Report: Health I.T. Superstores Coming
Just as Bloomberg and Thomson Reuters evolved from financial news outlets to comprehensive national financial networks with information, analytics and trading platforms, a handful of health information networks will emerge with national scope to connect regional information exchanges and transactions processing platforms.
That's a prediction of Marlin & Associates, a New York-based financial and strategic advisory firm focused on acquisitions and divestitures of technology companies. In a new report, the consultancy contends the health I.T. market is in the early phases of a "massive" consolidation that will result in a handful of "mega firms that form Healthcare IT superstores" or health information networks.
The report authors are convinced that these health information networks--comprising administrative/financial/clinical applications with data analytics and transactions processing capabilities--will become major engines of industry transformation.
"These HINs will aggregate and analyze vast amounts of data, as well as provide tools so that their clients can execute, facilitate or intermediate a variety of transactions," according to the report. "In addition to serving payers, providers and patients, the HINs will provide data and sophisticated analytics to governmental, educational and pharmaceutical organizations. We predict that the revenue model for an HIN will most likely be in the form of a 'toll fee' for transactions, an 'access fee' for data, or subscription-based pricing."
Administrative and revenue cycle management companies will lead the consolidation, according to Marlin & Associates, which cites clearinghouse Availity's recent purchase of RealMed as "demonstrative of this trend."
Other predictions include:
* Vendors providing payment services and billing and practice management systems eventually will merge with clearinghouses.
* A new data outsourcing trend will emerge as regional HIEs contract out management of the data flowing through their networks. It isn't yet certain if the winners will be traditional outsourcing firms or HIE vendors such as Axolotl and Medicity.
* Once restrictions for purchasing health insurance across state lines are lifted, the pace of commoditization in the payer industry will accelerate, increasing pressure to reduce costs and develop creative products to differentiate insurers.
To read the M&A Report click REPORT
To read the news release click "Back to the Future: Healthcare Rebooted."