Nine Transformative Healthcare IT M&A Deals of 2015 That Could Reshape the Global Medical Informatics Landscape

In recent days, several major transactions and partnerships have emerged in the healthcare sector—not merely because of their conspicuous price tags, but more importantly, because they have the potential to become game-changers in the current (or near-future) landscape of health information technology. Below are nine noteworthy developments:

★Cerner Corp. Secures Contract with U.S. Department of Defense
On July 29, the U.S. Department of Defense signed with Cerner the largest and most high-profile electronic health record system contract in history.

Cerner, Leidos, and Accenture have jointly taken on this “mega-project,” with an initial value stream of $9 billion. At the same time, this requires team personnel to provide “an off-the-shelf electronic health record (EHR) system solution capable of integrating activities and deployment within the Military Health System,” said a Department of Defense spokesperson.

The U.S. Department of Defense’s decision ultimately led to the formation of three camps: Epic Systems and IBM; Cerner, Leidos, and Accenture; and Allscripts allied with Computer Sciences Corp. (CSC) and Hewlett-Packard.

★IBM Spends $1 Billion on Medical Imaging
Following this acquisition trend, IBM announced on August 6 that it would acquire Merge Healthcare, a global pioneer in medical imaging, for $1 billion. The aim is to integrate Merge’s medical imaging technology into its “Watson Health” division. By leveraging the data and images from Merge Healthcare’s medical imaging management platform and combining them with Watson’s advanced cognitive image analysis capabilities, “Watson Health” will gain the ability to interpret medical images.

IBM executives stated publicly that the purpose of this acquisition is to unlock the value of medical imaging, thereby helping physicians make better care decisions for their patients.

★CVS-Watson Collaborative Research on Chronic Diseases
CVS, the largest pharmaceutical retailer in the United States, operates 7,800 pharmacies and more than 1,000 walk-in clinics (i.e., clinics providing medical services to unscheduled, ambulatory patients). By partnering with IBM’s cognitive computing platform, Watson, CVS has joined the ranks of researchers dedicated to chronic diseases, with plans to investigate how to completely eradicate conditions such as diabetes, hypertension, heart disease, and obesity.

Also incorporated into the study, alongside Watson’s cognitive computing capabilities and CVS’s vast healthcare data, were electronic health records, pharmacy data, and medical claims information. The initiative also engaged CVS consumers and healthcare providers.

The chronic diseases under joint research by CVS and IBM are the leading causes of death and disability in the United States, accounting for 86% of the nation’s $2.9 trillion in annual healthcare expenditures.

★NantHealth and Allscripts Partner to Fight Cancer
Two major health IT companies, NantHealth and Allscripts, jointly announced on March 2 that they would collaborate to develop precision medicine in care.

NantHealth is a company founded by a group of medical researchers, professors, surgeons, and self-made billionaire Patrick Soon-Shiong, dedicated to improving clinical healthcare payment models and providing reliable clinical surgical information. Allscripts, a health information technology company, nearly collapsed a few years ago due to boardroom chaos and only gradually stabilized after Paul Black, a former executive at Cerner, assumed the role of CEO.

The collaboration between these two companies will bring what they call “a comprehensive, evidence-based, personalized healthcare solutions platform.”

★Health Catalyst Acquires HCD (Health Care DataWorks)
U.S. healthcare data management and analytics firm Health Catalyst has acquired Health Care DataWorks (HCD), a company based at The Ohio State University dedicated to improving patient experience, aligning with Health Catalyst’s mission.

This acquisition means that HCD, along with its 28 employees, has become part of Health Catalyst. They will continue to work at their headquarters in Columbus, Ohio. HCD’s clients, including Cedars-Sinai Medical Center, El Camino Hospital, MemorialCare Health System, Orlando Health, and Tampa General Hospital, will continue to be clients of Health Catalyst.

The addition of these 28 members has brought Health Catalyst’s workforce to nearly 400 employees, up from just three when the company was founded in 2008.

★Emdeon Acquires Altegra for $910 Million
In July, Emdeon, a provider of medical software and technical services, announced that it would acquire Altegra Health, a company specializing in developing analytical tools for taxpayers and most providers, for $910 million in cash.

By integrating Altegra Health’s risk adjustment and quality analytics technologies with its own RCM methodologies and payment tools, Emdeon will better and more accurately guide healthcare organizations into a new era of transactional insurance and value-based care.

Emdeon’s intelligent healthcare network currently comprises 700,000 physicians, 5,000 hospitals, and 1,200 payers, and processed approximately 8.1 billion transactions in 2014.

★Premier Acquires CECity to Enhance Performance Management
To enhance performance management, the healthcare alliance Premier acquired CECity, a private SaaS software company, for $400 million. Similar to Premier, CECity also focuses on performance management and improvement, value reporting, and professional education.

Both companies share the same clear objective: to help hospitals and other healthcare institutions deliver higher-quality, more cost-effective medical services.

★Aetna Acquires Humana for $37 Billion
Health insurance giant Aetna announced on July 3 that it would spend $37 billion to acquire its competitor Humana, a managed care company. Under the final agreement, Aetna will acquire all of Humana’s outstanding shares at approximately $230 per share.

Aetna executives stated that the deal would combine Humana’s growing Medicare Advantage enrollment with Aetna’s diversified portfolio and commercial capabilities, creating the nation’s second-largest managed care company serving the vast majority of seniors in the Medicare Advantage program.

★Anthem spends over $54 billion to acquire Cigna
Amid the massive wave of market consolidation, Anthem’s $54.2 billion acquisition of Cigna, a U.S. insurance company, on July 24 drew widespread attention.

This also occurred in the same month that Aetna decided to spend $37 billion to acquire Humana.

As a result, mergers and acquisitions have reduced the number of major private health insurers from the former “Big Five” to just three. Indeed, if both merger deals are successfully completed, Anthem, Aetna, and UnitedHealthcare will emerge as the largest insurers in the United States.

Compiled by Tang Chaoyan | Edited by Mo Renying