Healthcare has a surplus of data and a scarcity of actionable insights derived from that data, according to Advata CEO Julie Rezek. Her company is seeking to close that gap and reduce operational inefficiencies in healthcare by selling insights-based software to payers and providers.
Launched two weeks ago, Advata is a data analytics spin-off from Providence, a health system in Renton, Washington. The startup was formed from the integration of six software companies housed within by Tegria, which is Providence’s portfolio of health technology firms as well as its consulting services solution.
Advata, which has 150 employees, sells a suite of insights-focused data software products designed to improve population health and revenue cycle management. The fact that Advata’s origin can be traced back to Tegria is one reason it’s CEO claims that it is not your average startup.
In 2020, Providence launched Tegria to invest in, acquire and scale health technology startups. When selecting startups, Tegria looks for companies that use data analytics and insights to tackle issues in clinical operations or the revenue cycle process, said Wasif Rasheed, Tegria’s chair and Providence’s chief revenue and growth officer.
By fall of last year, Tegria owned a dozen health technology companies. Rasheed said his team thought it made sense to develop a separate operating company that focused solely on software. With that, Advata was formed on June 8.
Now, Tegria functions as a holding company, while Advata is a standalone operating subsidiary. Rasheed pointed out that the company enters the market with a head start because it inherits the six legacy companies’ existing customer and revenue bases.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
“We’re not a traditional startup,” Rezek said. “We’re not starting at Ground Zero — we’ve got 30 customers.”
The connective tissue among the six legacy companies that now comprise Advata is that their software uses data and advanced analytics to produce insights aimed at reducing inefficiencies, such excessive emergency department readmissions, payers’ failure to notice members’ telltale signs of chronic illness, and health systems’ struggles to get bills paid in a timely manner.
Advata starts by combining a provider’s EMR and other relevant data into one common data model. The company’s revenue cycle products use this data to help providers’ accounts receivable teams identify which bills are most likely to be paid. The teams use this tool to increase revenue and efficiency by going after those bills first. About 75% of Advata’s customers buy solutions on the revenue cycle side of things, according to Rezek. When a provider adopts this software, she said it is easy to track its impact by looking at metrics such as the reduction in the amount of time it takes the health system to get patients to pay their bills.
On Advata’s population health side, the company offers to help payers flag patients’ problem areas so caregivers can intervene before they develop an acute condition, such as pneumonia or a heart attack. It also offers population health software that predicts which patients are likely to land in the emergency department and points to a list of actions their care team should take, such as a prescribing a new medication or implementing a nutritional plan. SCAN Health Plan is among one of Advata’s population health customers.
Rezek acknowledged that there are plenty of other companies selling AI-based software, such as Viz.ai and Qventus, but none of them entered the market with as deep of an understanding of healthcare’s bottleneck issues as Advata did. She said this healthcare expertise is due in part to the fact that some of Advata’s legacy companies are nearly a decade old, as well as Advata’s relationship with Providence. Rezek said her company consistently uses Providence as its alpha and beta customer to learn more about how its technology performs and how it can be scaled and commercialized for the benefit of other providers.
Advata makes money by charging its customers for the use of its software, though Rasheed said the company is too young to be profitable yet. In this important attribute of profitability, and despite Advata having 30 customers and an established revenue base, the company is very much like any other young, traditional startup.
Photo: Filograph, Getty Images
