Allina Health Outsources Healthcare Analytics In 10-Year, $100 Million Deal
By Christine Kern, contributing writer
The outsourcing of analytics to Health Catalyst includes a potentially game-changing, shared-risk element.
Allina Health and Health Catalyst have inked a 10-year, $100 million contract to combine technologies, clinical content, and front-line personnel that could potentially be a game-changing move for the healthcare industry, according to a press release. The agreement is an “unprecedented effort to improve the quality and lower the cost of care for Allina's patients and to serve as a model for outcomes improvement nationwide.”
The relationship between the two organizations began in 2008, when Allina Health became Health Catalyst's first customer.
“This agreement with Health Catalyst is unique in the industry and will accelerate outcomes improvement for those served through Allina Health as well as create a roadmap for broader outcomes transformation both here and across the country,” Penny Wheeler, MD, president and CEO of Allina Health, said in the release.
“We have made significant progress with care outcomes improvement over the last six years, and we now believe we can take our efforts to the next level by leveraging the experience and know-how of both organizations and our shared history of innovation and transformation.”
Allina Health’s more than 90 clinics, 12 hospitals, and related healthcare services provide non-profit care for nearly one million people across Minnesota and western Wisconsin.
Under the terms of the agreement, Allina Health will outsource its data warehousing, analytics and performance improvement technology, content, and personnel to Health Catalyst. In return, Allina will gain access to Health Catalyst's full technology, content, and deployment expertise to accelerate outcomes improvement at Allina.
The move positions Allina Health as a “living laboratory” and national showcase for front-line outcomes improvement, featuring the latest developments in analytics-enabled improvement from Health Catalyst's portfolio of analytics solutions.
“As payment models continue to transition away from fee-for-service, it becomes increasingly vital for health systems to deeply understand their data in order to pinpoint inefficiencies and then reduce those inefficiencies,” said Duncan Gallagher, CFO of Allina Health. “This partnership is designed to accomplish that goal in a measurable, scalable, repeatable manner.”
Med City News reports the deal represents significant validation for Health Catalyst, according to CEO Dan Burton, who added both sides view the deal as a potential game-changer for the industry. “We hope that this model of shared accountability for outcomes improvement, extending to include technology vendors, becomes more the rule rather than the exception in healthcare,” he said.
Health Data Management when Allina and Health Catalyst first partnered in 2008, Allina was using the vendor’s technology while creating its own in-house analytics team of 70 members. Now, Allina has outsourced the analytics to Health Catalyst, with those 70 team members becoming employees of the vendor. Under the arrangement, according to Gallagher, Allina can leverage Health Catalyst’s core competencies and capital to ensure that the analytics platform is not under-invested, and the move to outsource “was just recognition of that reality and the relationship with Health Catalyst.”
Although Allina will cut some costs during the initial three years of the contract, Gallagher says the driver of the deal was ultimately long-term stability and growth of the platform.