Arcadia Healthcare Solutions, a provider of software that analyzes and aggregates electronic health-record data, has acquired Sage Technologies, which makes management and analytics software for managed-care businesses and accountable care organizations.
The acquisition will allow Burlington, Mass.-based Arcadia to provide a more full-service software that can analyze both clinical and business data, leaders say. The transaction closed early last week at a value of $28 million, given that the firm achieves certain performance targets. Arcadia announced the deal for the first time on Wednesday.
Rockford, Ill.-based Sage has worked mostly with independent practice associations and physician-hospital organizations, in addition to insurers, and other managed-care firms that share financial risk in value-based care.The software helps these organizations with practice administration and financial analysis and allows them to manage their patient populations at the operational level.
“Just the analytics component of this alone is on its way to a $25 billion marketplace in the next two years, and with the problem of understanding data as these organizations migrate to more of a value-based care model, it's still early especially as you think of clinical data,” said Arcadia CEO Sean Carroll, in an interview with Modern Healthcare.
This is Arcadia's second acquisition after picking up Concordant, a health IT infrastructure planning and management firm that helped Arcadia expand in the ambulatory market. Arcadia has been “laser-focused” on working to better serve IPAs and integrated delivery networks, which aren't often prepared to use their enormous troves of data to understand their patients and business, Carroll said.
“We will be a very competitive, significant and relevant provider in this very important space as we support organizations that are committed to this imminent drive toward value-based care and global payment models,” Carroll said. “Organizations on that journey, as we look at the market, are realizing every day the absolute necessity for population-level data.”
Arcadia, was particularly attracted to Sage's loyal client base, which includes ACOs they've set up and managed, as compared to other firms, Carroll said. Most of its customers have stayed with the company for 10 years and report high satisfaction.
The deal is being funded by Arcadia's existing investors as well as new investors, led by Peloton Equity. Other firms include Morgan Stanley Alternative Investment Partners, Zaffre Investments and Escalate Capital Partners.
Arcadia also provides consulting and outsourcing for various EHR-related functions. Sage's employees will remain in their positions and become a part of Arcadia, and Sage will become a new business line within Arcadia, the company said.