Kaufman Hall has acquired Change Healthcare's Connected Analytics business in a move that combines software solutions for the company's 3,000 healthcare, higher education and financial institutions.
The Connected Analytics business adds more than 300 healthcare clients, including many large hospitals and health systems in the U.S., according to Kaufman Hall, which is owned by private equity firm Madison Dearborn Partners. Change's Hadley, Massachusetts, office will join Kaufman Hall's locations in Chicago, Los Angeles, Portland, Oregon, and Fort Collins, Colorado, to serve more than 800 healthcare clients across the country.
The data and analytics platform serves health-system finance professionals by offering long-range planning, budgeting and forecasting, performance reporting, capital planning and cost accounting solutions.
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WHY THIS MATTERS
Hospitals and health systems financially damaged by COVID-19 need recovery solutions, Kaufman Hall said.
March revenues fell 13% compared to the same period last year, according to the company's April flash report. This represented a 13% drop in what was budgeted for inpatient revenue and a 17% decrease for budgeted outpatient revenue.
Hospitals' median operating EBITDA margins fell more than 100% in March.
Expenses increased, as did bad debt and charity, at a time when the median occupancy rate was 53% in March, down from 65% in March 2019.
THE LARGER TREND
In a 2020 Healthcare Financial Outlook: Performance Management Trends and Priorities report based on a survey done in September and October 2019, before the COVID-19 pandemic, 76% of financial executives said they were not confident in their team's ability to quickly adjust strategies if business circumstances changed suddenly.
Only 14% of respondents said they were "very prepared" to use clinical measures to impact financial results.
About half said they were using rolling forecasts as a complement to the annual budgeting process, up from 38% in 2019.
ON THE RECORD
"This acquisition comes at a pivotal time for our clients, as the nation experiences rapid change and uncertainty," said Wes Champion, managing director and chief executive officer of Kaufman Hall. "Now more than ever, clients need reliable and actionable data and insights to help execute what's needed today and model the future."
"Following a thoughtful and thorough search, we believe Kaufman Hall is the right partner for our employees and customers," said Neil de Crescenzo, president and Chief Executive Officer, Change Healthcare. "We remain committed to our Connected Analytics business customers and will work closely with Kaufman Hall to provide a seamless and uninterrupted transition."
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