Abacus Insights, a cloud-powered healthcare data startup, raised $12.7 million in series A funding, as investors bet that cloud-based data management solutions will migrate from hospitals to health insurance companies.
Abacus is the first and only company that offers cloud computing to streamline data for health insurers, Mintal Patel, Abacus founder and CEO, said in an interview with Karma.
“Nobody else is focusing” on the health insurance side, Patel said. Abacus is helping insurers “use the data they already have in a much more efficient fashion.”
Led by venture capital firm CRV, the new funding will be used to double the New York-based company’s 40-employee team and will include hiring more engineers to further develop its product.
The ability to share data, also known as interoperability, is the key to modernizing the healthcare system, and cloud-based technology is seen as the future. The global healthcare data interoperability market is predicted to surpass $3.5 billion by 2025, driven by government initiatives. Cloud computing makes is expected to make data exchange be faster and more accurate with a wider range of players.
The U.S. government has been pushing for healthcare transparency for a decade, while healthcare providers see data, especially details of care prices, as trade secrets. The Obama Administration started to require hospitals to digitize health records in 2009, and the number of hospitals that adopted Electronic Health Records reached 96% last year, up from 9% a decade ago. In February the Department of Human Health and Services proposed new regulations aimed at giving patients better access to their health information.
However, the rush to digitize healthcare data has lead to malfunctions such as the electronic system displaying doctors’ notes for the wrong patient. Nonetheless, the market for on-premise interoperability software, mostly adopted by large hospitals, was for $780 million in 2018.
In the past, to access a single patient’s healthcare data, an insurance company would have to deal with different platforms, including care management, claims, and membership, said Patel, adding that some of those databases were outdated. Abacus Insights helps insurance companies integrate all the data and put it on one cloud-based data platform, as some hospitals already have.
When it comes to patient privacy, Patel told Karma that Abacus isn’t providing insurance companies with any new data, but simply streamlining management of data already available.
“If you leave insurance company A and go to insurance company B, even if insurance company B is a customer (of Abacus), we wouldn’t give that data over to insurance company B,” said Patel. “Unless you said yes, send my records over. Then we would facilitate that.”
“It is our belief that the technologies that we are using in the cloud are safer or more protected from the privacy protection perspective than the status quo,” Patel said.