arcadia healthcare solutions award write up

2016 North AmericanHealthcare Data Analytics

Product Line Strategy Leadership Award

2016

NORTH AMERICANHEALTHCARE DATA ANALYTICS

PRODUCT LINE STRATEGY LEADERSHIP AWARD

2016

BEST PRACTICES RESEARCH

© Frost & Sullivan 2016 1 “We Accelerate Growth”

Contents Background and Company Performance ........................................................................ 2

Industry Challenges .............................................................................................. 2

Product Line Strength and Customer Impact ............................................................ 2

Conclusion........................................................................................................... 5

Significance of Product Line Strategy ............................................................................ 7

Understanding Product Line Strategy Leadership ............................................................ 7

Key Benchmarking Criteria .................................................................................... 8

Best Practice Award Analysis for Arcadia Healthcare Solutions ......................................... 8

Decision Support Scorecard ................................................................................... 8

Product Line Strength ........................................................................................... 9

Customer Impact ................................................................................................. 9

The Intersection between 360-Degree Research and Best Practices Awards ..................... 10

Research Methodology ........................................................................................ 10

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 11

About Frost & Sullivan .............................................................................................. 12



Background and Company Performance

Industry Challenges

Healthcare analytics is widely regarded as a key enabler of value-based care. Robust usage of this technology allows health systems to conduct data-driven research for the purpose of improving operational efficiencies, eliminating preventable costs, and streamlining clinical effectiveness.

The adoption of analytics in healthcare has started to take off only recently. Today, almost 50% of US-based hospitals utilize enterprise intelligence software; however, only 15% of hospitals could develop enterprise-level patient profiles for personalized treatment due to usage of analytics solutions that do not accurately identify patients across the continuum of care. Therefore, analytics adoption in US healthcare is not consistent; health systems embrace a diverse array of deployment strategies that demonstrate different implementation maturity levels. Some health systems could utilize advanced enterprise data processing architecture to derive patient-specific insight from disparate medical data sets, whereas others still rely on basic reporting capabilities of legacy business intelligence (BI) tools. As the Centers for Medicare & Medicaid Services (CMS) compels more health systems to attribute higher net patient revenue to patient outcomes, analytics investment tied to population health management (PHM) is likely to be prioritized for the next 5 years. Progressive health systems aspire to devise growth strategies around analytics technologies that enable early identification of care leakages, automate patient risk assessment, facilitate targeted intervention, support proactive member outreach, and benchmark enterprise-level clinical, financial, and operational utilizations.

The supply market is fragmented, with both plug-in application providers and vendors with integrated analytics solutions tied to underlying electronic health record (EHR) or PHM platforms. Large health systems, on the road to accountable care, are compelled to utilize multiple analytics partners for comprehensive patient data analysis at an enterprise level. This critical pain point necessitated entry of next-generation health data analytics solutions that are IT agnostic, scalable, and remotely accessible.

Product Line Strength and Customer Impact

Breadth

Frost & Sullivan’s independent research shows that both payers and providers are challenged by the ever-expanding scope of healthcare. The presence of multiple EHR platforms, complex reimbursement guidelines, robust quality reporting requirements, and diverse patient populations is compelling health systems to opt for interoperable analytics solutions that achieve seamless clinical integration (with EHRs, clinical decision support systems, medical devices, and patient engagement platforms), eliminate care silos, automate patient risk stratification, and lend unmatched ability to generate evidence



based care principles, personalized to each patient’s immediate and impending care needs.

Arcadia Healthcare Solutions serves those purposes through Arcadia Analytics, a next- generation clinical and claims analytics platform capable of harmonizing medical and billing records of 20 million patients in the US. Backed by the EHR Data Connect platform, Arcadia helps users develop a master patient index (MPI) — a unified patient view for physicians, care managers, claims executives, and hospital CXOs. A MPI helps providers identify and remove inaccurate/duplicate records hidden in disparate EHRs, appointment management platforms, and billing systems. The medication error rate currently ranges between 50 and 60% for providers exchanging clinical information across a delivery network. Medication errors due to inaccurate records result in preventable adverse events (e.g., hospital-acquired infections and comorbidities). Arcadia has supported customers in improving efficiency of care delivery as the MPI accurately identifies patients across the continuum of care and allows caregivers to allocate the best possible workflows to at-risk and chronic patients. Data-driven treatment yields tangible values to health systems aspiring to improve operational efficiency, prevent readmission, and expedite patient discharge.

Highly Scalable Technology Solutions

Technology scalability is critical in the US healthcare data analytics market because many providers have failed to optimize patient outcomes due to the prevalence of closed-loop, practice-centric technology infrastructures that restrict analytics platforms from capturing and analyzing patient information at an enterprise level.

Arcadia has managed to optimize more than 30 EHR ecosystems in the past 15 years, and the company demonstrates a superior all-round ability to churn claims data around vendor-agnostic IT interfaces. Arcadia is supporting 40,000 providers in the United States with its comprehensive IT and managed care capabilities. A strong foothold in a progressive, value-based healthcare market has enabled Arcadia to continue expanding in the country. From 2013 to 2015, Arcadia grew its analytics solution client base by 5 times and patient coverage by 100%, to 23 million.

Technology Leverage

Frost & Sullivan sees that healthcare data analytics requirements vary widely depending on a health system’s strategic, technological, and operational preparedness. Most mature providers deploy advanced analytics solutions to stratify health risks of the 10 to 15% of a patient population who are responsible for the highest levels of hospital costs. This results in chronic care cost containment because it achieves higher treatment accuracy, facilitates early identification of comorbidities, and prevents patients from acquiring hospital-driven infections, which leads to early discharge. As providers start to expand the scope of analytics-led care intervention to at-risk patients, they strive to further source point solutions that eliminate departmental silos and facilitate cross-continuum care monitoring



at the patient, practice, and physician levels. More mature providers looking for higher spend visibility and centralized control remain receptive to full-fledged platforms (often embedded into EHR or PHM platforms) that pursue data analytics at a community level. Pure-play platforms also allow providers to effectively negotiate payments with health plans as PHM-enabled analytics solutions highlight regional disease prevalence, predict per-capita care utilization rates, and analyze behavioral health factors that drive chronic conditions. Arcadia’s Web-based analytics solution addresses both objectives and is a value enabler for a diverse range of healthcare customers, embracing both value- and volume-based payment models.

Features

Frost & Sullivan has found that progressive analytics solutions are intuitive, scalable, user-friendly, vendor agnostic, and powered by a sophisticated data validation algorithm that normalizes millions of medical data sets quickly and generates personalized clinical, financial, and BI reports. Arcadia’s solution satisfies all the criteria and demonstrates additional capabilities such as code-free measure creation for quality reporting by non-technical staffs (MU Core/Menu [Stages 1 and 2], PQRS, NQF CQM, NCQA PCMH, CMS ACO, HEDIS/Stars); full database access for customers’ analysts and BI personnel; unprecedented integration of claims and clinical data for each patient; modifiable validation algorithm for better IT alignment with customers, and Web-based access through iPads and smartphones.

Favorable Customer Purchase Experience

Arcadia realizes that the healthcare ecosystem is changing rapidly with the emergence and adoption of new, complex health IT solutions. Many providers and payers want to devise risk-free, value-based health plans but they often lack the experience to model health plans in-house. Many health insurance companies incurred huge losses in 2015 because they did not anticipate the demand for healthcare services and ended up with lower revenue in the form of premiums than they paid out. Humana and UnitedHealth Group lost $176 million and $475 million, respectively, and Aetna reported a negative margin of 3% to 4%. Frost & Sullivan predicts that these large health insurance companies will start to recalibrate premium assessment based on analytics-driven data indicators and push member-providers to also embrace analytics-driven business conclusions, supporting revised health plans.

Arcadia’s managed care portfolio is thus positioned as a strategic business unit for health systems that are transitioning from volume to alternate payment models. It is one of the few companies to provide sound, value-based contracting advisory services (including design and deployment methodologies) to leading payers (e.g., UnitedHealthcare, Excellus, Community Health Plan of Washington, Fidelis Care, Network Health) and providers (e.g., ACP, Ardent Health System, Crouse Hospital, Silverton Health) in the United States. Arcadia’s managed care experts advise health systems, devising ACO care ecosystems; outsourcing in-house BI units; revitalizing poor-performing incumbent EHRs;



and revamping IT security and infrastructure for cross-continuum health information exchange.

Such unique managed care capability, coupled with agile IT solutions enabling PHM, drives customer advocacy and loyalty for Arcadia Health Solutions.

Customer Ownership Experience

Arcadia’s customers are progressive and recognize the company as a leading provider of IT and managed care services in the US healthcare data analytics market. They value Arcadia’s ability to match patients and their care members across data sources for developing a unified patient view with almost 99% specificity and 93% sensitivity.

Overall, customers feel that Arcadia allowed them to:

• Improve quality ratings through robust reporting of more than 200 quality measures

• Rationalize enterprise cost by benchmarking utilization for specific events

• Control chronic conditions by highlighting patients requiring outreach from care members

• Manage enterprise risks through automated analysis of EHR data, indicating care gaps

• Optimize operational efficiency at a practice level through monitoring of workflow productivity and patient satisfaction scores

• Render evidence-based care through reporting of network-level best practices

• Pursue executive analysis through reporting of key metrics at an enterprise level

• Embrace new payment models emphasizing care accountability through reporting of payment model-specific enrolment, attribution, and quality metrics

Conclusion

Payers and providers acknowledge the benefit of clinical, operational, and financial reporting capabilities amid the growing need to manage, monitor, and benchmark health or business outcomes at the population and patient levels. In the PHM era, these health systems strive to leverage predictive analytics to support visionary innovations in precision care.

Arcadia provides next-generation analytics solutions, and it has managed to achieve rapid growth both inorganically (acquiring Sage Technologies in 2015, which contributed 57% of



yearly revenue) and organically (launching an upgraded Analytics 4.0 and introducing Arcadia Lab, driving triple-digit growth in client acquisition).

With its strong overall performance, Arcadia Healthcare Solutions has earned Frost & Sullivan’s 2016 Product Line Strategy Award for the North American healthcare data analytics market.



Significance of Product Line Strategy Ultimately, growth in any organization depends upon customers purchasing from your company, and then making the decision to return time and again. A full, comprehensive product line that addresses numerous customer needs and preferences is therefore a critical ingredient to any company’s long-term retention efforts. To achieve these dual goals (customer value and product line strength), an organization must be best-in-class in three key areas: understanding demand, nurturing the brand, and differentiating from the competition.

Understanding Product Line Strategy Leadership As discussed above, driving demand, brand strength, and competitive differentiation all play a critical role in delivering unique value to customers. This three-fold focus, however, must ideally be complemented by an equally rigorous focus on building a superior and comprehensive product line.



Key Benchmarking Criteria

For the Product Line Strategy Leadership Award, Frost & Sullivan analysts independently evaluated two key factors—Product Line Strength and Customer Impact—according to the criteria identified below.

Product Line Strength Criterion 1: Breadth Criterion 2: Scalability Criterion 3: Technology Leverage Criterion 4: Features Criterion 5: Supply Chain Reliability

Customer Impact Criterion 1: Price/Performance Value Criterion 2: Customer Purchase Experience Criterion 3: Customer Ownership Experience Criterion 4: Customer Service Experience

Criterion 5: Brand Equity

Best Practice Award Analysis for Arcadia Healthcare Solutions Decision Support Scorecard To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool allows our research and consulting teams to objectively analyze performance, according to the key benchmarking criteria listed in the previous section, and to assign ratings on that basis. The tool follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Product Line Strength and Customer Impact (i.e., the overarching categories for all 10 benchmarking criteria; the definitions for each criteria are provided beneath the scorecard). The research team confirms the veracity of this weighted scorecard through sensitivity analysis, which confirms that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies.



DECISION SUPPORT SCORECARD FOR PRODUCT LINE STRATEGY LEADERSHIP AWARD

Measurement of 1–10 (1 = poor; 10 = excellent)

Product Line Strategy Product Line Strength

Customer Impact Average Rating

Arcadia Healthcare Solutions 9 9 9

Product Line Strength Criterion 1: Breadth Requirement: Product line addresses the full range of customer needs and applications

Criterion 2: Scalability Requirement: Product line offers products at a variety of price points and functionality levels

Criterion 3: Technology Leverage Requirement: Demonstrated commitment to incorporating leading edge technologies into product offerings, for greater product performance and value

Criterion 4: Features Requirement: Products offer a comprehensive suite of features to serve customers at multiple levels of functionality, ease of use and applications

Criterion 5: Supply Chain Reliability Requirement: There is sufficient control over the supply chain to ensure availability of key components and thereby the availability of products in the product line

Customer Impact Criterion 1: Price/Performance Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market

Criterion 2: Customer Purchase Experience Requirement: Customers feel like they are buying the most optimal solution that addresses both their unique needs and their unique constraints

Criterion 3: Customer Ownership Experience Requirement: Customers are proud to own the company’s product or service, and have a positive experience throughout the life of the product or service

Criterion 4: Customer Service Experience Requirement: Customer service is accessible, fast, stress-free, and of high quality

Criterion 5: Brand Equity Requirement: Customers have a positive view of the brand and exhibit high brand loyalty



The Intersection between 360-Degree Research and Best Practices Awards

Research Methodology Frost & Sullivan’s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry players and for identifying those performing at best-in-class levels.

360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS



Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Frost & Sullivan Awards follow a 10-step process to evaluate award candidates and assess their fit with select best practice criteria. The reputation and integrity of the Awards are based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify award recipient candidates from around the globe

• Conduct in-depth industry research

• Identify emerging sectors • Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

• Interview thought leaders and industry practitioners

• Assess candidates’ fit with best-practice criteria

• Rank all candidates

Matrix positioning all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

• Confirm best-practice criteria • Examine eligibility of all

candidates • Identify any information gaps

Detailed profiles of all ranked candidates

4 Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

• Brainstorm ranking options • Invite multiple perspectives

on candidates’ performance • Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5 Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

• Share findings • Strengthen cases for

candidate eligibility • Prioritize candidates

Refined list of prioritized award candidates

6 Conduct global industry review

Build consensus on award candidates’ eligibility

• Hold global team meeting to review all candidates

• Pressure-test fit with criteria • Confirm inclusion of all

eligible candidates

Final list of eligible award candidates, representing success stories worldwide

7 Perform quality check

Develop official award consideration materials

• Perform final performance benchmarking activities

• Write nominations • Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8 Reconnect with panel of industry experts

Finalize the selection of the best-practice award recipient

• Review analysis with panel • Build consensus • Select winner

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform award recipient of award recognition

• Present award to the CEO • Inspire the organization for

continued success • Celebrate the recipient’s

performance

Announcement of award and plan for how recipient can use the award to enhance the brand

10 Take strategic action

Upon licensing, company may share award news with stakeholders and customers

• Coordinate media outreach • Design a marketing plan • Assess award’s role in future

strategic planning

Widespread awareness of recipient’s award status among investors, media personnel, and employees



About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

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