Healthcare data platform Arcadia picked up CareJourney to build out its value-based care analytics capabilities.
The acquisition, announced late last week, brings together data engineering in Arcadia and data science in CareJourney, according to executives.
The deal combines Arcadia's data solutions, analytics and workflow tools with CareJourney's cost, quality and benchmark data to offer its customers a more comprehensive suite of value-based technology, executives said.
Arcadia works with payers and providers to provide data-driven insights based on customer-specific data to help drive adoption and success in value-based care arrangements. CareJourney, founded 10 years ago, derives analytics from Medicare, Medicaid, Medicare Advantage and commercial claims data across more than 300 million beneficiaries and over 2 million providers nationwide.
"We're applying data science on publicly available datasets. We are a large commercial researcher on the CMS datasets, and we use that access to determine who the best doctors are and to provide benchmarks on value-based care performance so that networks both see where they're excelling and also identify opportunities for improvement," Aneesh Chopra, president of CareJourney, said in an interview with Fierce Healthcare.
"Value-based care organizations sort of need to have both capabilities—they need to understand their performance in the market in context, using publicly available data, and they also need a support partner to operationalize all of the disparate data sets that flow through these networks. By putting these two pieces together, we're committed to actually making one in one equal three so that it becomes even easier for value-based care networks to stand up and thrive as more and more of the lives they manage are under risk," Chopra said.
Financial details of the acquisition were not disclosed. Both companies are profitable, according to executives. "We made this [decision] as a matter of choice, not necessity," Chopra said, noting that CareJourney has not accepted any venture capital funding since its founding in 2014.
Arcadia brought in more than $100 million in revenue in 2023, Michael Meucci, the company's president and CEO, noted, and the company is projecting strong growth.
Chopra, the former U.S. chief technology officer, has joined Arcadia as its chief strategy officer following the acquisition.
With the acquisition, Arcadia’s portfolio of provider, payer, government and life science customers totals nearly 200. The integration of the two companies' technologies helps drive Arcadia’s vision to build an interoperable data platform, executives said. Moving forward, CareJourney will become CareJourney by Arcadia.
With the integration of CareJourney, Arcadia will help healthcare organizations succeed in two ways, executives said. First, delivering an expanded breadth of data to fuel advanced analytics that help organizations shape their strategies and focus on critical priorities like navigating alternative payment models, market expansion and new partnership models. Second, the merger of the two companies provides a "fast, scalable and interoperable platform" with the operational tools required to act and execute opportunities to improve patient and financial outcomes.
Meucci says the deal marks the beginning of a "new chapter of growth" for the company's business, with plans to improve healthcare outcomes through data-driven insights and AI-driven tools and further expand its provider, payer and government sectors.
A year ago, in April 2023, Arcadia picked up $125 million in financing from Vista Credit Partners to accelerate platform innovation and growth in the healthcare data analytics market.
In December, the company sold its managed service organization and value-based care service division to Guidehealth, a value-based care enablement startup.
In February, Arcadia launched a new data platform powered by an open lakehouse architecture to enhance healthcare organizations’ abilities to harness big data.
Arcadia's customers include Southwestern Health Resources, Tandigm, Castell, Rush Health and Beth Israel Lahey Health.
For Arcadia customers, the acquisition will provide access to additional data sources for enhanced benchmarking, network performance modeling and evaluating growth strategies. For CareJourney customers, the integration will offer a robust healthcare data platform with enhanced speed, reliability and scalability as well as workflow tooling, company executives said.
"As our health system matures our approach to value-based care, I'm delighted to see two of our most trusted data platform partners coming together," Omar Lateef, M.D., president and CEO of Rush University System for Health and Rush University Medical Center, said in a statement. "We will benefit from their collaborative approach to understand how to grow responsibly and execute more precisely."
Arcadia and CareJourney have collaborated for years as business partners, Meucci said.
"From a mission perspective, we have both been beating the drum that value-based care transformation and value-based care adoption will be critical to the ultimate sustainability of our healthcare system. So, there was a lot of shared mission and vision alignment. Culturally, these two businesses are super aligned. We have the right degree of healthcare data nerds running around both of our shops," Meucci said in an interview about the acquisition. "As we were working on our commercial partnership, we realized, it would be great if we were one company. We'd be able to move faster together. Being able to simplify the way that we work together and deliver solutions sounded like the dream."
Both companies are benefiting from tailwinds related to ongoing advancements with healthcare data interoperability and the shift to value-based care.
On Jan. 17, the Centers for Medicare & Medicaid Services (CMS) issued the Interoperability and Prior Authorization Final Rule, which establishes requirements applicable to certain impacted payers which are intended to improve the electronic exchange of health information and prior authorization processes.
By Jan. 1, 2027, CMS is requiring that impacted payers implement and maintain a FHIR-based Provider Access API to share patient data with in-network providers with which the patient has a treatment relationship.
"By putting these pieces together, as a combined entity, we can move the industry faster towards this next phase of interoperability. We're seeing the network's come online, the launch of TEFCA for operations, the continuation of health plans moving forward with these examples, and putting those together is something that we intend to do with vigor," Chopra said.
CMS also has set a goal to achieve near-universal accountable care by 2030.
"We have five years to get there," Meucci said. "As you look at the transformation of the U.S. healthcare system and some of the value-based care headwinds, we thought this was just the right time to bring the businesses together to rally our respective customer cohorts to say, 'We can do this, we can meet this goal. Not only can we meet this goal, we can do it really successfully.' Everyone was excited about the idea of bringing together a scaled, profitable enterprise to deliver transformative data solutions."
Meucci pointed to several new products, including Arcadia Network Modeler, which is in beta testing, that combine the underlying CareJourney data and insights with Arcadia's workflow layer. "It's designed to help our customers take CareJourney's best-in-market provider performance and ratings indices and put it into a tool where an executive at a health system can identify how to organize their providers into cohorts to allow them to be as successful as possible in value-based care," he said.
CareJourney also recently launched Care Accelerator solution, a turnkey data model to effectively coordinate care and improve bottom lines.
"By merging CareJourney’s advanced data science with Arcadia’s data engineering and operational tools, we will equip providers and payers with the tools to manage costs, build high-performing networks, and excel in value-based care," Chopra said.