The artificial intelligence (AI) in health care market is set to top $34 billion by 2025, according to some estimates — and it’s no real wonder why. AI has the potential not only to improve outcomes and reduce costs, but to increase efficiency at almost every level.
One startup that’s successfully maintained pole position is Health Catalyst, a Salt Lake City, Utah-based health care big data company founded in 2009 by Steven Barlow and Thomas Burton. It aims to drive clinical and operational performance improvements in state and regional health plan providers, physician groups, and extended care facilities through its suite of analytics apps. And it’s raising capital to help further progress toward that goal.
Health Catalyst today announced that it has secured $100 million in series F equity and debt financing led by health care investment firm OrbiMed, with participation from existing partners Sequoia Capital, Norwest Venture Partners, Sands Capital Ventures, UPMC Enterprises, and Kaiser Permanente Ventures. It values the company at $1 billion, and comes after a fiscal year during which Health Catalyst experienced over 65 percent growth in annual recurring revenue, over 50 percent growth in revenues, and 80 percent growth in gross profits.
Burton, who serves as Health Catalyst’s CEO, said the proceeds will be used to support “continued expansion” of the company’s technology and services offerings into the life sciences and international markets. It’ll also be used to grow its workforce of 750 people, he said, which saw 200 additions to the roster in 2018.
“As more healthcare organizations are coming to understand, the future of healthcare will rely on the broad and more effective use of their vast stores of data,” Burton said in a statement. “This additional capital will enable us to continue developing the technology and expertise necessary to offer health systems a path to systematically use data to analyze their performance, and then work to make measurable improvement in clinical, financial and operational areas.”
Health Catalysts’ core offering — Data Operating System — comprises a sophisticated AI-driven data warehousing architecture targeted at population health and value-based care; Health Catalyst says that more than 100 million patients and one trillion facts across over 100 hospitals power its insights. It’s not the company’s only product — Health Catalyst this year unveiled Touchstone, an analytics app with AI-driven benchmarking and prioritization features, and Surveillance Module, which it claims is the first app to leverage text analytics and clinician review to monitor, detect, and prevent threats to patient safety before harm occurs.
Health Catalyst has had no trouble attracting customers — perhaps in part because of its star-studded board and executive team, which counts former senior vice president of clinical integration at Novant Health William Caldwell, former senior analytics leader at Kaiser Permanente Jason Jones, and former senior director of EHR Solutions at Encore Health Resources Cathy R Menkiena among its ranks. The company this year partnered with health population management company Medicity, which along with 16 new health systems joined its client base of more than 50.
Health Catalyst claims it added more new customers in 2018 than in any previous year in its history, and says that it brought on a host of individual strategic investors including executive vice president and professor of molecular medicine Dr. Eric Topol and former senior vice president of administration and CIO at Northwestern Medicine Dr. Timothy Zoph.