Innovaccer CEO Abhinav Shashank

Value-Based Care

Innovaccer Acquires Pharmacy Quality Solutions

It’s already shaping up to be a big year for Innovaccer, which just announced its second acquisition in three months after picking up pharmacy-payor performance company Pharmacy Quality Solutions (PQS).

PQS connects payors and providers to standardized tracking of medication quality measures, plus value-based reimbursement programs focused on adherence, outcomes, and safety.

• The PQS platform is designed to optimize medication management for Medicare, Medicaid, and commercial populations, covering 95% of all community pharmacies, the top 10 pharmacy chains by store count, and over 60 million lives.

• The acquisition not only accelerates Innovaccer’s VBC roadmap, but also adds a treasure trove of pharmacy data to Innovaccer’s existing ecosystem of payors and providers – not to mention the potential to cross-promote services to complementary payors and pharmacies.

The talk on the show floor at HIMSS was the we could see as many as four more acquisitions from Innovaccer before the end of the year, targeting data-oriented teams that can propel Innovaccer’s three-pronged forward strategy:

• Value – transitioning from fee-for-service to value-based care (Health Cloud and PQS)
• Productivity – shifting from burnout to AI-driven productivity (upcoming AI Copilot)
• Experience – moving from encounter-based care to experience-driven care (Cured acquisition)

While last year failed to produce a much-anticipated spike in M&A fueled by attractive valuations, startups’ increasingly depleted war chests have set up the current market to be even more favorable for potential acquirers.

• Startups working with enterprise customers could start leaning toward mutually beneficial acquisitions from their partners, which helps founders find a path forward while allowing enterprises to sustain their work with valuable clients. 

• Others like Innovaccer will be looking to M&A to bolt-on complementary features or capture market share in adjacent categories. While running out of runway might not guarantee more M&A activity, it certainly tips the scales in that direction.

The Takeaway

Innovaccer is quickly delivering on its ecosystem approach to integrating payors, providers, and pharmacies through a connected AI-enabled data infrastructure. Although an acquisition’s success is determined as much by the hard work put in post-announcement as it is by the target, Innovaccer so-far appears to have its playbook dialed.

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The Wire

• HiLabs Locks $39M: HiLabs locked in $39M in Series B funding to hone its AI capabilities for medical data cleanup, including the build-out of a generative AI tool to parse value-based care contracts. The startup is already ingesting and cleansing data for four of the country’s top ten payors (along with several regional players, who use its AI analytics tools to boost the accuracy of provider directories while identifying and addressing medical claim errors.

• Seniors Prefer Support From Humans: The vast majority of people over the age of 65 prefer human help to digital help through apps and websites, according to a Papa survey of 521 US seniors. Although tech use remain highs among seniors, 85% of respondents would be likely to follow up on a health-related referral if it required them to get support from someone who would help them in person, compared to 35% who would follow through to get support via a virtual care coordinate, and just 16% for support from a chatbot.

• Eli Lilly + Amazon Pharmacy: Eli Lilly is teaming up with Amazon Pharmacy to offer home delivery for diabetes, migraine, and obesity medications, including the blockbuster GLP-1 medication Zepbound. The drugmaker rolled out its LillyDirect DTC service in January to bring consumers convenient access to telehealth and pharmacy services, and now Amazon Pharmacy will serve as its third-party dispensing provider along with online pharmacy Truepill (prescriptions split between the two depending on patient health coverage and other factors).

• The Best Time for Text Messages: Text messages for mental healthcare are most effective later in the day, per a new study in PLOS Digital Health. Researchers found that texts based on cognitive behavioral therapy were far more likely to improve mood ratings between 3pm-6pm, compared to texts sent from 9am-12pm. Increases in mood were also most pronounced during the first three weeks of the 60-day study, and the time that the texts were sent had a significantly larger impact on outcomes than the content of the message (behavioral activation vs. coping skills).

• Mayo Clinic Launches Solutions Studio: Mayo Clinic Platform launched its Solutions Studio program to accelerate the development, validation, and deployment of digital health tools. Solutions Studio program will streamline commercialization of new solutions by providing curated de-identified data from diverse global regions for model development, a library of tools with federated training capabilities, objective model performance assessments through Mayo Clinic Platform_Validate, and simplified workflow integrations through Mayo Clinic Platform_Deploy.

• Similar Errors in Video & Phone Telehealth Consults: A recent study in JAMA Network Open suggests there aren’t significant differences in doctors’ medication errors between telephone and video-based telehealth. About 87% of patient interactions did not result in a physician-related medication error, while 9.7% of patients experienced one error and 2.8% experienced two or more – with no significant difference between modalities. Researchers also found that children are three to four times more likely than adults to have a medication error during ED visits.

• Thyme Care Oncology Partners Debut: Value-based oncology startup Thyme Care debuted Thyme Care Oncology Partners (TCOP), a dedicated platform to support oncology practices in the transition to VBC models. Through payor and provider partnerships, TCOP fosters collaboration and prioritizes patient-centric care while reducing costs. Over 400 oncologists across 25 states are already participating, and among other benefits will now have the chance to participate in quality incentive programs to create additional revenue streams.

• Breast Cancer Risk in Spotlight: National attention was on breast cancer risk assessment last week after movie star Olivia Munn revealed that her doctors discovered breast cancer following a risk assessment score. Munn said after a screening mammogram her physician calculated her lifetime breast cancer risk as 37%; this led to additional testing – including MRI – that detected breast cancer in the 43-year-old actress. The news could boost developers of breast cancer risk awareness software.  

• Workforce Pressures Eclipse Financial Challenges: Workforce challenges topped the list of health system leadership concerns for the third year in a row, according to a survey of 241 hospital CEOs by the American College of Healthcare Executives. Prior to workforce shortages’ recent streak, financial challenges held the top spot for two decades without interruption. Within workforce challenges, a shortage of technicians was identified as the biggest concern (87%), followed a hair behind by a shortage of RNs (86%).

• Another FDA AI Guidance Document: The FDA has posted a new guidance document that details how the agency’s various divisions will be working together to regulate AI in healthcare. The document outlines how CDRH, CBER, CDER, and OCP will align their efforts to advance the responsible use of AI for medical products while also supporting innovation, and is a companion to previously released FDA documents on change control plans for AI. While the number of FDA-cleared AI algorithms has boomed, the agency is still facing industry pressure for faster approvals. 

• Dangers of Ultra-Processed Food: A new umbrella meta-analysis review added more evidence of ultra-processed food’s association with poor health outcomes. The review of 45 pooled analyses with a total of 9.9M people suggests that people who consume ultra-processed foods have a 1.5-times higher risk of CVD-related mortality and 1.13-times higher risk of diabetes. UPF consumers also had 1.5-times higher odds of experiencing a range of common mental health disorders.

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