The Advisory Board Co. is adding to its healthcare offerings with the acquisition of Clinovations, a Washington-based health information technology consulting firm.
Financial terms of the deal were not disclosed. Clinovations works with about 45 clients and has 80 employees, all of whom will be joining the Advisory Board.
The deal was announced during the Advisory Board's third-quarter earnings call.
The Advisory Board, which works with about 3,000 hospitals and systems, has seen its clients make extensive investments in health IT, said Robert Musselewhite, the company's CEO. And they're now looking at how to make the most of those investments.
The larger consulting firm, similarly based in Washington, also has a long history of serving the physician practice management space and in 2010 purchased Nashville-based Southwind. Physicians make up about half of the Clinovations team, and the firm offers a range of health IT planning and implementation services.
Its advantage is being able to offer peer-to-peer discussions, said Dr. Trenor Williams, Clinovations' CEO and co-founder. When the company was founded in 2008, only 5% of physicians were placing orders for labs and drugs using health IT systems—now that number tops 60%.
“I think that speaks to the niche in which we play,” Williams said. “Physicians have gone from the sidelines of technology to the frontlines.”
With the Advisory Board, the firm will be able to offer a broader set of services, and will be able to tap into the larger company's existing offerings around value-based care and population health management.
“Clinovations brings a whole new comprehensive dimension,” said John Deane, president of the Advisory Board's consulting and management division. “It really fills a need that complements what we already offer.”
Williams has been nominated as one of Modern Healthcare's 50 Most Influential Physician Executives and 100 Most Influential People in Healthcare. Clinovations was named one of Modern Healthcare's Best Places to Work in 2014.
For its fiscal third quarter ended Dec. 31, the Advisory Board reported a net loss of $5 million on revenue of $150.2 million. That compares with net income of $3.8 million on $131 million in revenue in the prior-year period.
Its healthcare customers generated 93% of the company's revenue in fiscal 2014 with the remainder coming from education.
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