Health Catalyst raises $70M to target hospital revenue cycle as payment reforms loom

Health Catalyst, the fast growing data analytics vendor based in Utah, just raised another $70 million in a Series D round that puts the company at a valuation of more than $500 million, the company said today.

Health Catalyst, founded in 2008 and headed by CEO Dan Burton, said the funding will go toward “significant” product development investments, chiefly in the areas of advanced clinical workflow applications that are meant to improve clinical and financial outcomes for health systems. That will be particularly important as hospitals brace for cuts in Medicare and adapt to more value-based payment models being pushed by CMS. As much as 50 percent of all hospital payments could come in the form of value-based models by 2018.

The funding was from a veritable who’s who in investors, led by Norwest Venture Partners, along with Sequoia Capital, Kaiser Permanente Ventures, Sorenson Capital, CHV Capital, which is an Indiana University Health Company, and Partners Healthcare. Also participating in the round were new investors Sands Capital Management, Tenaya Capital, Epic Ventures, and Leavitt Equity Partners.

“As more healthcare organizations are coming to understand, data warehousing and analytics are foundational to their success under new payment and risk models,” Burton said in a statement. “This additional capital will enable Health Catalyst to develop the solutions necessary to offer every health system in the US a roadmap to systematically reduce waste and improve care delivery, across every major clinical and workflow area.”

Earlier this year, Health Catalyst made a big splash when it struck a deal with Allina Health, which will outsource its entire analytics efforts with Health Catalyst in a deal valued at nearly $110 million over 10 years.

Health Catalyst has some 1,900 clinics and hospitals, which amounts to $135 billion in client revenue.