Is Aetna, Medicity deal the beginning of the end for independent HIE vendors?

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While Aetna's $500 million acquisition of health information exchange vendor Medicity this week appears to be a direct reaction to UnitedHealth Group's deal for Axolotl earlier this year, the move is much bigger than one-upsmanship, and likely will start a ripple effect that will end with independent HIE vendors going the way of the dinosaur, writes Chilmark Research blogger John Moore. 

Moore, an IT analyst with the health technology analyst firm, ultimately foresees more deals like these occurring--although probably not on such a grand scale--because of what he calls the "digitization of the sector" thanks to the Health Information Technology for Economic and Clinical Health (HITECH) Act. 

"Administrative and clinical data will increasingly become co-mingled as healthcare/payment reform takes hold," he writes. "The solutions available today to assist with managing that data and delivering it where it is needed, when it is needed are still immature. Acquisitions such as this and others to come will focus on addressing this need/opportunity." 

In the meantime, the deal has ramifications for both parties. For Aetna, it means access to a network of more than 760 hospitals and 125,000 doctors that CEO Mark Bertolini says will improve the quality of patient care. "[H]aving ownership of Medicity may allow Aetna the opportunity to obtain much better, timely and accurate population health data to more effectively manage risk and concurrently create more personalized benefit plans for their customers," Moore writes. 

And while Medicity now gets the clout of a big-name behind its brand, Moore warns that it must be aware that the move could turn off both current and perspective customers. "[T]here is that thorny issue of payers being so close to clinical data," he writes. "Medicity will likely lose several prospects to competitors and several current customers may rethink their relationship ... going forward." 

Still, the big picture is what captivates Moore. 

"As new payment models are introduced and [integrated delivery networks] move to an [accountable care organization] model, diagnosis-related groups [DRGs] will expand their definition in both directions, and these ACOs will need solutions to help them more effectively manage risk across an expanded definition of care," Moore writes. "This likely will force closer relationships between ACOs and payers, as a payer's core competency is, indeed, managing risk, and ACOs look to tap that expertise." 

For more: 
- read this article from Kaiser Health News
- read this Wall Street Journal report
- read Moore's analysis
- here's the announcement of the Aetna/Medicity deal

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