared to 2022, PwC’s latest Health Services Deals Outlook paints a cautiously optimistic picture for 2024.

– While a cautious optimism prevails, several factors suggest that 2024 could be a dynamic year for healthcare M&A. Adaptability, resourcefulness, and a focus on value creation will be key for dealmakers navigating the evolving landscape.

Fueling the Fire

 While headwinds like high-interest rates and regulatory concerns remain, several factors point towards a potentially vibrant M&A landscape:

– Abundant Capital: Record levels of cash on hand, coupled with investments nearing exit windows, create the potential for significant deal activity.

– Strategic Imperatives: Both corporates and private equity firms seek business reinvention and portfolio transformation, often driven by M&A.

– Creative Approaches: The emergence of non-traditional deal structures like continuation funds and co-investor partnerships shows investor adaptability

Beyond Volume

– Lower Valuation Multiples: While deal volume dipped, the decline in disclosed deal values primarily reflects larger transactions impacted by financing challenges. This presents value-seeking opportunities for investors.

– Resilient Sector: Macroeconomic indicators, including robust healthcare venture capital fundraising, point towards the sector’s continued attractiveness for investment.

Key Drivers

– Carve-outs on the Rise: Incumbents facing nontraditional competition and conglomerates streamlining operations drive this trend.

– Cross-Sector Collaboration: Nonprofit health systems seek external expertise in areas like VBC, partnering with for-profit entities for mutual benefit.

– Generative AI: The potential for disruption and productivity gains across healthcare functions is being closely monitored, but regulatory uncertainties persist.

Challenges to Navigate

– Regulatory Scrutiny: Continued oversight of specific transactions and industry concentration remain concerns, particularly for private equity.

– Reimbursement Woes: Rising labor and supply costs exceeding government-approved rate increases could lead to liquidity challenges for some providers.

What You Should Know:

– Constellation Software Inc. (TSX: CSU) announced its subsidiary N. Harris Computer Corporation (Harris) has acquired MEDHOST, Inc., a provider of electronic health record (EHR) solutions.

– This acquisition aligns with Harris’ long-term commitment to the healthcare sector. With over 200 businesses operating in diverse industries, Harris has a proven track record of successfully integrating and growing acquired companies. By adding MEDHOST to its portfolio, Harris expands its reach and strengthens its position as a leading provider of software solutions for the healthcare industry.

MEDHOST: A Leading Healthcare Player

MEDHOST, headquartered in Franklin, Tennessee, boasts a robust suite of EHR solutions designed specifically for the needs of ambulatory care providers. Its offerings include:

Physician practice management: Streamlining scheduling, billing, and other administrative tasks.

Clinical documentation and reporting: Simplifying medical record keeping and data analysis.

Patient engagement tools: Empowering patients with secure online access to their health information.

Synergy and Growth Potential

Harris, known for its expertise in acquiring and building software companies, will operate MEDHOST as a stand-alone business while leveraging its resources and best practices to drive further growth.This acquisition presents several strategic benefits:

Market Expansion: Harris gains a significant foothold in the ambulatory care EHR market, complementing its existing healthcare offerings.

Enhanced Capabilities: MEDHOST’s solutions and expertise strengthen Harris’ ability to serve healthcare providers effectively.

Shared Resources: Both companies can benefit from Harris’ proven acquisition and integration strategies, as well as its global reach and financial resources.

“MEDHOST is a highly respected company with a strong commitment to providing innovative solutions for ambulatory care providers. We are confident that this acquisition will benefit both companies and, ultimately, the patients we serve,” said Jerry Canada, Group President – Healthcare at N. Harris Computer Corporation.

What You Should Know:

– Guidehealth, an AI-powered healthcare platform announced the acquisition of an industry-acclaimed managed services organization (MSO) and Value-Based Care Services division from Arcadia, a healthcare technology leader known for its powerful data platform.

– Additionally, Guidehealth secured a technology agreement to leverage Arcadia’s advanced analytics platform, further fueling its newly acquired offering.

Acquisition Impact

This acquisition and partnership signal Guidehealth’s commitment to empowering health systems and clinical networks in navigating the complex landscape of value-based care. Their existing platform already plays a crucial role in supporting physicians, with key features like:

– Strengthening network relationships: Fostering deeper connections between physicians and affiliated networks.

– Boosting financial performance: Optimizing value-based risk contracts for improved financial returns.

– Enhancing referral growth: Facilitating growth in high-value referrals for more efficient care delivery.

– Reducing administrative burden: Streamlining workflows to free up physicians’ time for patient care.

The acquired MSO brings additional expertise in managing critical aspects of value-based care, including:

• Streamlined visit access and referrals: Ensuring patients get timely access to necessary healthcare services.
• Efficient authorization and utilization management: Simplifying prior authorization processes and managing resource utilization effectively.
• Network administration and claims payment: Providing seamless network administration and prompt claims payment, particularly in two-sided risk arrangements.

“Arcadia is proud to have built a legacy of enhancing healthcare organizations’ abilities to improve clinical and financial outcomes,” said Arcadia President and Chief Executive Officer, Michael Meucci. “Partnering with Guidehealth will allow us to continue helping our customers succeed in value-based care and population health, while also empowering us to focus on our core business of providing a leading data platform for healthcare and further invest in our products that enable more complete and transparent decision making, ultimately leading to happier and healthier days for all.”

These capabilities address a major pain point for many health system networks. Current processes are often cumbersome and inefficient, hindering timely access to care and impacting overall quality. This is precisely where Guidehealth’s solutions come in, addressing a challenge that lies at the core of their mission.

While the terms of the deal remain undisclosed, it’s clear that Guidehealth is making a strategic play to become a dominant force in the value-based care arena. Their combined offering of AI-powered platform, MSO expertise, and advanced data analytics positions them to significantly improve care delivery and financial performance for health systems and ultimately, deliver better outcomes for patients.

What You Should Know:

– mPulse, a leader in conversational AI and digital health engagement, has taken a major leap forward by acquiring both HealthTrio and Decision Point Healthcare Solutions.

This strategic move positions mPulse as a full-service platform for member engagement, analytics, and activation, solidifying its leadership in healthcare consumerism.

Strengthening Engagement and Outcomes:

The combined capabilities of mPulse, HealthTrio, and Decision Point create a powerful arsenal for healthcare organizations. This includes:

• Comprehensive health management: HealthTrio’s expertise in member engagement solutions will enhance patient and member support.
• AI-powered analytics: Decision Point’s advanced analytics platform will offer deeper insights into member needs and program effectiveness.
• Omnichannel communication: Seamless communication across various channels ensures efficient program delivery and member reach.
• Improved population health: Data-driven insights and optimized programs will ultimately lead to better health outcomes.

This strategic move positions mPulse for significant growth and impact in the healthcare industry. Combining expertise in engagement, analytics, and AI allows them to offer a comprehensive solution that addresses the ever-evolving needs of healthcare organizations and their members. With a focus on improving member experience and health outcomes, mPulse is poised to revolutionize the way healthcare is delivered and experienced.

This combination empowers healthcare organizations to better understand their members, design impactful programs, and operate them efficiently, ultimately making it easier to engage with all stakeholders,” said Bob Farrell, CEO of mPulse.

What You Should Know:

– Jefferson Health and Lehigh Valley Health Network (LVHN) have signed a non-binding letter of intent to merge into a leading integrated care delivery system.

– The combined entity, dubbed the “Jefferson Enterprise,” will boast a national research university, an expanded not-for-profit health plan, and a network of over 700 outpatient sites across eastern Pennsylvania and southern New Jersey.

Increases access to healthcare for urban and rural communities in eastern Pennsylvania and southern New Jersey

Both Jefferson and LVHN are mission-driven organizations with a shared commitment to population health management and quality-focused care. By joining forces, they aim to:

• Improve health outcomes: Expand access to high-quality, affordable healthcare services for diverse communities, particularly addressing health disparities among underserved populations.
• Strengthen clinical services: Combine their expertise in areas like oncology, neurology, orthopedics, and cardiovascular care, creating a comprehensive network of specialized services.
• Boost research and development: Leverage the combined resources of Thomas Jefferson University to enhance clinical research and academic programs, fostering innovation and attracting top talent.
• Optimize operational efficiency: Achieve cost savings and financial stability through better resource allocation and shared administrative functions.

“The health care landscape and our communities’ needs are changing; it is critical leading systems evolve and make investments in the future of care and wellness—growing and protecting access to enhanced, affordable, high-quality and innovative care, particularly for historically under-served patients,” said Joseph G. Cacchione, MD, Chief Executive Officer, Jefferson. “Combining Jefferson’s and LVHN’s resources will allow us to meet the changing needs of our diverse communities faster, more efficiently and more effectively. Together—with our combined network of resources and sites of care, managed care expertise, education and research capabilities—we will have the ability to make significant improvements to health outcomes and address health disparities in this region, and beyond, to the benefit our communities, patients, physicians, faculty, staff, students and health plan members.”

Next Steps

The definitive agreement is expected to be signed in 2024, pending regulatory approvals and closing conditions. Both Jefferson and LVHN will continue to operate independently until the merger is finalized. The leadership team for the Jefferson Enterprise will include members from both organizations, with Dr. Joseph G. Cacchione remaining CEO and Dr. Brian A. Nester serving as Executive Vice President/Chief Operating Officer and President of the legacy LVHN.

What You Should Know:

Molina Healthcare (NYSE: MOH) has revised its agreement to acquire Bright HealthCare’s California Medicare business, securing a discount of $85M on the initial purchase price. This revised deal, announced on December 13, 2023, reflects a continued commitment to the acquisition while offering Molina potential cost savings and increased value.

The acquisition expands Molina’s reach in the lucrative California Medicare market, adding roughly 250,000 members to their portfolio. It also complements Molina’s existing Medicare Advantage offerings, allowing for potential synergies and cost efficiencies.

Financial Details

• The purchase price, net of tax benefits, is now set at approximately $425M, down from the previously announced $510M.
• This represents 23% of the expected 2023 premium revenue of $1.8 billion for the acquired business.
• As previously stated, the acquisition is expected to add $1.00 per share to new store-embedded earnings and remains on track to close on or about January 1, 2024.

What You Should Know:

– CoachCare, a leading remote patient monitoring (RPM) and virtual health company, has made its fourth acquisition in 12 months, snapping up Nashville-based Verustat for an undisclosed amount.

– This strategic move further strengthens CoachCare’s position in the rapidly growing RPM market, projected to reach $175.2 billion by 2027.

Strengthening Focus on Chronic Conditions

Founded in 2020, Verustat brings valuable expertise in primary care and cardiology, areas plagued by prevalent chronic conditions like hypertension, obesity, and diabetes. CoachCare already excels in supporting patients with these conditions, and Verustat’s addition further solidifies their leadership position.

“We have gotten to know the Verustat team and their approach to remote care aligns well with CoachCare,” said Wes Haydon, President and Co-Founder of CoachCare. “We are pleased to welcome their clients and staff to CoachCare and to continue growing our best-in-class remote care platform.”

Acquisition Impact for CoachCare

The strategic acquisition positions CoachCare to deliver even greater value to both patients and healthcare providers. Patients benefit from a comprehensive remote care solution that addresses their specific needs, while providers gain access to Verustat’s expertise and CoachCare’s extensive resources. This win-win combination paves the way for improved patient outcomes, increased provider revenue, and a more efficient healthcare system overall.

What You Should Know:

– TREND Health Partners, a rapidly growing provider of AI-driven solutions, has acquired Advent Health Partners, an AI-driven platform identifies and standardizes clinical attributes from itemized bills and medical records, expediting critical information presentation and ensuring timely and appropriate reimbursement.

– This strategic combination brings together two industry powerhouses, creating a comprehensive platform for payers and providers seeking to optimize revenue and streamline operations.

Synergy through Expertise and Technology

Founded in 2010, Advent boasts CAVO®, a proprietary AI-powered platform specializing in medical record review for revenue cycle and payment integrity processes. This expertise aligns perfectly with TREND’s existing TRENDConnect platform, enabling seamless integration of clinical and non-clinical data and analytics. This holistic approach promises even greater value for clients, addressing a wider range of challenges in areas like denials management, utilization management, and DRG reviews.

Enhanced Value for Payers and Providers

The combined entity will serve over 50 health plans and nearly 1,000 hospitals, offering substantial benefits to both sides of the healthcare equation:

– Payers: Improved reimbursement accuracy, reduced administrative costs, and enhanced transparency in provider billing practices.

– Providers: Streamlined claim submission and processing, faster turnaround times, and clearer understanding of payer expectations.

AI-Powered Payment Accuracy

The TREND-Advent merger signifies a significant step forward in the evolution of healthcare payment accuracy. By leveraging AI and collaborative approaches, this combined entity is poised to transform the industry, ensuring fairer reimbursement, smoother operations, and ultimately, better care for patients.

“Rarely do you come across two companies with such complementary capabilities and aligned visions as what we found with TREND and Advent. CAVO® will help us extend our existing platform, TRENDConnect, to solve an even broader set of challenges for our payer and provider clients. We are very excited to welcome the Advent team into our organization,” said Sarah Armstrong, CEO of TREND.

What You Should Know:

– South Korean AI leader Lunit has announced its intention to acquire Volpara, a global pioneer in AI-powered cancer detection software, in a landmark deal worth AUD 292M (USD 193M).

– Beyond market presence, it’s Volpara’s deep knowledge and extensive data that truly sets it apart. With over 100 million high-quality mammogram images in its repository, Volpara offers a treasure trove of insights that will supercharge Lunit’s AI capabilities and pave the way for groundbreaking solutions in medical imaging.

Why the Acquisition Matters

• Lunit gains a strong foothold in the U.S. market: Volpara’s presence in over 2,000 medical sites across the U.S. significantly expands Lunit’s reach and impact.
• Synergy of AI expertise: Combining Lunit’s AI prowess with Volpara’s extensive database of mammogram images (over 100 million!) will fuel the development of groundbreaking diagnostic solutions.
• Leadership in cancer care: This union positions the combined entity as a leading force in AI-driven cancer diagnostics and therapeutics, benefiting both healthcare professionals and patients.

“Lunit’s acquisition of Volpara signifies a pivotal moment in our commitment to advancing global cancer diagnostics. Volpara’s AI-powered mammography solutions, operational in over 2,000 U.S. medical sites, would catapult Lunit into the forefront of the American market,” said Brandon Suh, CEO of Lunit. “What sets Volpara apart is not just its market presence but the depth of knowledge embedded in its development process. With a robust repository of over 100 million high-quality mammogram images, Volpara’s contribution would supercharge Lunit’s AI capabilities, paving the way for groundbreaking solutions in medical imaging. This alliance would position us to lead innovation in cancer diagnostics and therapeutics, benefitting healthcare professionals and patients alike.”

What You Should Know:

– AstraZeneca has announced the acquisition of Icosavax, a biopharmaceutical company developing a promising vaccine targeting both RSV and hMPV, for a total of up to $1.1 billion.

– This acquisition strengthens AstraZeneca’s respiratory pipeline and aligns with their strategy of addressing high unmet needs in infectious diseases.

Building on Expertise in RSV Prevention

Icosavax’s lead program, IVX-A12, is a Phase III-ready vaccine candidate targeting both respiratory syncytial virus (RSV) and human metapneumovirus (hMPV). These viruses are leading causes of severe respiratory infections and hospitalizations in older adults and individuals with chronic conditions.

Icosavax’s proprietary protein VLP platform technology holds promise for developing highly differentiated vaccines. VLPs are designed to mimic the structure of viruses, potentially inducing a stronger and more durable immune response compared to traditional vaccines.

Financial Details

AstraZeneca will acquire all outstanding Icosavax shares for $15.00 per share in cash, representing a 43% premium to Icosavax’s closing market price. A contingent value right of up to $5.00 per share is payable upon achieving specific milestones. The total transaction value could reach $1.1B, representing a 91% premium to Icosavax’s closing market price. The deal is expected to close in the first quarter of 2024.

“We believe this acquisition offers the opportunity to accelerate and expand access to our potential first-in-class combination vaccine for older adults at risk of RSV and hMPV. We look forward to combining our expertise with AstraZeneca’s experience and resources,” said Adam Simpson, Chief Executive Officer, Icosavax.

What You Should Know:

– Health insurer Cigna has called off its attempt to acquire rival Humana after failing to reach an agreement on price, according to sources familiar with the matter, CNBC first reports.

– The talks, which were revealed in November 2023, would have created a combined company exceeding $140B in value, but faced significant antitrust scrutiny.

– The deal’s failure comes six years after similar mega-mergers in the health insurance industry were blocked by regulators. This latest development highlights the ongoing challenges of consolidation in the sector.

Cigna’s Repurchase Plan

Cigna, however, announced plans to repurchase an additional $10B of its own shares, bringing the total repurchase program to $11.3B. This move indicates a focus on returning value to shareholders through direct investment in the company.

Cigna CEO David Cordani stated that the share repurchases reflect their belief in the company’s undervaluation and commitment to delivering high-quality care, affordability, and improved health outcomes. He also mentioned considering bolt-on acquisitions and value-enhancing divestitures to further enhance shareholder value.

Additionally, sources confirmed that Cigna is exploring the potential sale of its Medicare Advantage business, marking a potential shift in its strategy within the sector. This divestment could potentially improve the chances of a future combination with Humana by addressing potential antitrust concerns.

Neither company has officially commented on the deal talks, which were initially reported by The Wall Street Journal.

Antitrust Concerns

Analysts believe the failed merger would have provided the combined entity with greater scale to compete against larger players like UnitedHealth and CVS Health. However, the significant overlap in their Medicare businesses, particularly Humana’s dominant position, raised antitrust concerns.

Furthermore, the shadow of past antitrust challenges in the industry loomed large. In 2017, similar mega-mergers involving Anthem (Elevance Health) and Cigna, as well as Aetna and Humana, were blocked by U.S. courts due to antitrust concerns.

Healthcare economist Craig Garthwaite expects antitrust authorities to challenge any future merger attempt between Cigna and Humana. However, he believes that a sale of Cigna’s Medicare Advantage business could improve the deal’s prospects by mitigating antitrust concerns.

What You Should Know:

– ConcertAI, a developer of AI-powered healthcare solutions, announced today the acquisition of CancerLinQ, a subsidiary of the American Society of Clinical Oncology (ASCO).

– This strategic move will significantly enhance and expand CancerLinQ’s capabilities, unlocking the potential of real-world data and next-generation AI to revolutionize cancer care and accelerate clinical research.

CancerLinQ Background

CancerLinQ represents one of the largest oncology real-world data and quality of care technology services entities in the world. With access to data from nearly seven million patients across a network of over 100 cancer centers and oncology practices, CancerLinQ empowers healthcare professionals with data-driven insights to improve care delivery and research outcomes.

CancerLinQ Acquisition Benefits

Building on CancerLinQ’s existing strengths, the acquisition will:

– Expand CancerLinQ’s real-world data platform: ConcertAI will invest more than $250 million over the next few years to integrate additional data sources into the platform, providing a broader and deeper understanding of cancer patients and their care.

– Develop innovative clinical trial solutions: By leveraging ConcertAI’s Digital Access to Clinical Trial (DACT) platform, CancerLinQ will facilitate patient participation in clinical trials, making it more accessible and less burdensome.

– Enhance clinical decision support tools: The combined expertise of ConcertAI and ASCO will lead to the development of more robust clinical decision support tools within the SmartLinQ™ platform, empowering physicians to make informed treatment decisions.

– Streamline data integration: Automated EMR integration will be implemented, seamlessly incorporating SmartLinQ into existing practice workflows.

This collaboration is expected to deliver significant benefits for various stakeholders:

– Oncology practices: Enhanced SmartLinQ™ platform, improved access to clinical trials, and streamlined data integration.

– Patients: Better access to treatment options, improved care quality, and more personalized treatment plans.

– Researchers: Faster development of new drugs and therapies through access to a vast and diverse pool of real-world data.

“We believe this agreement will provide the resources to fulfill and amplify CancerLinQ’s impact,” said Dr. Clifford A. Hudis, MD, FACP, FASCO, Chief Executive Officer of ASCO. “We expect CancerLinQ to be an important avenue for practices to achieve certification under ASCO’s recently launched ASCO Certified program.”

What You Should Know:

– R1 RCM Inc. (NASDAQ: RCM), a provider of technology-driven solutions for healthcare providers, announced a significant strategic partnership involving the acquisition of Acclara and a 10-year revenue cycle management agreement with Providence, one of the nation’s largest health systems.

– The acquisition of Acclara for $675M in cash and warrants will bolster R1’s offerings and position it as the “trusted partner of choice” in comprehensive revenue cycle management. Acclara’s technology platforms and experienced team will enhance R1’s capabilities in patient access, coding, billing, and more, ultimately improving financial performance for healthcare providers.

Strategic Partnership with Providence

As part of the deal, Providence has chosen R1 as its long-term revenue cycle management partner. This 10-year agreement marks a significant cross-sell opportunity for R1, leveraging its technology and service solutions to support an innovative healthcare system.

“This partnership demonstrates the confidence of a major health system in our solutions and our ability to support their mission. We are proud to be their trusted partner and look forward to welcoming Acclara to R1,” said Lee Rivas, CEO of R1.

Financial Highlights and Growth Potential

The combined revenue and Adjusted EBITDA are expected to exceed $625M and $185M by year five of the partnership, demonstrating strong financial potential. Additionally, R1 anticipates significant cost synergies of $30M by year three and $50M by year five.