Arcadia Healthcare Solutions Acquires Leading Managed Care Provider

Arcadia Healthcare Solutions, a leading Electronic Health Record (EHR) data aggregation and analytics technology company, today announced the acquisition of managed services and ACO implementation provider Sage Technologies. With 17 years of outsourced managed care operations, third party claims administration, financial leadership, data analytics, and quality improvement programs, Sage strengthens Arcadia’s position as a market leader in full-service managed care – the end-to-end blended technology and services capability to help healthcare leaders efficiently manage their business in a value-based setting.

“Specifically, Sage brings differentiated operational expertise in supporting organizations well into this journey, and a deeply engaged client base with a strong presence in the Midwest.”

“The Arcadia strategy is predicated on the notion that healthcare is in an irreversible transition from volume-based to value-based care, where unlocking the value of EHR data is the key to success. In the context of this enormous change, we are on a steady search for strategic opportunities to add to our competitive offering and strengthen our company for the growth ahead,” said Sean Carroll, CEO, Arcadia Healthcare Solutions. “Specifically, Sage brings differentiated operational expertise in supporting organizations well into this journey, and a deeply engaged client base with a strong presence in the Midwest.”

Supporting the health of over 20 million patients, and the performance and operations of 3,000 provider practices nationwide, Arcadia’s analytics technology and transformation services enable its customers to aggregate and harmonize clinical data from over 30 different EHR vendors and multiple health insurance claims systems. Ensuring a consistently high-quality data asset, and presenting analyses in an immediately actionable way, the Sage Technologies acquisition adds another powerful layer of service offerings exceeding others in this market. Beyond analytics technology, population health management, and expert consulting, Arcadia’s differentiated capabilities include deep EHR integration, EHR optimization, hosting, and managed technical services, which are all critical components that many partners lack.

Arcadia is now able to work with physician groups through the entire spectrum of capabilities and technologies required to operate under the value-based care payment model, including fully outsourced support of:

• Formation and governance of an ACO/shared risk practice with financial, administrative, and care management leadership
• Integration and harmonization of EHR, claims, and operational data from all relevant parties via the Arcadia analytics platform
• Population health management including quality program performance management, utilization and medical expense management, and patient care management via the Arcadia Analytics platform to support efficient and high quality care
• On-the-ground care and utilization managers with the expertise to use population and patient-level data to make meaningful and lasting improvements

The acquisition is being funded by a combination of existing Arcadia investors and new investors, led by Peloton Equity, with participation by Morgan Stanley Alternative Investment Partners, Zaffre Investments, and Escalate Capital Partners.

“With 20 years of experience in managed care and operations for healthcare providers and insurance companies, we have seen the industry go through a dramatic shift,” said Brian Croegaert, CEO, Sage Technologies. “With Arcadia’s ability to provide technologies that support provider groups’ health system and health plan partners as they manage the transition to value-based care, the decision to drive this transformation together is a natural progression for our Company. We’re excited to join the Arcadia team and further strengthen and pursue these goals.”

About Sage Technologies

Sage Technologies (http://www.usesage.com) provides technology-enabled services that allow large physician groups to enter into risk-based contracts with health plans, accountable care organizations, and other healthcare organizations that are seeking to enter into value-based care arrangements. Sage has been performing outsourced managed care operations, third party claims administration, financial leadership, data analytics, and quality improvement programs for over 16 years in one of the few fully at-risk markets in the U.S. and this deep experience has enabled the company to develop a differentiated set of capabilities that allows it to administer and manage risk and value-based contracts in a highly efficient and cost effective manner. Founded in 1999, Sage Technologies is based in Rockford, Illinois.

About Peloton Equity

Peloton Equity, LLC (http://www.pelotonequity.com) is a newly-formed private equity firm that focuses exclusively on growth capital investments in the lower middle market of the healthcare industry. Peloton’s portfolio includes HealthPlanOne, a leading technology-enabled digital marketing firm specializing in Medicare and individual and family health insurance sales and distribution and Arcadia Healthcare Solutions. Peloton leverages its extensive healthcare network, value-building diligence and investment process, and portfolio management playbook to add value to its portfolio companies. Peloton seeks companies with between $20 and $200 million of revenue and the management team, market opportunity and business model to grow revenues meaningfully over the life of its investment.

About Zaffre Investments

Zaffre Investments, LLC (http://www.zaffreinvestments.com/) is a wholly-owned subsidiary of Blue Cross Blue Shield of Massachusetts that is committed to adding value through investments in new products, services and technologies that aim to improve the way healthcare is delivered and received. Zaffre focuses on companies across the healthcare landscape, with a primary focus on ACOs, consumer solutions, health information technology, and behavioral health. The firm is stage agnostic, considering a company’s financial and market positions, capabilities, and core values, as well as their missions and visions for the future. Zaffre employs a true partnership model for its portfolio companies, providing strategic direction, business support, industry connections and more.

About Morgan Stanley Alternative Investment Partners

Morgan Stanley Alternative Investment Partners (http://www.morganstanleyaip.com), part of Morgan Stanley Investment Management, specializes in assisting institutional and high net worth investors achieve their goals through the design and management of alternative investment programs. Established in 2000, Morgan Stanley AIP currently has approximately $36.4 billion in assets under management and advisement.

About Escalate Capital Partners

Escalate Capital Partners (http://www.escalatecapital.com) is a private equity, venture capital, mezzanine and venture debt firm specializing in growth, acquisition, bridge financing, and buyouts financing and permanent working capital financing to expansion, mid venture, and late venture companies. It provides equity and senior, subordinated, and mezzanine debt financing to its portfolio companies. The firm seeks to invest between $3 million and $15 million in companies that are capable of achieving a cash-flow breakeven within 12 to 18 months and are backed by venture capital and private equity investors. Escalate Capital Partners was founded in 2004 and is based in Austin, Texas with an additional office in San Jose, California.

About Arcadia Healthcare Solutions

Arcadia Healthcare Solutions (http://www.arcadiasolutions.com) is an EHR data aggregation and analytics technology company delivering managed care to ambulatory networks taking on value-based risk. Arcadia specializes in the integration of data from 30+ EHR platforms, enriching them with claims and operational data, and using that data to drive improvements in patient care quality, practice efficiency, and financial performance. Trusted by independent provider groups, health plans, and integrated delivery networks nationwide, with expertise in both fee-for-service optimization and value-based performance environments, Arcadia supports providers with the benchmark data, insights, and outsourced services to excel in the evolving landscape of American healthcare. Founded in 2002, Arcadia is headquartered outside Boston in Burlington, MA, with offices in Seattle and outside Chicago in Rockford, IL.