- Providence St. Joseph Health has acquired Lumedic, a blockchain-enabled revenue cycle management platform based in Seattle, for an undisclosed sum.
- Lumedic’s next-generation platform uses distributed ledger technology, smart contracts and machine learning with the aim of selling to providers and payers looking to increase efficiencies and reduce costs.
- The deal makes Providence St. Joseph the first integrated provider-payer system with a scalable blockchain tool for RCM, the nonprofit system said Monday at HIMSS 2019 in Orlando, Florida.
RCM is an important area to providers, and a number of vendors are seeking to capitalize on it.
In a Connance survey, 70% of providers claimed it took more than a month to collect from patients. A 2017 Advisory Board analysis found the average 350-bed hospital lost up to $22 million due to revenue cycle issues. Respondents in a recent Billing Tree survey ranked collecting on patient bills the No. 1 payment challenge in 2018.
With pressure to boost financials, hospitals are eager for tools to optimize the billing and collection process and improve the customer experience. The major EHR vendors, as well as other companies, are investing in RCM products as demand for these kinds of services grows. Last year, officials at both Cerner and Allscripts touted RCM as strong growth areas.
Demand for RCM tools and services is also fueling consolidation in the market. Among notable deals was R1 RCM’s February 2018 acquisition of Intermedix’s healthcare division, which includes physicians and emergency services RCM, practice management and analytics.
The Lumedic deal is the latest piece in what Providence St. Joseph officials have described as a “broader vision of healthcare.” Earlier this month, the system launched a for-profit population management company called Ayin Health Solutions. The business will assist providers, payers, employers and governmental department seeking to reduce costs, enhance care and improve population health.
“New technologies like blockchain, artificial intelligence, and machine learning give us an opportunity to view the complexities of today’s health systems through a different lens,” Venkat Bhamidipati, Providence St. Joseph’s CFO, said in a statement. “Our acquisition of Lumedic’s innovative platform is yet another example of how we are pursuing all avenues of transformation, allowing us to redirect unnecessary spend towards either patient savings or care.”
Under the deal, Providence St. Joseph will create a new company with Lumedic’s assets and team, while retaining the Lumedic brand. The RCM business and system will work together to identify potential partnerships with providers, payers and other health-related entities.
The acquisition comes as Tenet Healthcare has been mulling the sale of its Conifer Health Solutions RCM subsidiary as part of a target cost-reduction program to bring down debt. The Wall Street Journal reported last summer that UnitedHealth Group was among several entities interested in the business as it continues to build up its Optum services arm through acquisitions.