Here at Schwartz Communications, we're seeing a few more "green shoots" of recovery: Companies in the healthcare IT sector are scoring a mini surge in VC funding after what seems like a protracted ice age. There's also been an uptick in mergers and acquisitions (AllScripts - Eclipsys is just one example).
Of that,
$157 million was funneled towards U.S. medical software and information services companies: a 91% improvement over the Q2 2009. Clinical decision support software ($77 million), health administration software ($37 million), medical software and information services ($15 million), drug discovery/bioinformatics software ($15 million) and medical imaging software ($13 million) led the pack. There were fewer sector deals overall, but larger amounts of capital raised. Increased interest in
health information exchanges (HIE), accountable care organizations (ACOs) and new healthcare payment models represent the result of these investments.
Interestingly, many of these healthcare IT deals were early stage investments with a consumer focus - a growing area of our Healthcare IT practice. The recently released final rules on
Meaningful Use, which in turn drives the allocation of ARRA stimulus money, is also helping drive this trend. We're hoping it's a trend that picks up steam!
Tags:
ARRA,
healthcare IT PR,
healthcare public relations,
M&A,
Meaningful Use,
VC Funding
Posted by Doug Russell on July 30, 2010 at 3:39 PM
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The eagerly anticipated HITECH Act's final rule on "meaningful use" of Electronic Health Records (EHRs) was announced yesterday by HHS Secretary Kathleen Sebelius. It clarifies how doctors and hospitals can qualify for federal aid when they adopt EHRs. At stake: Up to $27 billion in incentives over the next ten years - $44,000 max per clinician under Medicare and $63,750 per clinician from Medicaid. Hospitals also stand to receive millions from "meaningful" EHR implementations.
Lack of definition on meaningful use had stalled many EHR implementations, especially at smaller hospitals, while leaving vendors in a painful wait-and-see position. Last January, many vendors, healthcare organizations and physicians groups like the MGMA contributed their suggestions to a definition during the public comment period, hoping to influence a ruling that didn't position them out of the stimulus-fueled market.
Yesterday's announcement outlined a definition by the Centers for Medicare & Medicaid Services (CMS) on minimum requirements that providers must meet through their use of certified EHR technology to qualify for stimulus dollars. Listed are a "core" group of requirements - like e-prescribing - that must be met, plus an a la carte "menu" of procedures from which providers may choose. This approach is meant to have teeth, but also give providers flexibility to pursue their individual needs. While certainly lowering barriers to federal dollars (and market barriers to vendors), some point out that this also dilutes quality. Many, however, are relieved – and thankful for the public comment period – as the initial “all or nothing” approach, as first outlined, meant that many organizations would likely have not even tried to qualify, fearing they couldn't possibly meet the stringent criteria needed to get funding.
In addition to the final rule on meaningful use, the U.S. Department of Health and Human Services' Office of the National Coordinator of Health Information Technology (ONC) also issued a rule identifying the standards, implementation specifications and certification criteria for EHR technology. But, as ZDNet Healthcare points out, "the companies which will do the certifying have yet to be chosen, after which vendors will have to line up to assure customers of stimulus cash." Assuming their technology is certified, many healthcare IT vendors now have the opportunity to help physicians improve the various processes outlined in the a la carte menu.
Let the wild rumpus begin.
Tags:
EHR; Electronic Health Records; Meaningful Use; MGMA; Healthcare IT
Posted by Doug Russell on July 14, 2010 at 11:54 AM
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