In this webinar, Tim and Dale, who worked together at Northwestern Medicine to establish an early-on and leading enterprise data warehouse solution for the hospital, physicians and medical school, will present their unique perspectives creating a thoughtful environment of comparison and contrast. This won’t be a typical corporate dozer—rather it will provide an opportunity for you to think deeply about the novel nature of your organization’s data. Historically, hospital expansion by building a larger footprint was the way to scale and capture market share. While those things still matter, attention has shifted to the expansion of the distribution of care through virtual and physical access points that embody a far more consumer friendly means to deliver care. It is in those entities that enriched data can be used to deliver care outreach that actually makes a difference for patients. That is where the new margins exist.

1. Data Is The New
Strategic Asset In
M&A
Is Ripping And Replacing EHRs Really Necessary?
April 25, 2018
Tim Zoph - Client Executive and Strategist,
Impact Advisors
Dale Sanders - President of
Technology, Health Catalyst

2. © 2018
Health
Catalyst
• “Top performers across all industries focus first on data
integration and have a plan to do so within six months post-
merger.”
• “40% of M&A value in healthcare is directly tied to IT strategy.”
Mergers, Acquisitions, Partnerships
2

3. © 2018
Health
Catalyst
1. Economies of scale… more efficient through consolidation of shared
services and other infrastructure
• Combining scarce resources
2. Move into complementary markets, by geography or product
3. Reduce risk through larger populations and revenue
4. Improve an underperforming organization or asset and thus increase
revenue
Common Motives Behind M&As in Healthcare
3

4. © 2018
Health
Catalyst
• Your new company is not integrated until your data is integrated
• HIE’s are not sufficient for data integration… not even close
• Ripping and replacing EMRs and ERP systems with a single, common vendor is
not an affordable or timely strategy
• M&A strategy in the digital world should be more about data acquisition
than brick & mortar acquisition
Sanders’ Assertions

5. © 2018
Health
Catalyst
• The prevailing solution: Rip and replace
• You’ll be finished in 3-4 years, if you’re lucky, and be 74% over-schedule,
59% over-budget, and deliver 56% less value than predicted*
• In the meantime…
ERP, EHR, and Other Systems Consolidation
*McKinsey, 2012; Standish, 2013

6. © 2018
Health
Catalyst
Costs to Rip & Replace... Just for EHRs
These are typical numbers, as reported in the industry
• $1.5B for a very large healthcare system
• $646M for a large healthcare system
• $363M for a medium healthcare system
• $127M for a small/medium healthcare system
• 10-15% drop in productivity for 12-18 months
That’s one of dozens of application software systems in today’s healthcare systems
6

7. © 2018
Health
Catalyst
“Will you ever consolidate to a single EHR?”
“Oh no, I can’t imagine. We’ve looked at it a few times, but the total
costs are in the billions, and for what? Minor incremental value? We’re
using our data warehouse and building a software services layer to tie
them together until there are better options.”
--C-level at the largest for-profit health system in the U.S.
7

8. © 2018
Health
Catalyst
EHRs Are The Beginning, Not The End, of Digitizing Healthcare
What data do we need for research, personalized care, and community health?
And, by the way, we have barely
any data on healthy patients

9. © 2018
Health
Catalyst
Evolution of Healthcare IT

10. © 2018
Health
Catalyst
• There generally isn’t one, other than the hope of administrative
savings through IT consolidation
• The strategic value of data acquisition is still largely ignored
What’s the IT Strategy in Healthcare M&A?
10

11. © 2018
Health
Catalyst
IT Strategies That Drive M&A Success
• The acquirer gets its own IT house in-order, first
• Many develop a “Services Oriented Architecture” anticipating the need to be flexible and
adaptable
• IT leaders are heavily involved in the due diligence prior to acquisition
• Carefully plan post-merger integration, during due diligence, and factor those into the
overall acquisition costs
• A data integration plan within 6 months post-merger
10-15% cost savings from a successful IT integration strategy
11

12. © 2018
Health
Catalyst
IT Integration vs. The Technology Stack
Computing Infrastructure, e.g., severs, networks, data centers, storage
Databases and Operating Systems, e.g.
Oracle, SQL, MySQL, Hadoop, Spark, iOS, Android, Linux, Windows
Data Content
Software Applications, e.g. EHR, HR, Finance, Email, Web, etc.
The data content layer is the
only layer in the stack that can
be “peeled” away without
impacting the other layers
There is a tendency to
start here in healthcare

13. © 2018
Health
Catalyst
Which of these three organizational resources has been the most under
utilized to drive organizational value?
1. Data – 86% responded
2. Talent – 11% responded
3. Technology – 4% responded
Poll Question
13

14. © 2018
Health
Catalyst
The Window of Change in M&As . . .
• Define synergies within 12-18
months. This is a must!
• Realize value through data, talent
and technology
• Data and talent are foundational
and enduring; Technology is
transient
• Discover opportunities for business
value while avoiding risks from
technology misalignment
• Engage the C-Suite; Their
sponsorship is key
Organizational Goals Three Primary Value Drivers
14
Value
TechnologyTalent
Data

15. © 2018
Health
Catalyst
• Data creates a more predictive foundation for the new
healthcare system to drive better:
• Operational efficiency
• Risk assessment
• Care delivery
• Scale matters especially for PHM and precision
medicine
• Shift focus from traditional ‘brick and mortar’ to
whether you are becoming a ‘more intelligent
organization'
The Role of Data
15
Value
TechnologyTalent
Data

16. © 2018
Health
Catalyst
• A growing scarcity of IT and caregiver talent
• Take responsibility for developing and retaining the
next generation
• M&As are a pivotal time for choices that make lasting
impacts
• Focus on creating the best environment
• Embrace an innovative mindset
The Role of Talent
16
Value
TechnologyTalent
Data

17. © 2018
Health
Catalyst
• Standardize and simplify the technology portfolio
• Have a disciplined review of cost/risk/security
• Migrate data and technology to the cloud
• Use the M&A change event to accelerate pace
• Make solid business decisions
• Pivot from the incentive-driven technology mindset
The Role of Technology
17
Value
TechnologyTalent
Data
Run! Don’t Walk.

18. © 2018
Health
Catalyst
Join Us for the Healthcare Analytics Summit 18
Sept. 11-13, Salt Lake, Grand America Hotel
TOBY COSGROVE, MD
Former CEO and President of
Cleveland Clinic (2004-2017)
As a cardiac surgeon, he
performed more than 22,000
operations and holds 30 patents
for medical innovations.
KIM GOODSELL
the actualized ‘genomified’, quantified,
digitalized “patient of the future." Her debut
at the 2014 Future of Genomic Medicine
conference made headline news
announcing— “The patient from the future,
here today.”
DANIEL KRAFT, MD
Stanford and Harvard trained physician-
scientist, inventor, entrepreneur, and
innovator. Kraft is the Founder and Chair of
Exponential Medicine, a program that
explores convergent, rapidly developing
technologies and their potential in
biomedicine and healthcare.
BRENT JAMES, MD
Former Chief Quality Officer at
Intermountain Healthcare - known
internationally for his work in
clinical quality improvement,
patient safety, and the
infrastructure that underlies
successful improvement efforts.
PENNY WHEELER, MD
President and Chief Executive
Officer of Allina Health, and
returns a second time as one
of the most popular HAS
speakers ever.
MARC RANDOLF
Co-founder of Netflix, Marc will
share the Netflix story: how a
scrappy Silicon Valley startup
brought down Blockbuster and
the lessons that could be
applicable to healthcare.
JILL HOGGARD GREEN
PhD, RN, Chief Operating Officer – Mission
Health and President – Mission Hospital,
recently named as one of 2017 Becker’s
Healthcare list of the country’s top Women
Hospital and Health System Leaders to
Know.
ROBERT WACHTER, MD
Global Leader in Healthcare Safety,
Quality, Policy, IT; Chair of the
Department of Medicine, University of
California, San Francisco; Best-Selling
Author, “The Digital Doctor: Hope, Hype
and Harm at the Dawn of Medicine’s
Computer Age.”
More highlights
4 Digital Innovators (Keynotes)
AI Showcase (10 walkabout case studies)
Digitizing the Patient Showcase (10-12 stations)
28 Educational, Case Study, and Technical Breakouts
24 Analytics Walkabout Projects
More Networking (Introducing “Brain Date”)
CME Accreditation For Clinicians
5-Star Grand America Hotel Experience
96 Total Presentations
National Keynotes
Employer
Innovation
Scott
Schreeve
CEO, Crossover Health
Payer
Innovation
Kevin
Sears
Exec. Director, Cleveland Clinic
Biosensor
Innovation
John
Rogers
Director, Northwestern Univ.
Pricing
innovation
Gene
Thompson
Director, Health City Cayman
Islands

19. © 2018
Health
Catalyst
Precision medicine has profound implications for patient care and clinical outcomes, and is already beginning to impact
everyday medical practice
Wednesday, May 9
1:00-2:00 PM EST
Learning Objectives:
• Identify obstacles that impede the implementation of precision medicine in clinical practice
• Contrast population-based medicine and precision medicine
• Demonstrate the real world benefits of precision medicine in today's healthcare setting
Realizing the Promise of Precision Medicine
19
ERIC JUST
SVP, Health Catalyst
Eric is a Senior Vice President for Product
Development at Health Catalyst. His team is
responsible for a broad portfolio of applications
including a patient registry platform, patient
safety decision support, and incorporating new
technologies like machine learning and natural
language processing.
DR. HALAMKA, MD, MS
CIO, Beth Israel Deaconess Medical Center
Dr. Halamka is a Professor of Medicine at
Harvard Medical School, Chairman of the New
England Healthcare Exchange Network
(NEHEN), co-Chair of the national HIT Standards
Committee, co-Chair of the Massachusetts HIT
Advisory Committee and a practicing Emergency
Physician..

20. Thank You!