Athenahealth splashes into hospital market with startup buy
January 14, 2015 in Medical Technology
Athenahealth, which built its reputation among ambulatory practices by doing the work doctors don’t have time to do, is about to buy itself entry into the hospital market. On Wednesday it announced its acquisition of RazorInsights, which provides cloud-based EHRs to rural, critical access and community hospitals.
“Our team is landing there tonight and will have new ID cards, cell phones, computers tomorrow morning — and next month, they’re going to move into athena Atlanta,” said athenathealth CEO Jonathan Bush.
[See also: Athenahealth creates 500 new jobs.]
In addition to positioning athenahealth to serve a new segment of the healthcare market, athenahealth expects this acquisition to accelerate its work to advance connectedness across the care continuum – what Bush typically calls building the national healthcare IT “backbone.”
“This is the backbone,” Bush told Healthcare IT News on Wednesday. All the nitty gritty work that nurses and doctors do in hospitals to keep track of conditions and medications, which patient is in which bed, “that’s part of the information backbone.”
Athenahealth plans to leverage RazorInsights’ inpatient expertise and technology to extend its presence into the 50-bed-and-under inpatient care environment, which accounts for approximately one-third of the U.S. hospital market. This move builds upon athenahealth’s established position in the ambulatory space, where it serves more than 59,000 healthcare providers.
Athenahealth has achieved Best in KLAS recognition for its revenue cycle management, EHR, and patient engagement services.
[See also: athenahealth topples Epic on KLAS list.]
“Today’s hospital market is woefully underserved when it comes to IT systems and IT partners that are accountable for reducing costs, increasing quality, and enabling a better patient experience,” said Bush, in a news release announcing the pending acquisition. “With RazorInsights, athenahealth will immediately be injected into the inpatient care environment; this is a natural extension for our cloud-based services, will tremendously grow our network knowledge, and will accelerate our introduction of results-oriented, inpatient solutions that hospitals can confidently invest in and demand accountability from.”
Razor Insights is five years old, with angel money, and a 45-member team, Bush said.
“They were either going to raise money or sell to us,” he said. “We have such a great sales force, It’s such a tight match. They know we’re going to build the right product, and it’s going to be much more expensive than the one they just built. What we’re going to layer on top of that is going to make it very valuable very quickly.”
Like athenahealth, a company with a long-standing commitment to supporting the needs of independent physician medical groups, RazorInsights got its start serving a struggling corner of the healthcare industry – one with an acute need for affordable and scalable EHR options, Bush notes. Today, both companies offer cloud-based solutions as an alternative to on-premise software implementations, which require large upfront and ongoing expenditures to install and operate.
“In light of pressures to consolidate, and in some cases, even shut down operations, there is a large and growing market for technologies and services that enable hospitals to deliver higher levels of patient care, reduce costs, and more effectively manage care at the population level,” Reed Liggin, president of RazorInsights, said in a statement.
“By teaming with athenahealth, we can accelerate our common vision to help healthcare provider organizations of all sizes remain independent and thrive despite market challenges,” he added. “We believe that with athenahealth, we can expand the benefits we deliver to our current customers, and together introduce a new class of services that will overcome both industry pressures and the shortcomings of traditional EHR offerings.”