Data warehousing and analytics startup Health Catalyst has raised $41 million in a series C funding round led by existing investor Sequoia Capital. Health Catalyst CEO Dan Burton said the company, which makes software that manages hospitals’ electronic information, will use the money to develop more than 200 applications designed to meet federal requirements for improving care at reduced costs.
The funding comes as CIO requirements for managing electronic health records are evolving, says Todd Cozzens, a partner of Sequoia. For the last decade, large hospitals have spent on average between $200 and $300 million for software that digitizes, stores and manages health care records he said. But the value of such electronic medical record systems is limited because they don’t effectively allow hospitals to query the data they capture, he said. “Hospitals and physicians are producing this tremendous amount of data, and they are saying: ‘Now what do I do with it?’” Mr. Cozzens said.
The question is crucial. With Medicare and Medicaid now reimbursing hospitals based on the quality of the care they deliver, rather than the volume of patients they see, hospitals need to measure the effectiveness of health services provided. And they also need to find ways to lower costs by reducing unnecessary treatments, as well as readmissions.
Health Catalyst’s software processes and analyzes hospitals’ clinical data as well as administrative and financial data.
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Date: January 27, 2014