In what Health Catalyst CEO Dan Burton calls a groundbreaking deal, Minneapolis-based health system Allina Health – Health Catalyst's first client – will invest $100 million in the data warehousing company.

Allina has also committed to work with the Salt Lake City-based data warehousing company on a 10-year initiative to build a new model for improving outcomes system-wide.

The deal combines the two organizations' analytics technology, clinical content and personnel to "turbocharge" financial, operational and clinical outcomes improvement via "living laboratory" for healthcare transformation," Burton said.

The end goal is to improve the quality and lower the cost of care for Allina's patients and to provide a model for outcomes improvement across the country.

The 10-year agreement marks the culmination of a relationship that began in 2008, when Allina Health became Health Catalyst's first customer.

"This agreement with Health Catalyst is unique in the industry and will accelerate outcomes improvement for those served through Allina Health as well as create a roadmap for broader outcomes transformation both here and across the country," said Penny Wheeler, MD, president and CEO of Allina Health, said in announcing the deal. "We have made significant progress with care outcomes improvement over the last six years, and we now believe we can take our efforts to the next level by leveraging the experience and know-how of both organizations and our shared history of innovation and transformation."

Burton told Healthcare IT News that Wheeler, who was just named CEO last year, has been a real champion for outcomes improvement using data analytics.

"By 2010, Allina had such an appetite, had really committed to use this platform to significantly drive change," Burton said. "Frankly, that appetite outstripped Health Catalyst's bandwidth. Allina bought everything we built, and they still had a really long list of stuff they wanted to keep doing."

"I don't think they fully realized how innovative they were nationally." Burton added that Health Catalyst has the good fortune of working with some of the most innovative health systems in the country  – Kaiser Permanente and Partners HealthCare among them. In his opinion Allina is the most innovative with its data-driven approach to improving outcomes, he said.

[See also: Health Catalyst growth finds its niche.]

Allina Health is a $3.7 billion not-for-profit organization whose more than 90 clinics, 12 hospitals and related healthcare services provide care for nearly 1 million people across Minnesota and western Wisconsin.

The agreement between Allina Health and Health Catalyst includes two major elements:

• Allina Health will outsource its data warehousing, analytics and performance improvement technology, content, and personnel to Health Catalyst to further accelerate the health system's significant advances in improving care. The Allina employees currently working in these areas will become onsite Health Catalyst team members in phases beginning this month.
• Allina will gain access to Health Catalyst's full technology, content and deployment expertise to accelerate outcomes improvement at Allina. The partnership's governing committee will annually identify a prioritized list of improvement projects, each designed to provide measurable care improvement and financial value to Allina, and as success is realized, the partnership will share in the economic benefits of that success

"As payment models continue to transition away from fee-for-service, it becomes increasingly vital for health systems to deeply understand their data in order to pinpoint inefficiencies and then reduce those inefficiencies," said Duncan Gallagher, CFO of Allina Health, in a statement. "This partnership is designed to accomplish that goal in a measurable, scalable, repeatable manner."

Each year, the committee governing the partnership will agree to a prioritized list of data-driven improvement projects with specific, measurable outcomes goals for each project. Economic rewards will be based on the attainment of these goals.

[See also: Data demand fuels Health Catalyst growth.]

"We expect that this process of using analytics to prioritize projects, in combination with risk-sharing economics, will encourage far more focus and alignment than is found in traditional health system-vendor relationships," said Gallagher.

"Allina Health was one of the first healthcare organizations in the nation to recognize the need for a data-driven culture and infrastructure to enable outcomes improvement," Burton said. "They recognized that transformational quality improvement requires more than great software – you also need content-based best practices to ensure the interventions you select are actionable and relevant; and you need people who know how to make the interventions work."