Rajiv Kalia – Associate Vice President : Healthcare Research, at MarketsandMarkets™, shares his Point of View as mentioned below:
On December 19, 2018, 3M announced that it had entered into a definitive agreement to acquire the technology business (with an estimated revenue of USD 200 million) of M*Modal for USD 1.0 billion. The acquisition is aimed to improve the capabilities of the revenue cycle management and population health management platforms offered by 3M. The acquisition will help 3M to further enhance clinical documentation workflows for physicians and enable them to focus on core tasks of care delivery by incorporating M*Modal’s cloud-based conversational AI solutions into existing product offerings.
The deal comes towards the end of 2018, recognized as “the year of voice tech in healthcare.” Although 3M is the leading player in the ~USD 4.39-billion front-end and mid-revenue cycle management solutions market, the market for voice recognition technology in healthcare is dominated by Nuance, followed by M*Modal. Both have received highly positive feedback from top EHR companies, including Cerner, Epic, Meditech, and Allscripts. Epic has been working closely with Nuance for a long time to leverage Nuance’s voice assistance technology in its EHRs, while tech giants like Google and IBM have also shown increasing interest in utilizing AI for a multitude of healthcare applications. In the highly competitive arena of voice recognition technologies, the acquisition of M*Modal will help 3M to quickly bring conversational AI and ambient intelligence directly into clinical workflows and maintain technological leadership in the revenue cycle management market.
3M Health Information Systems (HIS) business currently has a customer base of more than 8,000 healthcare organizations worldwide, encompassing both providers and payers. With access to M*Modal’s geographic reach in emerging markets, 3M will now have the strongest customer base in this section of the market, as compared to its competitors, allowing it to deliver software and services across the continuum of care and to a broad range of end users.
This deal is expected to close by mid-2019, upon regulatory approvals. Approximately 750 employees of M*Modal’s technology business will join 3M upon completion of the transaction. The ongoing strategic business relationships between 3M and M*Modal that cover transcription, scribing, and coding services are not part of the acquisition, and will continue as it is.