ECRI, a nonprofit healthcare quality and safety organization, spun out its spend management and recall management solutions an independent company backed by a strategic growth investment from Accel-KKR.
The new company, called Staritas, will focus on providing healthcare supply chain intelligence supported by the technology-focused private equity, the company announced Tuesday. Accel-KKR specializes in software and tech-enabled businesses.
As a separate company, Staritas will focus on the development and delivery of artificial intelligence-driven solutions to enable healthcare organizations to manage the growing complexity of supply chains, executives said in a press release.
ECRI, which has been operating for 60 years, is now focused exclusively on creating resilient and safe healthcare systems and assessing technologies used in those systems, the nonprofit's executives said.
Financial terms of the PE investment were not disclosed.
"For five decades, ECRI's award-winning Spend Management solutions have helped healthcare supply chain leaders navigate supply disruptions with resiliency, save millions of dollars, and benchmark purchasing decisions using the industry's most comprehensive, independent datasets," said Marcus Schabacker, CEO, M.D., president of ECRI, in a statement. "Now, by spinning out Staritas, powered by Accel-KKR to supercharge the power behind the data, improve the user experience, and accelerate innovation, healthcare supply chain leaders can realize even greater value from the platform."
Healthcare organizations currently face rising costs, margin pressure, supply chain disruptions and increasing complexity, often making decisions with fragmented information, such as supplier pricing without benchmarks, or investments without a clear view of total cost, according to ECRI executives.
Staritas claims to have the largest independent source of healthcare supply and capital datasets, with advanced analytics, and says it works with organizations in more than 70 countries to understand market trends and better manage their supply chains. As a division of ECRI for five decades and now as a standalone company, Staritas says it works with 90% of the top U.S. hospitals and health systems to identify $13 billion annually in opportunity savings.
"We are excited to partner with ECRI and support the launch of Staritas, a new company with a 50- year track record of pioneering work in spend and recall management," said Park Durrett, managing director at Accel-KKR in a statement. "Staritas's unmatched independent datasets and domain expertise create a strong foundation for growth and customer impact. We're proud to build on Staritas's legacy and remain committed to the transparency, independence, and objectivity that define its work."
Additional investments from Accel-KKR will be used to enhance platform capabilities, executives said in the press release.
"The data, solutions and people that now make up Staritas are among the best in the field of spend and recall management. We plan to continuously raise the bar in serving healthcare supply chain leaders with next-generation platform and technology advancements that help to protect margins, deliver quality care and boost resiliency," Emmet O'Gara, CEO of Staritas, said.
ECRI, an independent, nonprofit organization focused on healthcare safety, quality and cost-effectiveness, plans to sharpen its focus on patient safety and clinical evidence.
"This move is not a departure, it is a commitment to deepening ECRI's focus on patient safety, clinical evidence, and system-level change across healthcare," Schabacker said. "ECRI's services and solutions are now focused exclusively on creating resilient and safe healthcare systems and assessing technologies used in those systems – backed by new investment and commitment to effect transformative change."
"With the strategic shift, ECRI is investing, at an unprecedented level, in the expert teams, proprietary data assets, and advanced capabilities that allow healthcare organizations to build safety into their culture, their operations, and their systems. Not as a one-time initiative, but as a permanent, self-reinforcing foundation," he said.
Despite decades of nationwide efforts, patient safety in the U.S. remains marked by high rates of preventable harm.
"One in four patient admissions involve an adverse event, and nearly a quarter of those are preventable. That's tragic and unacceptable," said Dheerendra Kommala, M.D., ECRI Chief Medical Officer. said. "Through this strategic move, ECRI is now singularly focused on improving patient safety. We plan to expand solutions that can transform healthcare organizations, building on our legacy of advancing evidence-based medicine."
There have been other large M&A deals in the healthcare supply chain market. In November, investment firm Patient Square Capital completed its acquisition of Premier Inc., a provider of data analytics and supply chain solutions, for $2.6 billion.