A health IT partnership like no other
Ross Gustafson has two vice president titles, one at Minneapolis-based Allina Health, where he oversees the Allina Performance Resources unit, the other at data warehousing and analytics company Health Catalyst in Salt Lake City. Allina and Health Catalyst announced Jan. 6, an unprecedented partnership between a health system and a vendor – a $100 million deal over 10 years with shared risks. Roughly, Health Catalyst earns $2 million per year if it's able to deliver savings that both Allina and Health Catalyst agree are actual savings to the bottom line for Allina.
While we were at HIMSS15, we caught up with Gustafson on the 100th day of the partnership. He handed us two business cards – one from Allina, the other from Health Catalyst. Gustafson oversees about 60 people at Allina who are Health Catalyst employees and another 30 staffers who are Allina employees.
We talked with him about the unique arrangement, how it's going so far, and his expectations for the future.
Q: How did the partnership come about?
A: From the Allina point of view, we were looking for a partner to help us along in our analytic journey. We had history with Health Catalyst to begin with. They installed our first platform. (Allina was Health Catalyst's first client in 2008).
Allina over the course of the last seven to eight years was really furthering its platform, its analytic tools, its visualization, its reporting and really trying to embed that then into workflows and clinical outcomes. We were moving along, we we're doing a good job, but could see going forward this is not cheap stuff that we're talking about. We could see that among all the other capital outlays and expenses that a hospital is dealing with, it's tough to contribute X-million dollars a year, year over year, to making sure that this infrastructure is set up in such a way that it's not just maintaining, but it is actually exceling the vision and the mission of the organization.
[See also: Allina goes all in for outcomes with Health Catalyst.]
Q: Aren't you still paying for it?
A: Where we are gaining from it – in time – is the Catalyst platform. Again, we are on day 100, so we haven't moved from our old Catalyst platform to the new Catalyst platform, which I think is a 2.6 version.
Q. And yours is?
A. Somewhere in the range of .5. I don't know if it officially even has a name. I mean it literally is the first client. Through the partnership, Allina gets access to the full Catalyst suite of services – so all of the latest and greatest platform as well as all the tools and apps that they have outfitted. We will be upgrading that. We can already see as we've been going through the project planning of how we're going to be doing that.
Q: Sounds complicated
A: I'm sticking to the Gantt chart of the calendar with little dots and milestones, but not getting into the weeds, but recognizing that each milestone has several sub bullet points. It's already very evident that the new technology produces such an efficiency over what we're currently doing. The technology is better, and it's not just faster and cheaper. They've been able to continue to fine-tune it. That's been what their strength is. That's what their passion is. Allina's is in delivering care.
"The technology is better, and it's not just faster and cheaper. They've been able to continue to fine-tune it. That's been what their strength is. That's what their passion is."
Q: It's early in the partnership, but have you reaped some benefits yet?
A: As we start to bring those in, we're going to better leverage the 55 employees that are over than what we would have on the Allina side. We get the full access to all of the IP that Catalyst has. That's part of the contract.
Q: So, going forward whenever there is a new version of the Health Catalyst platform, you'll get it?
A: Whenever 2.7 becomes available, or 2.6a or whatever the versioning is – absolutely. We're taking a look at all the intellectual property that Allina has and all the IP and tools that Catalyst has to find out where there are matches – which ones are we're just going to keep and just continue to use. Which ones did we not have that Catalyst has that we want to fill. Which ones do we want to create together. A value-add on the Catalyst side is that in Allina, it has a delivery system to build and use these things in and test in a living lab.
For Allina, it is being able to have a platform, figuratively speaking, to be able to be elevated in the national spotlight with some of these conversations. Certainly there's been national press about Allina. We're not a small health system. We're not the largest health system. But, we want to be known as the highest quality, most efficient health systems, and we think that gives us the vehicle to try to achieve that with our patient outcomes.
[See also: Eyeing IPO, Health Catalyst lands $70M.]
Q: What's been the hardest to do?
A: I'll give you two. One, it's just a very different kind of relationship that a vendor and a delivery system have, especially when you're talking about putting dollars at risk in it and the vendor trying to be all in and support the organization kind of whole-hog, if you will. It has been challenging, internally within Allina, I think to wrap their heads around that. That's my opinion. Allina works with a lot of vendors. Of course, every vendor is our partner. This is not "how many widgets can I get you to buy from me, and I want my widget price the highest and you want a price the lowest, and we'll negotiate and land on something, and we'll call that partnership." This is very much, "What is it, Allina, you want to do. You want to work on improving your patient falls. OK, we have a data mark that works on that. Are you interested in implementing it? Do you feel you're so unique that we have to build it for you specially? How does that work because we're going to judge whether this is successful or not on did we hit your goal of decreasing patient falls."
Two, one challenge we have is we've got Allina, which is a company of 26,000 employees, not-for-profit, moves just slightly slower than the Titanic, just like most other large health systems in the country. And, we have a 300-employee, fast-growing, venture-backed organization that is, "Oh, you want to do that, OK we'll do that, should we do that now, should we start it now?" Here (at Allina) we have to run it through three committees and then I'll get back to you, and you need to fill out these four forms so that these committees can review it. It's just in general such a different culture. It's a skill set, it's a competency that I feel all nonprofit healthcare can probably be a little better at. But certainly, within Allina, it's lighting fires under our group to say, well we can do it, and we can do it as early as tomorrow. But, it requires us to think a little outside the box.
Q: It looks like the deal is very much focused on outcomes.
A: Health Catalyst is an outcomes improvement company. It just so happens that their core competency is around data management, or data warehousing and analytics and things of that nature. But, you know, a number is just a number until you can interpret it and actually do something with it to keep someone out of the hospital, keep someone's diabetes in control, keep someone's weight management under control or whatever it may be. Until then, it's just a big bite of information, which is fine, but not the space we want to move in. We want to move in an outcomes-based oriented company.