The first quarter of 2021 has been one of investor optimism as the vaccine rollout continues ahead of expectations and economic activity begins to accelerate in response. Within the Health IT industry, the already strong investment and M&A trends seen in 2020 have only accelerated. Over the course of the quarter, we observed $7 billion in private equity and venture capital investment across 158 companies.
By comparison, Q1 of 2020 saw $3.2 billion and 127 investments. Health IT M&A activity has also been strong in the first quarter, with 114 transactions observed compared to just 88 in Q1 of 2020. The gradual loosening of pandemic restrictions and government stimulus both promise to continue to fuel this strong market activity into Q2 and into the future.
Haven disbanded in February. The joint venture between Amazon, Berkshire Hathaway, and JP Morgan Chase was founded in 2018 to revolutionize how health insurance was managed and disrupt the healthcare industry. The three founding companies are expected to take lessons from the venture to continue to innovate individually and collaborate informally.
UnitedHealth’s OptumInsight agreed to acquire Change Healthcare for approximately $8 billion and to assume $5 billion of Change Healthcare debt. The combination is expected to help improve clinical decision support at the point of care, reduce administrative waste, and enable transactional connectivity across the healthcare system.
A coalition of Health and Technology Industry leaders announced the Vaccination Credential Initiative (VCI), in an effort to create a trustworthy, verifiable, and universally recognized digital record of vaccination status worldwide to safely enable people to return to work, school, events, and travel.
HHS Protect further solidified itself as the single source of truth for national COVID-19 patient information, hospitalization levels, hospital capacity, critical equipment supplies, and staffing. Alexis C. Madrigal, co-founder of the COVID Tracking Project, penned an enlightening op-ed in The Atlantic voicing strong support for the system emphasizing the improved quality and granularity of data available after the system was put in place.
The HHS announced a synthetic data challenge to further cultivate Synthea, an open-source synthetic patient generator that models the medical histories of synthetic patients. Synthetic patient data promises to facilitate patient-centered outcomes research by increasing the availability of data and complementing the use of real clinical data.
Amazon announced that Amazon Care will be rolled out nationwide over the summer and will open access for other employers to offer the service as a workplace benefit.
Noteworthy M&A transactions during the quarter include:
PatientPoint acquired Outcome Health to create a platform offering tech-enabled patient engagement solutions that create more effective doctor-patient interactions across the entire patient care journey.
MDLive announced it has entered into a definitive agreement to be