Health Care Dataworks (HCD), an analytics vendor that has struggled to gain traction, was acquired today by Health Catalyst. Had a quick call this afternoon with Health Catalyst CEO, Dan Burton to get the skinny on this deal, here is what I learned.

There were three primary motivators for acquiring HCD.

1) Landed five health system customers, including a couple of big ones in MemorialCare and Cedars-Sinai. Combined, these five systems represent 18 new hospitals and 112 clinics or nearly a 10% uptick to Health Catalyst existing base.

2) HCD has a well-seasoned team of healthcare analytics specialists that will now become employees of Health Catalyst. Today, it is very difficult to find let alone hire such expertise. This will accelerate Health Catalyst’s ability to serve its growing customer base. Health Catalyst will also keep the doors open in Columbus, OH, where HCD is based, giving them another toe-hold outside of their home offices in Salt Lake City.

3) The structure of the deal fits Health Catalyst’s model. In exchange for cash and stock in Health Catalyst previous healthcare investors in HCD, MemorialCare and Cedars-Sinai, will now have an interest in Health Catalyst. Cedars-Sinai and MemorialCare now join Allina Health, Kaiser-Permanente & Partners who all have an ownership stake in Health Catalyst.

Unlike most acquisitions of technology-based companies, this deal had little to do with HCD’s technology itself. Health Catalyst may incorporate a few, non-core features that HCD developed (BI tools, dashboards, some algorithms) but the core HCD platform will be retired and replaced by Health Catalyst.

This deal will not shake up the healthcare analytics market in any significant fashion. HCD was already on its last legs and the acquisition was more of a rescue of HCD’s customers/investors who will all now migrate to the Health Catalyst platform
. Granted, Health Catalyst has gained some needed personnel resources and some great customers but lets be honest here – it’s a lifeline throw.