Data bat­tle

Unit­edhealth deal is lat­est move in in­dus­try shift

Modern Healthcare - - THE WEEK IN HEALTHCARE - Joseph Conn

With­out fan­fare or so much as a news re­lease, a unit of Unit­edHealth Group ac­quired Humed­ica, a Bos­ton clin­i­cal data an­a­lyt­ics firm with tight ties to the Amer­i­can Med­i­cal Group As­so­ci­a­tion.

But the deal rep­re­sents more than the in­surance gi­ant sim­ply buy­ing yet an­other health in­for­ma­tion tech­nol­ogy com­pany, some­thing it has done with reg­u­lar­ity in re­cent years. It was a ma­jor shot in the on­go­ing bat­tle by pay­ers for health­care data supremacy, ac­cord­ing to in­dus­try ex­perts.

“The fight over the con­trol of data will be a very large strug­gle,” pre­dicted Dr. David Brailer, chair­man and founder of Health Evo­lu­tion Part­ners, a San Fran­cisco-based pri­vate eq­uity firm spe­cial­iz­ing in health­care in­vest­ments, and the first head of the Of­fice of the Na­tional Co­or­di­na­tor for Health In­for­ma­tion Tech­nol­ogy at HHS.

Unit­edHealth Group, Min­netonka, Minn., is not alone among pay­ers seek­ing ac­cess to su­pe­rior clin­i­cal data gath­ered by elec­tronic health records. Health in­for­ma­tion ex­changes are an­other source of clin­i­cal data for pay­ers. In late 2010, Aetna paid about $500 mil­lion for Medic­ity, a health in­for­ma­tion ex­change soft­ware and ser­vices provider.

But Unit­edHealth has a long record with its data sub­sidiary, for­merly known as In­genix, now called Op­tum, putting it “far ahead” of the oth­ers, Brailer said. Other data-re­lated in­vest­ments by Unit­edHealth in­clude its 2010 pur­chases of Ax­olotl, an HIE soft­ware and ser­vices provider, and Pi­cis, a de­vel­oper of EHRs for hospi­tal emer­gency and other high-acu­ity de­part­ments.

“The cur­rent model of an in­surer is just a los­ing propo­si­tion with health re­form,” Brailer said, forc­ing pay­ers to hunt for new busi­ness models. Some are try­ing to morph into provider or­ga­ni­za­tions, he said. Oth­ers are try­ing to spe­cial­ize in un­der­writ­ing; oth­ers still, in health­care data an­a­lyt­ics. “Now that real money is be­ing put out, there are prepa­ra­tions be­ing made to bring this into their main busi­ness model.”

Terms of the Humed­ica deal were not dis­closed.

Humed­ica Pres­i­dent and CEO Michael Wein­traub con­firmed via e-mail that “Humed­ica is now part of Op­tum,” although the com­pa­nies’ web­sites had yet to make men­tion of it last week.

In con­trast, Op­tum an­nounced with great fan­fare last month that it formed a new sub­sidiary called Op­tum Labs, a data-an­a­lyt­ics col­lab­o­ra­tion with the Mayo Clinic, an AMGA mem­ber.

Pay­ers have long been keep­ers of claims data that ex­tends over a pa­tient’s life and across mul­ti­ple providers. But pay­ers are be­ing pushed from their places atop the health­care data heap by EHR-equipped hos­pi­tals and physi­cians. Th­ese IT-en­abled providers can use ex­changes—or cre­ate data con­sor­tia such as one the AMGA launched in 2002 called Anc­eta to ex­tend their reach.

Their EHRs pro­duce richer, more gran­u­lar and much more clin­i­cally use­ful flows of data than do billing sys­tems pump­ing out claims in­for­ma­tion to pay­ers, data ex­perts agree. As time passes, even the lon­gi­tu­di­nal su­pe­ri­or­ity of payer data will be equaled.

Humed­ica was a prize catch for Unit­edHealth in that it has long served as Anc­eta’s chief tech­nol­ogy and data an­a­lyt­ics part­ner and has devel­oped tech­nol­ogy en­abling physi­cians to in­stantly ac­cess and com­pare their EHR data across time and provider groups.

Robert Laszewski, a former in­surance ex­ec­u­tive and pres­i­dent of Health Pol­icy and Strat­egy As­so­ci­ates, a con­sult­ing firm whose clients in­clude health in­surance com­pa­nies, hos­pi­tals and physi­cian groups, noted that the com­pany has “a long-stand­ing track record of pur­chas­ing what I call an­cil­lary-type ser­vices.”

“The data in­dus­try is a prof­itable in­dus­try,” and it ap­pears United is try­ing to build that as a profit cen­ter, Laszewski said, and he de­clined to read any­thing more into it than that. In­surance com­pa­nies will be get­ting mil­lions of new cus­tomers un­der health­care re­form, he said, so they’ll do fine with the change. He scoffed at the no­tion that Unit­edHealth would be us­ing EHR data from the deal for med­i­cal un­der­writ­ing or other in­surance-re­lated pur­poses.

“There is no doubt there is a huge con­fi­den­tial­ity agree­ment there” be­tween Humed­ica and the providers, Laszewski said. “It sounds deep and dark,” he said of an in­surance com­pany buy­ing a data an­a­lyt­ics firm, but “you can’t just go into a block of data and

start min­ing it. It doesn’t work that way. “

And that’s how the AMGA lead­ers and mem­ber groups see it, too, said Dr. John Cud­de­back, the AMGA’s chief med­i­cal in­for­ma­tion of­fi­cer.

Anc­eta pools clin­i­cal data from 25 of AMGA’s 430 mem­ber groups. The pa­tient-iden­ti­fi­able data is shipped to Humed­ica, in daily trans­fers, while some, for real-time clin­i­cal sur­veil­lance, is sent ev­ery few min­utes, he said.

In a re­cent an­nual report to mem­bers, the AMGA pro­vided an ex­am­ple of the su­pe­ri­or­ity of EHR data over claims data. Among key Anc­eta de­vel­op­ments last year men­tioned in the report was the de­liv­ery by Humed­ica of a new pre­dic­tive model that could “iden­tify the pa­tients with con­ges­tive heart fail­ure who are most likely to have an ED visit or hospi­tal ad­mis­sion in the next six months.”

The Anc­eta clin­i­cal data “per­forms about twice as well as models based on claims data,” ac­cord­ing to the AMGA report. “It con­sis­tently iden­ti­fies about 4% of pa­tients who are re­spon­si­ble for 24% of ad­mis­sions and ED vis­its, and 9% of pa­tients who are re­spon­si­ble for 37% of hospi­tal uti­liza­tion.”

At Humed­ica, the data is kept seg­re­gated in each mem­ber’s own data­base, called a “fact mart,” Cud­de­back said. That way, he ex­plained, providers in one or­ga­ni­za­tion can pull up in their EHRs their own pa­tient-iden­ti­fied in­for­ma­tion and com­pare it to the ag­gre­gated and de-iden­ti­fied in­for­ma­tion of Anc­eta’s en­tire pa­tient pop­u­la­tion with­out those other mem­bers’ pa­tients’ iden­ti­ties be­ing com­pro­mised.

Anc­eta’s data use agree­ment with Humed­ica ad­heres to prin­ci­ples “that go way be­yond HIPAA,” Cud­de­back said. And the prin­ci­ples in the agree­ment “cover the data stream in per­pe­tu­ity.” It is in Humed­ica’s — and now United-Health’s—best in­ter­est to main­tain that fire­wall. “If they want to have cred­i­bil­ity, they have to re­main sep­a­rate.”

“We’ve reached out to our boards, and they have all been very pleased,” with the sale, Cud­de­back said. “We see this as very com­ple­men­tary, for what Humed­ica does with clin­i­cal data and what Op­tum does with claims data. So, I think there is op­por­tu­nity for syn­ergy.”

Dr. Ashish Jha, an as­so­ciate pro­fes­sor of health pol­icy and man­age­ment at Har­vard Univer­sity, like Brailer said in­surance com­pa­nies ap­pear to be look­ing to evolve un­der the con­straints of health­care re­form. “There will be some growth from in­sur­ing more peo­ple,” Jha said. “But com­pa­nies like United are look­ing to dif­fer­en­ti­ate them­selves and be a mar­ket leader in a whole lot of other busi­nesses.”

Jha also said in­sur­ers are aware that the in­dus­try and pol­i­cy­mak­ers will in­creas­ingly rely on so­phis­ti­cated an­a­lyt­ics made pos­si­ble by the rich streams of data yielded by in­creas­ingly preva­lent EHRs.

“We’ve been us­ing claims be­cause that’s all we had,” Jha said, “but we had the sense we could do so much bet­ter. This is the prom­ise of elec­tronic health records, and it’s start­ing to show value.”

Pay­ers are work­ing to keep up with EHRe­quipped hos­pi­tals and physi­cians by seek­ing ac­cess to data.

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