Health IT, Patient Engagement, Startups

WebMD’s Avado acquisition bridges its engagement gap between docs and patients

Patient engagement tools have just taken on a new importance for health IT investors, thanks to […]

Patient engagement tools have just taken on a new importance for health IT investors, thanks to the WebMD’s (Nasdaq: WBMD) acquisition of health IT company Avado. It’s a significant shift for the company which has, until recently, focused on healthcare content only.

Avado’s patient portal is designed to be EMR agnostic. It uses messaging, reminders, and appointment scheduling to help patients and physicians interact.

The deal fits into WebMD’s strategy to bridge a gap between its healthcare content for physicians and patients. In a conference call for WebMD’s third quarter earnings, the company said the deal is “a key building block” for its patient engagement platform. The acquisition will help it arm healthcare providers with patient engagement tools they can use to address the increased liability they face for patient outcomes under Obamacare.

In addition to its healthcare information channel, WebMD owns Medscape and cardiology news channel theheart.org. Another arm of its business allows members of employer and wellness plans to gain access to health management information and get personalized risk assessments, among other information.

Health IT startup Avado was founded in 2010 by serial entrepreneurs David Chase, Bassam Saliba and John Yii.  The company, which is part of StartUp Health Academy, took part in the New York Digital Health Accelerator. It received $300,000 from that program and raised additional funds from AngelList and angel investors such as Andy Palmer and Dr. Daniel Schwartz. The Partnership Fund is also an investor.

Chase and Saliba will join WebMD and report to Bill Pence, the COO and CTO, according to the company statement. The deal has been about one year in the making.

In response to emailed questions Chase said:

“Our entire product/platform will stay and be integrated with WebMD. Naturally, we’ll prioritize some areas first as we roll it out after we get done with integration.”

He added that he’ll continue to be focused on the business side, particularly building out the partner ecosystem to create new opportunities for various partners.

Earlier this year WebMD launched a cold and flu map, taking a page from Centers for Disease Control’s initiative. It also has developed a connectivity platform to help physicians using Medscape mobile app securely send health education and instructions on thousands of medical conditions, procedures and drugs to patients who use WebMD’s mobile app.

Mercom Capital Group, which covers health IT deal activity, has been so bullish about health IT deals and projects that healthcare IT funding is on pace to be double what it was last year, according to CEO Raj Prabhu.

Although WebMD’s move illustrates the value of some patient engagement tools, it also underscores the reality that health IT companies that can’t demonstrate that they offer anything new will be eclipsed by consolidation.

[Photo from flickr user s_falkow]

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