Source: CB Insights
Health IT vendors have been the dominant players in the realm of digital health acquisitions in the past few years, according to a new report by CB Insights. Although the research group acknowledges a slow down in these M&A deals for the first six months of 2016, 78 for H1 2016 compared with 165 for the 12 months of 2015, I think there’s a good chance that could pick up in the second half of the year given the consolidation trend in healthcare, particularly for practice management.
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I would have expected to see more electronic health record companies and payers on CB Insights’ chart. Athenahealth acquired two digital health startups in the first half of 2016 alone. Also, payers have been particularly aggressive investors so it seems logical that they would be interested in acquisitions, too. It may take more time for the digital health market to mature before that trend pick up though since so many payers are still assessing the effectiveness of these companies.
IMS Health topped the chart. In May, the company acquired Privacy Analytics to de-identify healthcare information and make it anonymous. The business made the purchase to support its life science customers, a little like Quintiles. It’s a little surprising that CB Insights included the ginormous deal for Quintiles in this digital health category. I think of Quintiles as a contract research organization first and digital health as just one area among many where the business is active. Maybe I’m old fashioned like that.
Last year, IMS Health acquired UK-based healthcare analytics company Dataline Software, which extracts, analyzes and visualizes real-world data.
Another deal maker on the list was HealthStream, which in June acquired Performance Management Services, a company that developed a tool to assess and identify development needs of nursing staff to improve performance. Earlier this year, Quality Systems completed its $165 million acquisition of the cloud-based practice management business for physicians HealthSolutions.
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One of the biggest deals this year has been medical device company ResMed’s $800 million acquisition of clinical software developer Brightree.
Earlier this year, Hearst Health acquired a majority stake in MedHOK, a business that help health plans comply with federal and state requirements, and manage plans members’ clinical requirements. Although Hearst Health was only formed in 2014, Hearst’s healthcare investments go back to 2004 with the acquisition of Zynx Health.
NantHealth’s initial public offering generated a lot of fanfare, even though IPOs are no longer the exit they used to be, particularly in digital health.
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