- PointClickCare Technologies is buying Collective Medical for just under $650 million, Business Insider has learned.
- PointClickCare is health IT company that helps nursing homes and other long-term care facilities run their businesses. Collective’s tech keeps doctors updated about their patients.
- Once combined, the hope is to help providers shift to payment models that reward them for keeping patients healthy instead of making money when they get surgeries and treatments.
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Health information company PointClickCare Technologies is buying Collective Medical, a Salt Lake City-based healthcare startup, for just under $650 million, two people with knowledge of the deal told Business Insider.
Collective works with roughly 20% of US hospitals to coordinate care for vulnerable patients, like those with opioid use disorders, mental health conditions, and other complicated illnesses or injuries that require multiple types of doctors and care. Collective’s tech plugs into electronic records to show doctors pertinent patient data in real time — notifying them, for instance, if someone’s recently been discharged from a hospital.
Collective was valued at $169.63 million after its last funding round in 2017, according to Pitchbook data. Maverick Ventures, Kaiser Permanente, and Kleiner Perkins are among Collective’s investors.
PointClickCare for its part has a platform that more than 21,000 nursing homes and other long-term care facilities use to run their businesses. It’s a kind of system of record that also offers mobile apps and documentation aids, as two examples, allowing care teams and health plans to work together and keep track of patients. PointClickCare’s investors include the private equity firms JMI Equity and Dragoneer.
The companies started working together in 2019, combining Collective’s tech for care coordination with PointClickCare’s platform for some of its customers.
Now through the combined entity, the companies are hoping their tech can fix what can be an extremely frustrating healthcare experience for folks with the most need. Both of their populations are complex. Some of the patients have housing insecurity, behavioral health problems, or common health problems associated with getting older.
“They just need everybody to be on the same page and have it all work. But the system today doesn’t do that,” Collective Medical’s CEO Chris Klomp told Business Insider. “[Together] we can stitch all those care settings together, much more seamlessly, so that they’re almost indistinguishable from the patient’s perspective.”
The companies want healthcare to ditch fax machines
The move follows a federal push requiring health plans and providers to do a better job of communicating with each other and patients.
New rules about releasing data stem from the Centers for Medicaid and Medicare Services and well as the Obama Administration’s 21st Century Cures Act. While delayed due to the coronavirus pandemic, they’re causing companies from Google to Epic to deal with the problem of being more digital-friendly.
A person familiar with the transaction said that PointClickCare and Collective’s union could be a natural experiment for researchers to see if a better flow of information helps keep people healthier.
Picture a nursing home patient at PointClickCare facility that’s been discharged from a hospital after an injury, Klomp said. The patient develops shortness of breath and is taken to a different emergency room, but probably just needs help stabilizing their breathing, not an overnight stay. Collective pushes notifications through the hospital record system, telling the ER physician that there’s a bed waiting for the patient back at the nursing home, he said.
That way, the ER doctor could feel comfortable sending the patient back after they’ve been stabilized, avoiding what might otherwise be an expensive and unnecessary overnight stay in the hospital.
It sounds simple, but in the healthcare world of fax machines and signatures, such coordination between clinicians and workers at different companies is uncommon.
The coronavirus pandemic exposed just how much can go wrong when dealing with frail patients and data holes. Just in New York nursing homes, more than 6,900 people have died, according to a long-term care nonprofit. During the surge in March and April, the homes often didn’t know if people tested positive for the virus during their hospital stays, but still had to admit them after discharges.
Doctors need better tech to coordinate
The acquisition should also help PointClickCare support what some insiders are calling a trend towards “value-based” care, where health plans pay providers flat fees to keep patients healthy. With encouragement from CMS, the model is gaining traction among startups that care for frail populations, like Oak Street Health, Iora Health, and CityBlock Health.
Read more: Meet the 8 primary-care companies building a new future for medicine during the pandemic
PointClickCare and Collective provide the IT guts, not the care itself. But they want to equip providers and health plans moving away from fee-for-service payments, with the data they need.
Without interconnected tech, care coordinators can’t make sure that providers in other parts of the system are following their protocols, Dave Wessinger, the president of PointClickCare, told Business Insider.
“Today there’s zero visibility into that — literally none. They don’t even know where they go,” he said. “We can do that at scale,” he added.
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