2018 United States Ambulatory EHR Enabling Technology Leadership Award

2018

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Contents Background and Company Performance ...... 3

Industry Challenges ...... 3

Technology Leverage and Customer Impact ...... 3

Conclusion...... 7

Significance of Enabling Technology Leadership ...... 8

Understanding Enabling Technology Leadership ...... 8

Key Benchmarking Criteria ...... 9

Best Practices Award Analysis ...... 9

Decision Support Scorecard ...... 9

Technology Leverage ...... 10

Customer Impact ...... 10

Decision Support Matrix ...... 11

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ...... 12

The Intersection between 360-Degree Research and Best Practices Awards ...... 13

Research Methodology ...... 13

About Frost & Sullivan ...... 13

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Background and Company Performance

Industry Challenges

The US healthcare industry is undergoing a transformation that is altering business operations every day in response to expanding political influence, changing regulations, and evolving demographic dynamics. Providers across the country aspire to optimize outcomes and streamline expenses with the help of high-performing healthcare technologies that offer value-based, result-oriented, and user-friendly solutions.

The poor usability of legacy healthcare IT platforms that do not optimally support the recently imposed final rules set by MACRA (Medicare Access and CHIP Reauthorization Act) has compelled most US-based physician practices to re-imagine their healthcare IT infrastructure priorities. Today, Frost & Sullivan points out that they are more receptive to either upgrade or completely replace their incumbent electronic health record (EHR) and billing systems. The fact that the current rip and replacement rate (for EHR) is estimated to be as high as 50% in the United States is aiding progressive healthcare IT solution providers that are capable of helping physicians assemble a safe, coordinated, auto- updated, and remotely accessible healthcare IT environment that comprises both clinical and financial IT products.

Frost & Sullivan notes that almost all of these vendors demonstrate some form of cloud- based capabilities. In addition, in response to providers’ demand for an interoperable healthcare IT ecosystem that authenticates and facilitates seamless data exchange across the care continuum, these vendors report to Frost & Sullivan how they are actively trying to evolve and add innovative features that can optimize practice profitability. Many practices are currently at-risk of going out of business due to the lack of competitive advantage and the involvement of multiple payers (e.g., private, public, out-of-pocket) that are embracing performance-based reimbursement. Frost & Sullivan recognizes how compliant and cost-effective healthcare IT vendors provide the tools needed for these vendors to thrive in the ever-changing healthcare landscape.

Technology Leverage and Customer Impact

Commitment to Innovation and Creativity

Since 2004, US company Kareo, Inc. (Kareo) has broken ground as a pioneering cloud- based healthcare IT vendor that specializes in HIPAA-compliant billing for US ambulatory physician practices. In the last 14 years, the company has gradually added progressive features into its core product portfolio to keep it relevant for a wide variety of customers, namely doctors, practice managers, billers, billing companies, and new practices serving patients that cumulatively represent more than 35 disease categories. Today, Kareo offers clinical (EHR), financial (billing, managed billing, and collection), and patient engagement and practice marketing (patient reviews, provider profiles, online appointments and

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reminders) solutions to over 45,000 ambulatory healthcare providers across all 50 US states

The latest product innovation from Kareo is a flagship solution called Kareo Telemedicine, which provides the US telemedicine industry with a secure and HIPAA-compliant video consultation tool for remote visits between patients and their physicians. The tool is supported by an experienced customer service team and powered by agile cloud-based software that can be implemented, operated, and managed remotely via Internet connection. Separate download of heavy IT applications is not required. In this way, Frost & Sullivan recognizes how the solution serves a critical purpose in saving substantial operational costs that practices historically incur - while catering to patients who visit their clinics to receive a diverse scope of healthcare services. Kareo Telemedicine is also fully interoperable with Kareo EHR and Kareo Billing. It allows providers to perform reimbursement eligibility assessment (in accordance with state telemedicine reimbursement protocols and private payer mandates) seamlessly and helps physicians prioritize appointments via EHR and practice management (PM) systems. As a result, practices reduce patient no-shows and improve follow-up care.

Frost & Sullivan acknowledges that Kareo’s ability to guarantee private payer reimbursement for virtual patient visits is truly unique among its top competitors, as lack of reimbursement for telemedicine has restricted many providers from adopting the technology. This has been made possible by Chiron Health, Kareo’s leading IT partner, which incorporates an advanced telemedicine rules engine into the Kareo EHR workflow and ensures that independent clinicians and physicians are reimbursed adequately for embracing telemedicine. The two-year bipartisan budget, which was introduced by the Senate recently (February 2018), also includes a specific provision (under the Chronic Care Act) to extend the scope of telehealth to Medicare Advantage Plans from 2020. Frost & Sullivan agrees that Kareo is well positioned to maximize value from this new legislative rule.

Stage Gate Efficiency

Frost & Sullivan applauds how Kareo has revolutionized the cloud-based EHR market for US-based physician practices with its modular EHR solution that can be custom configured based on end-user preferences. The platform is deployed much quicker than legacy EHRs, as solution accessibility is granted and authenticated via Internet connection. The ICD-10 compliant and MU 2015 Edition certified technology enables both physician and non- physician providers to optimize practice productivity by allowing clinical documentation, e- prescribing, patient charting, secure messaging, patient portal integration, consolidation of lab reports, and dashboard-based analytics. More importantly, customers can transfer procedure and diagnostic codes to Kareo billing seamlessly (without having to log into separate portals). Practices that generate paper statements or deploy in-house coding full-time employees can also partner with Kareo for processing billing documents at scale. In this way, practices can streamline operational productivity, which has become a critical prerequisite for many independent practices today.

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Another important element of Kareo’s products is their ability to remain fully interoperable with each other. For instance, the practice management software can be deployed within the EHR solution as an additional module. Pricing for both clinical and financial products is bundled in such a way that practices establish cost competitiveness when compared against other practices that dedicate separate IT investment for EHR and PM software systems. All customers of the integrated solution are granted unlimited use of common platform features - such as patient scheduling, appointment reminders, and HIPAA- compliant messaging. In Frost & Sullivan’s view, these cloud-based solution features grant impressive convenience to physicians, establish cost transparency for management leaders, and improve the practice’s efficiency at an enterprise level.

Application Diversity

While Kareo’s clinical product portfolio stands out for being value-based, its financial and marketing solutions position the firm as a truly diverse healthcare IT solution provider.

Most US physician practices cater to patient populations that represent a diverse payer mix. These patients - coupled with others who are enrolled with either co-pay or high- deductible health plans - pose critical challenges to practices that often fail to manage and collect patient dues on time. Kareo properly solves this problem for practices that currently manage in-house billing teams in dire need of third-party support. The firm effectively reduces practices’ operational burden specific to record keeping, accounts receivable (A/R) management, charge capture, and collection.

Kareo Billing digitizes the entire billing workflow and provides virtual support that promotes paperless billing transaction and hassle-free collection for customers. Furthermore, Kareo Billing is auto-upgraded at no additional cost and can be accessed from virtually anywhere with a secured online log-in. Practice leaders also enjoy having access to comprehensive reports that Kareo Billing’s built-in analytics engine generates within a fast turnaround time. This allows key opinion leaders to prioritize patient reach- out strategy (for collection) and ensure reduction of average A/R timeline for the enterprise.

Kareo also caters to physician practices that are more receptive to outsource their entire billing and collection office to a third-party IT provider to gain cost advantage and focus exclusively on patient care. In particular, Kareo Smart Workflow, powered by Kareo Medical Billing, was designed by doctors to help customers deploy a virtual team capable of undertaking every complex element of billing, which covers the following:

• Specialty-specific billing

• Patient eligibility assessment from a single screen

• Charge capture during patient visit via multi-media enablers

• Rules engine optimization in accordance with national benchmarks

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• Claims monitoring

• Real-time measurement of outstanding payments and periodic alert for the same

• Billing productivity management via dashboard reporting

Kareo also offers practice marketing and patient engagement solutions to ensure that every customer is well equipped to augment patient experience via personalized communications. Kareo Marketing allows practices to establish a credible online presence, which promotes convenience and transparency for every stakeholder, especially incoming and outgoing patients. Features such as online patient scheduling, post-visit patient feedback collection, and timely patient contact have allowed physicians to secure patients’ trust and attract new customers.

Overall, Kareo’s billing and marketing solutions help physicians streamline the cost of billing and improve revenue objectives.

Frost & Sullivan believes a solution technology platform that supports the needs of independent provider practices across diverse clinical, financial, and other critical business areas is the correct way forward in terms of optimal client benefit from solution providers.

Customer Purchase and Ownership Experience

Kareo is not a pure-play IT vendor. In addition to its solution portfolio, the company also offers a service team that is dedicated to physician practices’ training, hosting, implementation, and optimization needs.

The team is available to assist physicians in various ways, including tele-consultation, email response, or real-time online chat. Claims that are submitted by practices are reviewed by the team with the help of a progressive billing technology (code-scrubbing system) that clearly highlights patterns of diagnostic misinterpretation (involving clinical codes) and prompts repeat submissions that ultimately prevent loss of payment. Despite such measurements, claims that are rejected by payers would be analyzed by Kareo to identify the root cause.

In addition, Kareo assigns a success coach to each customer account. The coach is primarily responsible for onboarding new users and ensuring proficiency with all relevant Kareo modules and functionality. The assigned coach delivers regular consultations with practice leaders and in-house billing team members who greatly benefit from timely information on their coding and claims and overall practice management efficiency.As a result, Kareo’s key customers demonstrate industry-leading results and remain associated with the firm for years.

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Conclusion

Kareo is backed by both loyal institutional investors that have remained committed to this firm for many years, and new investors that have agreed to partner due to the strength of the company’s latest products, positive market reputation, impressive revenue growth, and sustainable business models. Kareo serves an important US healthcare market need, which can be characterized as physician practices’ growing appetite for outsourced billing and collection services.

As such, Kareo has been reporting double-digit revenue growth for last few years. The company’s latest revenue is an estimated to exceed $75 million.With its strong overall performance, Kareo has earned the 2018 Frost & Sullivan Enabling Technology Leadership Award.

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Significance of Enabling Technology Leadership Ultimately, growth in any organization depends upon customers purchasing from a company and then making the decision to return time and again. In a sense, then, everything is truly about the customer—and making those customers happy is the cornerstone of any long-term successful growth strategy. To achieve these goals through enabling technology leadership, an organization must be best-in-class in three key areas: understanding demand, nurturing the brand, and differentiating from the competition.

Understanding Enabling Technology Leadership Product quality (driven by innovative technology) is the foundation of delivering customer value. When complemented by an equally rigorous focus on the customer, companies can begin to differentiate themselves from the competition. From awareness, to consideration, to purchase, to follow-up support, best-practice organizations deliver a unique and enjoyable experience that gives customers confidence in the company, its products, and its integrity.

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Key Benchmarking Criteria For the Enabling Technology Leadership Award, Frost & Sullivan analysts independently evaluated two key factors—Technology Leverage and Customer Impact—according to the criteria identified below.

Technology Leverage Criterion 1: Commitment to Innovation Criterion 2: Commitment to Creativity Criterion 3: Stage Gate Efficiency Criterion 4: Commercialization Success Criterion 5: Application Diversity

Customer Impact Criterion 1: Price/Performance Value Criterion 2: Customer Purchase Experience Criterion 3: Customer Ownership Experience Criterion 4: Customer Service Experience Criterion 5: Brand Equity

Best Practices Award Analysis for Kareo Decision Support Scorecard To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool allows our research and consulting teams to objectively analyze performance, according to the key benchmarking criteria listed in the previous section, and to assign ratings on that basis. The tool follows a 10-point scale that allows for nuances in performance evaluation. Ratings guidelines are illustrated below. RATINGS GUIDELINES

The Decision Support Scorecard is organized by Technology Leverage and Customer Impact (i.e., These are the overarching categories for all 10 benchmarking criteria; the definitions for each criterion are provided beneath the scorecard.). The research team confirms the veracity of this weighted scorecard through sensitivity analysis, which confirms that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies.

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The results of this analysis are shown below. To remain unbiased and to protect the interests of all organizations reviewed, we have chosen to refer to the other key participants as Competitor 2 and Competitor 3.

Measurement of 1–10 (1 = poor; 10 = excellent)

Technology Customer Average Enabling Technology Leadership Leverage Impact Rating

Kareo 9.0 9.0 9.0

Competitor 2 8.0 8.0 8.0

Competitor 3 8.0 7.5 7.5

Technology Leverage Criterion 1: Commitment to Innovation Requirement: Conscious, ongoing adoption of emerging technologies that enables new product development and enhances product performance Criterion 2: Commitment to Creativity Requirement: Technology leveraged to push the limits of form and function in the pursuit of “white space” innovation Criterion 3: Stage Gate Efficiency Requirement: Adoption of technology to enhance the stage gate process for launching new products and solutions Criterion 4: Commercialization Success Requirement: A proven track record of taking new technologies to market with a high rate of success Criterion 5: Application Diversity Requirement: The development and/or integration of technologies that serve multiple applications and can be embraced in multiple environments

Customer Impact Criterion 1: Price/Performance Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market. Criterion 2: Customer Purchase Experience Requirement: Customers feel they are buying the most optimal solution that addresses both their unique needs and their unique constraints. Criterion 3: Customer Ownership Experience Requirement: Customers are proud to own the company’s product or service and have a positive experience throughout the life of the product or service. Criterion 4: Customer Service Experience Requirement: Customer service is accessible, fast, stress-free, and of high quality.

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Criterion 5: Brand Equity Requirement: Customers have a positive view of the brand and exhibit high brand loyalty.

Decision Support Matrix Once all companies have been evaluated according to the Decision Support Scorecard, analysts then position the candidates on the matrix shown below, enabling them to visualize which companies are truly breakthrough and which ones are not yet operating at best-in-class levels.

High

Kareo

Competitor 2

Competitor 3

CustomerImpact

Low

Low Technology Leverage High

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Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Frost & Sullivan analysts follow a 10-step process to evaluate Award candidates and assess their fit with select best practice criteria. The reputation and integrity of the Awards are based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

• Monitor, Identify Award recipient Conduct in-depth industry Pipeline of candidates who 1 target, and candidates from around the research potentially meet all best- • screen globe Identify emerging sectors practice criteria • Scan multiple geographies

Perform comprehensive, • Interview thought leaders Matrix positioning of all Perform 360-degree research on all and industry practitioners candidates’ performance 2 360-degree candidates in the pipeline • Assess candidates’ fit with relative to one another research best-practice criteria • Rank all candidates

Invite Perform in-depth • Confirm best-practice criteria Detailed profiles of all thought examination of all candidates • Examine eligibility of all ranked candidates 3 leadership in candidates best • Identify any information gaps practices

Initiate Conduct an unbiased • Brainstorm ranking options Final prioritization of all research evaluation of all candidate • Invite multiple perspectives eligible candidates and 4 director profiles on candidates’ performance companion best-practice review • Update candidate profiles positioning paper

Assemble Present findings to an expert • Share findings Refined list of prioritized panel of panel of industry thought • Strengthen cases for Award candidates 5 industry leaders candidate eligibility experts • Prioritize candidates

• Conduct Build consensus on Award Hold global team meeting to Final list of eligible Award global candidates’ eligibility review all candidates candidates, representing 6 • industry Pressure-test fit with criteria success stories worldwide • review Confirm inclusion of all eligible candidates

Develop official Award • Perform final performance High-quality, accurate, and Perform consideration materials benchmarking activities creative presentation of 7 quality check • Write nominations nominees’ successes • Perform quality review

Reconnect Finalize the selection of the • Review analysis with panel Decision on which company with panel of best-practice Award recipient • Build consensus performs best against all 8 industry • Select recipient best-practice criteria experts

Inform Award recipient of • Present Award to the CEO Announcement of Award • Communicate Award recognition Inspire the organization for and plan for how recipient 9 recognition continued success can use the Award to • Celebrate the recipient’s enhance the brand performance

Upon licensing, company is • Coordinate media outreach Widespread awareness of Take able to share Award news • Design a marketing plan recipient’s Award status 10 strategic with stakeholders and • Assess Award’s role in future among investors, media action customers strategic planning personnel, and employees

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The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Frost & Sullivan’s 360-degree research 360-DEGREE RESEARCH: SEEING ORDER IN methodology represents the analytical THE CHAOS rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360- degree research methodology provide s an evaluation platform for benchmarking industry participants and for identifying those performing at best-in-class levels.

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