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Hg Invests in Orion Health Rhapsody and Population Health Businesses

BOSTON, Massachusetts – 6 July 2018 – Orion Health Group Limited (NZX:OHE/ASX:OHE) announced that it has reached an agreement in relation to Orion Health’s Rhapsody and Population Health businesses with Hg, a specialist technology investor committed to helping build global businesses with funds of c.£10 billion under management.

The agreement is for entities managed by Hg to acquire majority ownership of Orion Health’s Rhapsody business and to invest in Orion Health’s Population Health business.

Healthcare technology is a core investment area for Hg, having recently completed a number of transactions across the sector. This investment will be made from Hg’s Mercury 2 Fund.

Orion Health built the first Rhapsody integration engine in the late-1990s quickly becoming one of the most recognized interoperability platforms for healthcare organizations today. The combination of Rhapsody’s global team and Hg’s resources will extend Rhapsody as a leader in the interoperability platform space, building on both Rhapsody’s world class technology and highly rated customer service.

Philippe Houssiau, an experienced global technology executive, will step in to lead the Rhapsody business. Philippe has broad experience in leading healthcare businesses, consulting and start-ups, and is formerly CEO of Agfa Healthcare, CEO of Alliance Medical and a Senior Partner with PwC.

“This investment provides Orion Health with a tremendous opportunity to deliver on our vision for customers, our people and for the healthcare sector,” said Ian McCrae, Founder and CEO, Orion Health. “The Board and I believe that Hg is the right partner to accelerate the expansion of Rhapsody and support our vision for our Population Health business.”

“Hg has been researching the theme of interoperability and population health management in healthcare IT over many years,” said David Issott, Partner, Hg. “We believe this is a key global growth theme backed by substantial market funding and resources. Rhapsody provides fantastic products and services for this market and we look forward to partnering with the team at Rhapsody to maximize its potential across the globe. We are also excited to work with Ian and the team to realize the full potential of the Population Health business.”

“Rhapsody is a high-quality business with strong underlying fundamentals and a solid pipeline of new business,” said Philippe Houssiau, CEO Rhapsody. “We believe that the current healthcare market dynamic, with increasing requirement for ‘data liquidity’, presents Rhapsody with a real opportunity for further growth and a solid base for sustained performance. With a focused leadership team and the investment provided by Hg, Rhapsody will be able to leverage its core markets whilst expanding into selected and emerging segments.”

Full details of the transaction can be found in a Market Release on the investor page of Orion Health’s website here. Summary:

–          Hg will acquire Rhapsody for NZ$205 million funded by debt and equity arranged by Hg. Orion Health will then utilize circa NZ$28 million of the transaction proceeds to acquire an ongoing 24.9% shareholding in the Rhapsody business.

–          Hg will also acquire a 24.9% stake in Population Health by investing circa NZ$20 million in that business. Orion Health will invest around NZ$12 million of the Rhapsody transaction proceeds in Population Health based on an agreed enterprise value of NZ$50 million (on a cash free and debt free basis) together with NZ$30 million of net cash to fund ongoing operations.

–          Orion Health will continue to own 100% of its Hospitals business.

–          Following completion of the Hg Transaction, Orion Health will undertake a share buyback offer at an estimated price range of $1.24-$1.29 per share, with the final offer price dependent on Orion Health’s available cash immediately following completion taking into account transaction costs and working capital adjustments in relation to the Rhapsody transaction. Shareholders will have the option to accept the share buyback offer in respect of all or a specified proportion of their Orion Health shares.

–          The bottom of the estimated buy back price range represents a premium of 46% to the closing price per Orion Health share of $0.85 on 2 July 2018 and 55% to the volume weighted average trading price over the last 20 trading days.

The injection of capital will provide investment for Orion Health to build leading global technology for the healthcare sector.

“As the healthcare sector evolves, so too has Orion Health. We believe the biggest advances in healthcare technology will come from a range of capabilities including advanced analytics and better data flow to address critical issues within the sector. In the face of growing and aging populations and the rise of chronic diseases, health systems the world over are under enormous strain. Our Population Health and Hospitals solutions are focused on helping healthcare organizations turn data into insights and clinical action and allow them to use this knowledge to optimize budgets and provide targeted patient care.

“This injection of capital will advance Orion Health’s businesses to reach their full potential over time. For our Population Health business, it will help strengthen our position as a market leader, and for our Hospitals business, it will further support its growth,” said McCrae.

The transaction is subject to a number of conditions, including regulatory approval and the share buyback offer by Orion Health’s shareholders. A notice of meeting describing the Hg Transaction and the share buyback offer will be circulated to shareholders. The independent directors have also commissioned an independent report from KordaMentha.

“This transaction is an important stepping stone in Orion Health’s efforts to build a solid and competitive business and provides our shareholders with choice in relation to their investment,” said Andrew Ferrier, Chairman of the Board, Orion Health. “We believe that providing shareholders both the option to cash-out at a substantial premium to the current trading price and the opportunity to elect to maintain an ongoing investment in Orion Health, including its 24.9% stake in Rhapsody and 75.1% stake in Population Health, is in the best interests of shareholders. This transaction has strong support from Orion Health’s Board and major shareholders.”

About Orion Health
Orion Health (NZX:OHE/ASX:OHE) is a health technology company that provides solutions which enable healthcare to over 110 million patients globally. Its open technology platform, Orion Health Amadeus, seamlessly integrates all forms of relevant data to enable population and personalized healthcare around the world. The company is committed to continual innovation to cement its position at the forefront of precision medicine. For more information visit www.orionhealth.com.

About Hg
Hg is a sector expert investor, committed to helping build ambitious businesses across the technology, services and industrial technology space, primarily in Europe. Deeply resourced sector teams focus on specific sub-sectors and investment themes to identify companies occupying an established position within a niche, and which have the potential to grow faster than their market, create employment and become the leader in their industry. Hg’s dedicated operations innovation team provides practical support to management teams to help them realise their growth ambitions. Based in London and Munich, Hg has funds under management of c. £10 billion serving some of the world’s leading institutional and private investors. For further details, please see www.hgcapital.com

July 9, 2018 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 5 blogs containing over 11,000 articles with John having written over 5500 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 18 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Survey: 8 in 10 Hospital Leaders Say Predictive Analytics is Important to Future Yet Only One-Third Use It

Lack of appropriate tools and trained personnel ranked as top barriers to adoption

SALT LAKE CITY – Sept. 7, 2016 – Nearly 80 percent of hospital executives believe the future of healthcare could be significantly improved through the use of predictive analytics, a population health management tool that can help providers stay one step ahead of costly problems like preventable readmissions, patient downturns and contracts with insurers that pay less than the cost of providing care. Yet only 31 percent of hospitals have used the technology for more than a year, and 19 percent have no plans to do so.

Those results from an August survey of 136 hospital and health system executives by Health Catalyst point to potentially significant barriers to the adoption of predictive analytics. They may also signal pent up demand for the advanced form of analytics, which has been touted as a solution to many of healthcare’s problems and as key to the development of more effective “personalized” treatments for common diseases such as cancer.

Top barrier to adoption: “Right data or tools”

Both current users and non-users of predictive analytics agree (32%) that the top barrier to its adoption is the lack of appropriate data or tools and infrastructure, according to the survey. That result is not unexpected since producing reliable predictions of future probabilities or trends requires both an accessible and trusted source of data aggregated from multiple IT systems—electronic health records (EHR), financial systems, etc.—as well as analytic applications to drive the predictions and make them easy for front-line staff to use.

Survey respondents said the next most significant barriers to the use of predictive analytics were a lack of people or skills (26%) and a lack of executive support or budget (20%). Few seem to question the effectiveness of the technology; only one respondent said past efforts had failed to show results. And despite the relative youth of predictive analytics technology, confidence in its accuracy ranged from neutral to very strong among respondents. Only 2 percent said the technology produces inaccurate results.

Pent up demand?

Apparently driven by faith in predictive analytics’ ability to deliver meaningful results, demand for the technology appears to be strong among hospital leaders. In addition to the 31 percent of respondents who already use it, 38 percent said they plan to adopt predictive analytics within the next three years. Fourteen percent of that group said they will adopt it in the next 12 months.

Still, nearly one-third of the survey takers are on the fence. In addition to the 19 percent who said they have no plans to use predictive analytics, another 11 percent are unsure whether they will use it in the future or not.

Even among those who plan to adopt predictive analytics, few said they have the budget to allocate significant resources to the effort. Most (37%) are tip-toeing into the space with commitments or planned commitments of 1-3 people devoted to the task of leveraging analytics for predictions. Only 8 percent said they would allocate more than four people to that role.  Thirty-four percent of respondents said they were unsure how many people they would have work in the area.

Preventive care tops list of uses

Both current users of predictive analytics and prospective users agreed (58%) the top priority for its use is to alert caregivers to interventions that may prevent health declines among high-risk patients, according to the survey. Asked to name the top three priorities for the use of the technology, respondents assigned the second and third spots to predicting financial outcomes (such as patient cost or likelihood of patients to pay their bills) (52%), and improving the ability of providers to negotiate contracts with insurers (42%).

Other priorities for predictive analytics identified by survey takers were projecting patient health outcomes and satisfaction (38%) and improving the quality of diagnoses (33%). Falling last on the list of priorities was the forecasting of staffing and supply chain needs (27%).

EHR tops list of preferred data sources

When asked to list the top three sources of data for making predictions, respondents most often selected clinical data from the EHR (80%).  Tied for second as important data sources were claims data and patient outcomes data, both selected by 53 percent of respondents. Financial data was the next most selected category (50%), followed by non-medical patient demographics (22%) and patient satisfaction data (21%).

“Overall, the survey findings point to a growing need within the provider community for solutions that help to identify long-term rising-risk patients who are on their way to becoming high-cost consumers of heath care,” said Levi Thatcher, Director of Data Science at Health Catalyst. “With an ever greater light being cast on system-wide inefficiencies, providers are hungry for analytics that will help them identify and treat these patients before their health deteriorates, both improving their lives and reducing needless spending across the system.”

Methods

Survey results reflect the opinions of 136 healthcare professionals who responded to an online survey in August 2016. Respondents included 34 CEOs; 18 chief financial officers; 26 chief information and chief medical information officers; and a variety of other executive and departmental leadership roles. They work for organizations ranging from some of the nation’s largest urban academic medical centers and integrated delivery networks to small, rural critical access facilities.

About Health Catalyst

Health Catalyst is a mission-driven data warehousing, analytics and outcomes-improvement company that helps healthcare organizations of all sizes perform the clinical, financial, and operational reporting and analysis needed for population health and accountable care. Our proven enterprise data warehouse (EDW) and analytics platform helps improve quality, add efficiency and lower costs in support of more than 70 million patients for organizations ranging from the largest US health system to forward-thinking physician practices. For more information, visit https://www.healthcatalyst.com, and follow us on Twitter, LinkedIn and Facebook.       

September 7, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 5 blogs containing over 11,000 articles with John having written over 5500 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 18 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

Survey: Hospitals Progressing Slowly toward Medicare’s Goal of 50 Percent Value-Based Reimbursement by 2018

Respondents cite analytics as most important success factor for value-based reimbursement

SALT LAKE CITY – MAY 9, 2016 – Fewer than a quarter of U.S. hospitals are on track to hit the Obama Administration’s 2018 goal of providing at least half their patient care through so-called “value-based” arrangements – structures that tie reimbursement from Medicare to the quality of care patients receive.

That is one finding of a new online survey of healthcare executives representing 190 U.S. hospitals with a total of more than 20,000 licensed beds. The survey by Health Catalyst revealed that just 3 percent of health systems today meet the target set by the Centers for Medicare and Medicaid Services (CMS). Only 23 percent expect to meet it by 2019, a year after CMS had hoped that half of all Medicare reimbursements would be value-based.

According to the survey, the majority of health systems—a full 62 percent—have either zero or less than 10 percent of their care tied to the type of risk-based contracts identified by CMS as “value-based,” including Medicare accountable care organizations (ACOs) and bundled payments. Not surprisingly, small hospitals with fewer than 200 beds comprised the majority of those reporting no at-risk contracts. A contributing factor may be that smaller hospitals are five times less likely than larger organizations to have access to sufficient capital to make risk-based contracting work, according to the survey.

Despite lagging behind the federal government’s goal, healthcare executives across the board intend to steadily increase value-based care and at-risk contracts. In the next three years, all but 1 percent of respondents expect their organizations to be engaged in at-risk contracts. Sixty-eight percent said they expect risk-based contracts to account for less than half their total care in that time frame. Only 23 percent expect value-based care to account for more than half of their care in the next three years. Eight percent of respondents said they could not predict the answer.

Analytics tops the list of must-haves

The most important organizational element needed for success with risk-based contracting is analytics, said responding executives at both small and large hospitals. In fact, 52 percent of respondents cited the prime importance of analytics, more than double the second most-selected answer: a culture of quality improvement. Twenty-four percent of respondents cited cultural alignment on quality as having the most impact on value-based care success.

“Transitioning from fee-for-service reimbursement to value-based payments is a goal that many healthcare organizations embrace but are having difficulty implementing as they juggle a number of other high priorities,” said Bobbi Brown, Health Catalyst vice president of financial engagement. “This survey reveals that they’re making progress but they could use a little help – some of it financial and some of it technical in the way of better analytics to help identify at-risk populations and better manage their risk. The bottom line seems to be that while progress is slow, healthcare leaders are committed to making value-based care work.”

Survey results reflect the opinions of 78 healthcare professionals who responded to an online survey by Health Catalyst in May 2016. Over half of the respondents (51 percent) were CEOs or CFOs of large hospital-owned physician groups and hospitals ranging in size from 15 acute care beds to over 1,000 beds. The remaining respondents all held executive roles, including several Chief Medical Information Officers, Chief Medical Officers and Chief Nursing Officers.

The organizations represented include many well-known multi-hospital and multi-state health systems with a cumulative 756 inpatient and outpatient facilities and 20,416 acute care beds.

About Health Catalyst

Health Catalyst is a mission-driven data warehousing, analytics and outcomes-improvement company that helps healthcare organizations of all sizes perform the clinical, financial, and operational reporting and analysis needed for population health and accountable care. Our proven enterprise data warehouse (EDW) and analytics platform helps improve quality, add efficiency and lower costs in support of more than 70 million patients for organizations ranging from the largest US health system to forward-thinking physician practices. For more information, visit https://www.healthcatalyst.com, and follow us on Twitter, LinkedIn andFacebook.  

June 9, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 5 blogs containing over 11,000 articles with John having written over 5500 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 18 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.