LeanTaaS Acquires IQ Hospital to Create $1B Healthcare Automation Company - MedCity News

LeanTaaSa Silicon Valley-based company that sells capacity optimization software to healthcare providers, on Tuesday completed the acquisition of the automation company Hospital IQ.

The companies did not disclose terms of the deal, but said the combined company is valued at more than $1 billion. The deal comes in six months Bain Capital provided LeanTaaS with growth capital and acquired a majority stake in the company.

The transaction creates the largest AI-based provider of hospital optimization software in the industry, LeanTaaS COO Sanjiv Agrawal said in an interview. He pointed out that now is a good time to bring together two major players in the efficiency software facing health systems strong financial pressure and struggles with a labor crisis.

LeanTaaS chose to acquire Hospital IQ because of how well the two companies’ products complement each other, Agrawal explained. Massachusetts-based Hospital IQ focuses on staff optimization solutions, while LeanTaaS is more focused on asset optimization — LeanTaaS sells capacity optimization software for operating rooms, infusion centers and inpatient beds.

“[Hospital IQ] brings an additional set of capabilities to optimize the workforce and personnel. So for a medical appointment to happen, both the asset and the staff must be available. If you think about optimizing both, it makes our joint solution even more powerful,” Agrawal said.

As hospitals across the country struggle with staffing levels, LeanTaaS knew it had to provide workforce optimization software. Instead of developing this software on its own, the company thought it would be a smarter choice to bring in Hospital IQ, Agrawal said. He compared the deal to Google’s acquisition of YouTube in 2006. At the time, Google had Google Video, but the company acknowledged that YouTube had a much more developed platform to invest in.

The newly combined company will benefit from Hospital IQ’s distribution partnerships, Agrawal added. In the past, LeanTaaS has used a direct sales force, but Hospital IQ has existing partnerships with various healthcare technology providers such as Oracle Cerner, Siemens Healthineers and Altera Digital Health (former part of All scripts).

The deal will allow LeanTaaS to accelerate its hiring plans and grow its customer base, Agrawal said. For example, LeanTaaS currently has about 150 health system customers and just won about 40 new health system customers from Hospital IQ, he said. Together, the combined company will also provide software to 600-700 hospitals, he added.

“There are approximately 1,200 economic buyers among health systems. We are now roughly approaching 20% ​​of the market. Reaching 30%, 40%, 50% or 60% of the market is a major goal. [Hospital IQ’s] channel tie-ups are direct tie-ups and will accelerate that,” Agrawal said.

Both LeanTaaS and Hospital IQ share the vision that hospitals are in dire need of analytics software to optimize their assets and workforce, Agrawal said. He pointed out that when it comes to AI in healthcare, much of the attention is focused on clinical AI. While solutions focused on improving cancer treatment and diagnostic accuracy are undoubtedly important, he argues that AI focused on hospital operations also deserves close attention.

Agrawal believes that optimization software plays a critical role in solving some of healthcare’s biggest problems. For example, healthcare workers are leaving in droves, so hospitals need technology to make the best use of the staff they have. Patients often wait months to see specialists, and optimization software can reduce that wait time. That’s why the new combined company’s mission is to bring optimization technology to more providers across the country, he said.

Photo: nespix, Getty Images

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