Allina Health, a 12-hospital system based in Minneapolis, is outsourcing its information technology data warehousing, analytics and performance improvement areas to Health Catalyst, Salt Lake City, in a deal designed to foster cost cutting and quality improvements.
The 10-year agreement, which includes gain-sharing and an equity investment, carries a potential price tag of about $108 million. Only 80% of the contract cost is fixed, Health Catalyst CEO Dan Burton said. The remaining 20%, roughly $20 million, “is at risk, tied to specified outcomes and improvement goals that we develop jointly,” he said.
Allina and Health Catalyst will use data analytics to identify potential improvement targets. A committee of executives from both organizations will set goals for risk-sharing, quality and cost-improvement portions of the contract.
Sixty Allina employees have accepted employment at Health Catalyst as part of the deal and will receive an ownership interest in the company. Also, while not specifying the equity share, Burton acknowledged that Allina has become “a meaningful owner in Health Catalyst.” —Joseph Conn