Health tech company Datavant is continuing its acquisition spree with plans to buy Israeli startup DigitalOwl, an artificial-intelligence-powered platform for insurance and legal professionals.
With the acquisition, Datavant will expand its capabilities and support a new digital-first offering that improves medical records retrieval and analysis for the insurance and legal industries.
Financial terms of the deal were not disclosed. Ctech reported that market estimates put the acquisition price at $200 million.
The DigitalOwl deal comes on the heels of two other acquisitions in the past three months. In August, Datavant closed its acquisition of Ontellus, a records retrieval company. This summer, the company also picked up real-world evidence platform Aetion. That deal closed in July.
Datavant plans to integrate DigitalOwl’s proprietary technology with Ontellus’ health records retrieval and claims intelligence capabilities to offer an end-to-end data collaboration platform. The platform will include managed retrieval, automated summaries, chronology and de-duplication, and AI-enabled predictive analytics.
The current process for medical record reviews can be time-consuming and error-prone. This can delay case resolutions for legal clients and claim approvals for insurance members while driving up costs, according to the company.
"The insurance and legal market is poised for transformation, with customers looking for solutions that can simplify and improve the process of accessing and analyzing health data," Kyle Armbrester, CEO of Datavant, told Fierce Healthcare via email.
"DigitalOwl stood out because it was purpose-built for the legal and insurance markets by experts who deeply understand those use cases. Their proprietary AI platform transforms unstructured medical records into structured insights with industry-leading accuracy," he said.
The DigitalOwl acquisition builds on the Ontellus deal and fills a critical gap by turning raw medical records into structured insights for the legal and insurance markets, Armbrester said.
"It allows us to integrate DigitalOwl’s and Ontellus’ capabilities to set a new standard for health record retrieval and data analysis across the legal and insurance industries," he noted.
As part of that integration, DigitalOwl’s AI engine will be incorporated into Datavant’s broader platform, beginning with Ontellus’ medical records retrieval and claims intelligence services. The company's technology automates what was once a heavily manual process for organizing, summarizing and extracting key information from records, Armbrester said.
For legal and insurance professionals, the combined offering means a faster, smarter and more reliable medical record retrieval and review process, Armbrester said.
"Instead of sifting through lengthy, unstructured documents, stakeholders will receive streamlined summaries tailored to their needs. This reduces manual effort, speeds up decision-making and ensures critical insights are surfaced quickly," he said.
"We're not only reducing administrative burden but also enabling underwriters, claims professionals and attorneys to focus on higher-value decision-making," he added.
The company plans to extend these data extraction and AI capabilities beyond legal and insurance into the payer, provider and life sciences markets, he noted.
Datavant offers a data exchange network that connects more than 80,000 hospitals and clinics, 75% of the 100 largest health systems and more than 350 real-world data partners. The company's platform enables more than 60 million healthcare records to move between thousands of organizations.
In 2021, Datavant merged with clinical data network Ciox Health in a deal valued at $7 billion, creating one of the largest health data platforms that enables patients, providers, payers, health data analytics companies, patient-facing applications, government agencies and life science companies to exchange patient-level data. It connects data sets across electronic health records, claims, specialty pharmacy, registries, imaging, labs and social determinants of health.
The company sees big opportunities to expand the application of AI to health data to make them more actionable.
"We are investing heavily in technology R&D to bring structure to unstructured data, using privacy-aware strategies to securely connect and share data across thousands of sources, and building applications on top of that data to solve some of healthcare’s toughest problems," Armbrester said.
He called the combination of Datavant, Ontellus and DigitalOwl a "force multiplier" that positions the company to deliver faster, smarter and more actionable insights for legal and insurance customers. It also lays the foundation for innovation across other healthcare markets, he noted.