Credit Suisse https://www.credit-suisse.com has published thoughts on the OSH/RubiconMD transaction. OSH (Not Covered) acquired RubiconMD for $130M in cash, with the sellers having an opportunity to earn up to another $60M dependent on performance milestones, including low integration costs.
OSH’s announcement comes during a period in which many Digital Health/HCIT companies have made strategic M&A a priority. With digital connectivity becoming the main highway for care pathways, several companies/industries need a different level of scalability, reliability, and comprehensiveness.
The digital health solutions landscape is highly fragmented, and the continuing consolidation should enable digital health vendors to obtain the scale and efficiencies required to succeed in the emerging healthcare paradigm. Credit Suisse’s note contains a detailed overview since analysts included a list of M&A transactions across the HCIT/Digital Health space with financial/valuations details available.
OSH will use their tech platform to ensure referrals go to preferred specialty providers to stay coordinated on patient care with those specialists (40% of specialty visits are entirely avoidable, according to the company).
In addition, OSH noted there is a high degree of variation in specialty practice patterns by market, which makes care dependent on the existing level of access and quality within that market.
As a result, by owning a virtual specialist network, OSH will be able to scale their care model regardless of location through RubiconMD’s technology platform and national footprint to improve access, experience, and coordination for patients, while substantially lowering costs, including leveraging specialist insights and data.
Further by having a convenient and comprehensive offering under one roof, OSH anticipates saving 1.5% (10% reduction in specialist medical cost which represents ~15% of overall medical claims expense) on medical savings with the impact beginning in 2H22 and more fully realized in 2023, which will be incremental to the company’s LT margin target.
RubiconMD is the leading technology platform that provides access to a specialist network of over 230 specialists, which covers all major specialties, including Cardiology, Nephrology, and Pulmonology.
RubiconMD provides clinical insights from specialists on specific patient cases, enabling primary care providers to directly manage and coordinate more of a patient’s care needs. The platform enables primary care clinicians to easily discuss their e-Consults with top specialists via email and text (response within 12 hours, with the average closer to three hours), so they can provide better care, improve the patient experience, and reduce costs.
RubiconMD has built an elite network of specialists who have trained and worked in leading programs across the country with an average e-Consult rating of 4.9 out of 5 as rated by the PCP. The company currently partners with the leading value-based primary care organizations, direct primary care practices, community health systems, employer onsite clinics, correctional health services etc.
For details in the Note, The Consolidation Wave-A Continuing Trend in Digital Health/HCIT Space, to ask questions, and/or provide feedback, or news, email Jailendra Singh at jailendra.singh@credit-suisse.com or call 212-325-8121.