Health Catalyst, a data warehousing and analytics company, closed a $41 million series C funding round, bringing the total amount raised to nearly $100 million from existing investors, such as Sequoia Capital, Norwest Venture Partners, and Kaiser Permanente Ventures. Last year, the company was one of the top digital health investments, according to Rock Health. Chief executive Dan Burton says he might consider another round, before going public in the next two years.
Much like InterSystems, Health Catalyst is muscling its way into Oracle and IBM territory, by developing data management tools that are uniquely suited for health care. “Clinical data is so much more complicated that managing bank accounts or shoe sizes,” says Burton. Oracle typically captures data and converts it into a specific format, whereas Health Catalyst allows for more flexible manipulation of data–which it aggregates from electronic health records, making its system faster to implement, and easier to query. Last year, it warehoused 14 billion rows of data within 90 days for Indiana University Health which runs 19 hospitals. “A classic enterprise warehouse structure takes 5 years to populate in phases,” says Yohan Vetteth, head of Healthcare Data and Analytics at Stanford Hospital & Clinics, which picked Health Catalyst over Oracle.
With government payment reforms underway, health care providers are scrambling to make sense of the disparate data sitting in electronic health records, to identify gaps in patient care. More than a dozen hospital systems have bought Health Catalyst’s software, including customers that have invested in the company, such as Indiana University Health (CHV Capital), Kaiser Permanente (through its venture arm), and Partners HealthCare. Burton says bookings were up more than five times to $45 million in 2013, and he expects them to double this year.
Texas Children’s Hospital was looking to aggregate patients with asthma, and identify areas of improvement from time of admission into the emergency room to discharge. A team of clinicians and informaticians quickly discovered that pediatricians were ordering chest x-rays 70% of the time, as opposed to the national average of 35%. “It was an epiphany” says Charles Macias, director of Evidence Based Outcomes at the hospital. “That data was valuable in providing transparency of care.” Chest x-ray orders have since dropped to 35%.
Health Catalyst’s pedigree helped win clients. Steve Barlow and Burton’s brother Thomas founded the company in 2008, after developing the data warehouse at Intermountain Healthcare, along with Dale Sanders, now at Health Catalyst. Dan Burton credits their work for helping Intermountain lower costs per patient and boost outcomes. Dad David Burton, an internist and former Intermountain executive, also joined as chairman. Dan Burton, who says family ties are secondary at the company, was Health Catalyst’s first big investor, and was persuaded to become CEO by Sequoia Capital.
With the newly raised funds, Burton plans to develop 200 more clinical applications, including one that flags potential medical errors. He needs to stay one step ahead of the competition. “I’ve learned never to underestimate IBM and Oracle,” he says.
Source: Forbes Business