U.S. conglomerate 3M announced it has signed a definitive agreement to acquire M*Modal’s technology business for $1 billion, thereby boosting its strategic focus of investing in the health information systems business.
The exact price of the acquisition was not disclosed; the $1 billion is only being described as an “enterprise value” and does not reflect the actual purchase price. 3M did not say why it chose to use the enterprise value instead of the purchase price.
M*Modal’s technology business is estimated to have annual revenue of about $200 million.
3M Health Care Business Group Executive Vice President Mike Vale said the “acquisition builds on our strategic commitment to invest in our Health Information Systems business and expands the capabilities of our revenue cycle management and population health priority growth platform.”
M*Modal is a healthcare technology provider of cloud-based, conversational Artificial Intelligence (AI)-powered systems that help physicians efficiently capture and improve the patient narrative so they can spend more time with their patients and provide higher quality of care. M*Modal’s software is used to record doctors’ conversations with patients and add pertinent information to patient medical records.
With the deal, M*Modal’s AI systems will be integrated with 3M’s health information systems unit, which works with more than 8,000 health care organizations worldwide.
3M will continue a strategic business relationship with M*Modal’s remaining transcription, scribing and coding services business, which is not part of this transaction, to help ensure continuity and strong customer support. 3M and M*Modal have been technology partners since 2013.
“Together, we will enable doctors to improve the patient experience, while enhancing documentation accuracy and operational efficiency for both providers and payers,” Vale said.
M*Modal’s president, Michael Finke, said the deal will “further accelerate our mission of creating time to care for more clients with the resources and global reach of 3M. By combining capabilities, we can more quickly deliver on our mission of bringing conversational AI and ambient intelligence directly into clinical workflows. This is a great outcome for our clients, partners and team.”
3M plans to use M*Modal’s cloud-based, conversational AI technology in areas like population health, where it already is active, it was reported.
As part of the deal, which is expected to be finalized in the first half of 2019 subject to regulatory approval, 3M will take over 750 employees from M*Modal’s technology business.
3M’s acquisition of M*Modal’s technology business is part of a trend among big companies who are seeking to invest in speech recognition technology firms. Business Insider pointed out that Google and Amazon invested in Aiva Health in 2018, a voice-powered healthcare assistant for seniors; in May 2018, it was reported that Amazon was building a health and wellness team within its Alexa division.
One section of Google’s parent company, Alphabet’s Verily Life Sciences, has reportedly been working with Stanford Medical to assess AI and voice recognition in generating electronic health records (EHRs).
Other players include Epic and Nuance Communications, which teamed up in September to leverage voice assistance technology in EHRs. Using technology compatible with Epic apps, doctors will be able to retrieve schedules, look up patient information as well as check lab results and medication lists, the Healthcare Dive website reported.
In other news, in October 2018 it was announced that the AI-driven voice assistant, Suki, was processing more than 1,000 patient interactions per week. It was further announced that physicians piloting this service had reduced the amount of time spent on medical notes by 70 percent.
The year 2018 also marked an increase in the value of mergers and acquisitions in the digital health sector. Business Insider reported that there were a record-breaking 54 digital health acquisitions and mergers in the U.S. in 2018.
According to a report released in September 2008, just under two thirds of healthcare providers use speech recognition technology, while 14 percent said they had plans to adopt it. However, nearly a quarter said speech recognition is not on their radar.
Of those who did not use speech recognition technology, 16 percent said their physicians prefer to input by hand in the EHR, while others raised accuracy concerns. Ironically, advocates of speech recognition technology say voice has the capability of reducing inefficiencies in note-taking.