Moxe Health, a Madison, WI-based startup whose digital tools help facilitate the flow of data between healthcare providers, insurers, and software applications, says it has raised $5.5 million from investors.
Safeguard Scientifics (NYSE: [[ticker:SFE]]), based in the Philadelphia area, led the round. Dan Wilson, Moxe’s founder and CEO, declined to name other funds or individual investors who participated, or comment on the valuation his company received as part of the Series A financing round.
Wilson says that some of the money will likely go toward adding staff. Currently, Moxe has about 10 employees, he says.
“We’ll probably double in size through the next year,” he says, adding that the startup plans to expand its sales, engineering, and product management teams.
The software that Moxe develops, installs, and supports fits into the category of healthcare data integration, or interoperability. These terms can refer to a variety of scenarios. The one that’s probably cited most frequently, due to the burden it can place on patients, involves the transfer of data between healthcare systems that do not use the same software for managing patient records.
Moxe’s focus is not on brokering connections between hospitals, Wilson says; instead, the company works with payers and healthcare systems so that they can exchange information. Part of the reason they want to do this involves the move away from historical fee-for-service revenue models in healthcare, and toward value-based care.
One model that gained traction recently is the accountable care organization. The way it works is that a group of providers works together to manage the care of Medicare patients, with cost savings shared across the organization. Some insiders have said that the proliferation of value-based care frameworks is likely to shift risk from insurers to providers. This would seem to create a market opportunity for companies like Moxe, which helps providers get data—clinical, claims, risk, and other types—to and from payers.
In addition to insurers and healthcare systems, Moxe also sells to fellow healthcare software businesses. Most hospitals and clinics in the U.S. have digitized their patient records, and many of them use software from a group of leading vendors that includes Allscripts (NASDAQ: [[ticker:MDRX]]), Athenahealth (NASDAQ: [[ticker:ATHN]]), Cerner (NASDAQ: [[ticker:CERN]]), Epic Systems, and McKesson (NYSE: [[ticker:MCK]]).
Graham Grieve says that some of these large, enterprise-wide vendors will likely continue to control a large share of the market when it comes to database management and other back-end services. And Grieve, a healthcare data interoperability consultant who is helping to create a new standard for exchanging information electronically, says he expects a consolidation of competitors on the back end to run parallel with “extreme variation” on the front end—which encompasses user experience, or the things users can see and interact with.
Asked about Grieve’s predictions, Wilson says they make some sense to him.
“It’s definitely a trend that’s played out in other industries,” he says. “Look at technology more broadly, and all the applications that exist for different enterprise businesses. You have QuickBooks [for accounting], you have an application for logging time, and these things all fit together. You don’t have to use SAP (NYSE: [[ticker:SAP]]) now at the small end because there are all of these other things.”
In healthcare, this may take the form of clinicians using software programs specific to their specialties, Wilson says. An ophthalmologist, for instance, could document notes and other information on her patients, and then have the data sync with her organization’s enterprise health records system.
“[Grieve’s] prediction of free data flow between systems is true,” Wilson says. “That opens up this opportunity.”
Now Moxe will try to seize on that opportunity, with a bit of cash in hand.
