Healthcare Business News

Treo deal positions 3M for ICD-10 switch

By Joseph Conn
Posted: February 21, 2014 - 3:30 pm ET

St. Paul, Minn.-based 3M, has agreed to purchase Treo Solutions, a Troy, N.Y., data analytics and business intelligence specialist serving both providers and more than 60 payers, 3M announced.

The deal better positions 3M for the advent of ICD-10 and other technology changes sweeping over healthcare. Its 3M Health Information Systems is a developer of computerized clinical-coding software and analytics tools.

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“At first blush, the Treo acquisition gives 3M a much stronger play in the healthcare payer space,” said Robert Booz, a vice president and analyst at Gartner, a technology market research firm where he follows health plans and the firms that support them.

“3M has not been traditionally thought of as a provider of payer-based solutions,” Booz said. The deal may change that and it “goes beyond ICD-10. It really goes to payer/provider convergence.”

Financial terms were not disclosed. The deal is expected to close in the second quarter. Treo employs about 185 people and also has offices in Denver and Overland Park, Kan.

A nationwide shift scheduled for Oct. 1 to the far more numerous and detailed ICD-10 family of diagnostic and procedural codes is expected to enhance the abilities of both providers and payers to perform data analytics on cost and quality of care.

On the provider side, Booz said, “One of the terms I've been using is risk-bearing provider entity. It needs to be served with care management, quality assurance and population-health-management tools. Those have traditionally been developed by payers, because they bore the risk.”

With payers, he said, “We're seeing what we're calling the pivotal health plan. It goes beyond the processing of claims and payments of benefits. It becomes an information integrator.”

So, will providers dominate the new healthcare data landscape by adding payers, or will payers dominate by becoming providers?

“My answer is, yes,” said Jon Lindekugel, president of 3M Health Information Systems. 3M is positioning itself to serve both. “I think the market is in a pretty dramatic state of flux. I think capitalism is doing its job, creating a bit of chaos. We can provide examples of payers who are adding providers and providers that are adding payers with the key being alignment of payer and provide incentives leading to healthier outcomes and lower costs.”

Follow Joseph Conn on Twitter: @MHJConn

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