GE Healthcare to Marry Industrial Internet with Workforce Management

GE Healthcare announced that it has agreed to acquire API Healthcare, a healthcare workforce management (WFM) software and analytics solutions provider. API Healthcare is not only a healthcare-specific vendor focused on WFM solutions, but also the architect of the Healthcare Workforce Information Exchange (HwIE)—a solution that facilitates the sharing of workforce data across the entire continuum of care. Founded in 1982, the company has been owned by private equity firm, Francisco Partners, since 2008.
The acquisition aligns with GE’s Industrial Internet strategy to invest in innovative businesses that enhance GE’s portfolio in software, data, and analytics. API Healthcare’s solutions—staffing and scheduling, patient classification, human resources (HR), talent management, payroll, time and attendance (T&A), business analytics, and staffing agency offerings—are used by more than 1,600 hospitals and staffing agencies in the U.S. Once the transaction closes, the API Healthcare solutions will be part of the Predictivity Industrial Internet portfolio alongside GE Healthcare’s existing Hospital Operations Management (HOM) offerings.
Knowing that API Healthcare has been up for sale for some time, the announcement is not a major surprise. Some might remember Kronos’ 2011 attempt to acquire API Healthcare, which was blocked by the Department of Justice (DoJ) due to antitrust issues (i.e., a near monopolistic situation in the healthcare WFM industry). The parties decided not to challenge the DoJ, and Kronos later acquired OptiLink. The acquisition by GE validates the importance of WFM as a critical component in addressing today’s healthcare challenges.
Improving operational efficiencies is critical for healthcare administrators today. While patients wait to be admitted and discharged, doctors wait for test results, hospital staff wait for assignments, and rooms and beds wait to be cleaned. Every hour wasted on waiting represents billions of dollars in costs to hospitals in aggregate each year. The workforce is both the delivery mechanism and the largest portion of operating expenses (labor costs represent more than 50 percent of hospital operating budget), making it a key element in achieving high-quality care at a reasonable cost.
With this acquisition, GE Healthcare hopes to be able to address a significant portion of hospital operations costs—assets, patients flow, and labor—with a mix of software, real-time data, analytics, and professional services. The API addition should enable better insight into staffing and scheduling to help ensure the right staff member is assigned the right patient at the right time.
Still, considering that GE is new to the WFM market, it will be interesting to see how API Healthcare will be absorbed into GE’s HOM portfolio. GE is aggressively becoming a services and IT company. As it has done with the Industrial Internet (a.k.a., the Internet of Things) in manufacturing, the company will move into the healthcare industry internet. One could imagine in the future doctors and nurses wearing Fitbit, smart watches, Google Glass, and other wearable devices, and be getting signals from medical devices about patients’ needs.
Thus, on the other hand, it will be interesting to watch how other healthcare WFM providers such as Kronos, McKesson, Infor, etc. approach the IoT. Perhaps there is a method in the madness of PTCrecently paying a hefty amount (about 20 times earnings) for ThingWorx.
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