Specialist
Former VP at Health Catalyst Inc
Agenda
- Deep dive into Health Catalyst's core population health management solutions portfolio and value proposition
- Operational headwinds in commercial selling environment
- Relative end market opportunities and rationale behind shutting down Life Sciences segment
- Industry consolidation trends and viability as a takeout target
- Regulatory challenges, potential margin expansion opportunities and 2023 growth outlook
Questions
1.
What are some of the most important trends and drivers you’ve been following in the broader healthcare analytics and population health management space over the past year or so that might better inform our discussion today on Health Catalyst?
2.
For those newer to the name, could you outline Health Catalyst’s software solutions portfolio, value proposition and relative differentiation in the marketplace?
3.
A survey from KLAS Research indicated a split in the marketplace for IT spending priorities to address margin headwinds. More specifically, the survey found that 35% of providers plan to increase IT spend over the next 12 months to address profitability pressures, while 30% plan to scale back spending to conserve cash. With those metrics in mind, what’s your updated perspective on the provider/health system purchasing environment for Health Catalyst’s software solutions portfolio in light of those two competing dynamics?
4.
What are the glaring operational pain points facing customers right now that can be alleviated per Health Catalyst’s solutions suite?
5.
What are the main KPIs used to measure provider success for Health Catalyst?
6.
How does Health Catalyst compare vs competing offerings on the market in metrics such as analytics lifecycles, data quality and cost savings?
7.
What are your thoughts on Health Catalyst’s incremental upsell opportunity across its existing customer base? Integris Health, Oklahoma’s largest not-for-profit health system, announced an expansion of its contract with the company in February 2023. Could you quantify the low-hanging fruit and additional runway via upsell?
8.
What’s your assessment of Health Catalyst’s sales force and commercial strategy? To what extent can the company’s reps leverage the success of clients such as Integris as proof of concept for the efficacy of its solutions?
9.
How much of a material issue has contract stickiness been for Health Catalyst? What are the major factors driving any attrition?
10.
How does stickiness for Health Catalyst trend across client types? Is it correct to assume that larger enterprises will be stickier than smaller modular tech customers?
11.
How could increasing consolidation on the provider and health system side impact pricing and/or negotiation leverage for Health Catalyst? What kind of pricing pressure could we see from this trend over the next few years?
12.
What’s the risk of the EMR [electronic medical record] vendors encroaching on Health Catalyst’s market by building out adjacent population health solutions or data analytics offerings? From my understanding, a vendor such as Epic benefits from the aforementioned consolidation on the health systems side and then build out these adjacent services at little or no additional cost to existing customers.
13.
What do you believe was the rationale behind Health Catalyst winding down its Life Sciences segment in 2022? What are the benefits and drawbacks of the foregone growth opportunity in Life Sciences vs a strategic refocus on profitability?
14.
How would you rate Health Catalyst’s integration efforts for past acquisitions, such as Armus, Twistle, Able Health and Healthfinch? What’s been the company’s desired level of integration and the greater strategy behind meshing together tuck-ins to create a comprehensive suite of solutions?
15.
Health Catalyst ended Q4 2022 with around USD 360m on its balance sheet. How might the company deploy this capital to grow the business inorganically in 2023? What attractive adjacencies might make strategic sense for a tuck-in acquisition in light of our comments about a return to profitability?
16.
What are your thoughts on Health Catalyst’s scaling strategy to efficiently grow the business? What do you see as the major pain points to scalability, whether from competitive threats, upgrading tech assets, sales force, etc?
17.
Relative to 2022, Health Catalyst management expects low-double-digit net-new DOS [data operating system] enterprise additions and a net revenue retention range of 102-110%. How realistic are these projections? What factors will most markedly contribute to the company’s ability to meet these benchmarks?
18.
Do you think Health Catalyst could be an acquisition target given its attractive tech stack and compressed stock price over the past 1.5 years? If so, who might be a likely strategic buyer, and why?
19.
What developments are you monitoring from CMS [Centers for Medicare and Medicaid Services] and/or the 21st Century Cures Act around evolving data interoperability and privacy standards? How might these affect the operating environment that Health Catalyst plays in?
