Nov 12, 2019

Karify’s acquisition suggests integration of e-health and EHR could become a trend

Dutch digital mental health provider Karify was acquired by an electronic health records (EHR) software provider, Avinty, last month. The move could mark the beginning of a trend in the integration of EHR and patient-facing digital services in Europe. We speak to both parties about the deal.

“This deal allows us to expand our business quite rapidly,” says Joris Moolenaar, CEO of Karify. “We will triple or grow fourfold in the next three years and we are already operating a positive EBITDA. We see an uptake for digital health services all across the Avinty brand, so there’s a lot of demand from providers who are looking for better digital services.”

Avinty is a holding company for five different subsidiaries providing EHR software for hospitals, rehabilitation services, youth care, disability care and geriatric care. Karify is the first addition to this portfolio which offers patient-facing solutions, and Avinty CEO Onno Verstegen tells HBI he plans to extend Karify’s services to all of its business segments.

“We have a huge market share in the EHR space – from 30% in mental health to 60-70% in rehabilitation and 70-80% in youth care,” says Verstegen. “This is the platform on which we can expand Karify.”

Avinty is currently operating a buy-and-build strategy and planning to expand further into markets where EHR is present. Verstegen tells us the deal with Karify presents particularly attractive synergies for the company.

“It’s interesting to combine e-health with EHR, but only if these two systems are integrated does it really pay off. That’s what we plan to do with Karify.

“Integration gives providers a lower administrative burden – data entries can be done by the patient and processed immediately into the EHR. By diminishing administrative labour, more time can be spent on the patient.”

According to Moolenaar, big EHR companies in the States are already adding more patient-facing services to their portfolio. Could the trend start making waves across the pond?

“As EHR companies are cash-rich they are in a unique position to grow through buy and build. It’s a logical trend to scoop up companies that have proven business models and positive revenue and integrate them to a large customer base for market position and growth.

“Healthcare tech conglomerate Philips bought some companies for their EHR platform. So maybe this is the start of more acquisitions in this space, as more e-health companies have proven themselves.”

Avinty sees a number of challenges ahead for the EHR market. The company is currently busy preparing for new regulation to be introduced on January 1, 2020, which will outline technicalities around patients with psychiatric conditions that are required to be treated in a facility.

“I see lots of new regulation which we will need to incorporate in the next few years, as well as lots of demand to innovate,” says Verstegen. “But the market for EHR is still growing around 20-30%.

“The real challenge is in making it easier for providers to innovate, as they are tied to tight budgets” he adds. “Our model is to build a platform for innovation via our systems, so we can share the cost of innovation with them.”

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