Quest Analytics Buys Healthcare Compliance Software Firm BetterDoctor

BetterDoctor, a San Francisco-based startup that has built a national database with information on physicians, dentists, and other practitioners, has been acquired by a Wisconsin software analytics business, the companies said Monday.

Appleton, WI-based Quest Analytics said that following its purchase of BetterDoctor, the combined company will build a “comprehensive platform” to help health plans and other organizations comply with federal and state regulations.

Quest Analytics develops software for health plans and other customers that lets users search for and monitor the healthcare providers with whom they’re affiliated. The company’s digital tools help clients ensure they’re acting in accordance with regulations from bodies like the Centers for Medicare and Medicaid Services—for example, rules requiring a health plan to make particular types of doctors and healthcare services available to its members across the entire geographic area it covers.

The companies did not disclose any financial terms in a press release announcing the deal.

According to the release, increases in insurance premiums and other healthcare costs in the U.S. have led health plans to reduce their numbers of in-network providers—those whose services the plans have in advance agreed to cover, at discounted rates. In response, federal and state insurance regulators have put rules in place around “network adequacy and provider data accuracy,” Quest Analytics said. These regulations are aimed at guaranteeing a health plan’s members have access to physicians and hospitals that provide a broad range of healthcare procedures and services.

“Narrow networks compound the issue of inaccurate provider data and pose substantial challenges to health plan members seeking the right doctor, hospital and care,” Roger Holstein, executive chairman of Quest Analytics, said in the release.

BetterDoctor’s software is likewise designed to help users ensure their provider networks comply with accuracy and adequacy regulations. For example, a 2016 California law requires that health plans review and update their directories of in-network providers every six months. The startup says its digital tools can help several types of organizations with regulatory compliance, including health insurers, provider groups, and networks of hospitals and clinics.

BetterDoctor says on its website that the company’s software also helps health plans and other customers prepare for audits, which can lead to fines if violations are found.

Launched in 2011 by two Finnish former Nokia employees, BetterDoctor’s vision early on was to help people find doctors who would accept their insurance plans. The startup later pivoted to a business-to-business model; as of June 2017, it had about 1,000 enterprise customers, including Louisville, KY-based Humana (NYSE: HUM), the San Francisco Business Times reported. BetterDoctor’s provider information reportedly comes from sources such as Yelp (NYSE: YELP), government-managed databases, and doctor quality and malpractice data tracked by the news service ProPublica.

According to BetterDoctor corporate materials, every three months the startup’s software asks the hundreds of thousands of healthcare providers in its database to review their own data to make sure it’s current. If a provider makes an update, BetterDoctor says it shares that information with all of its health plan clients who cover the provider’s services. The startup claims this data-updating process is more efficient than having health plans contact providers individually—one reason being that most providers accept multiple plans.

Following the acquisition, Ari Tulla, co-founder and CEO of BetterDoctor, is now CEO of Quest Analytics, the companies said. John Weis, who co-founded Quest Analytics 2003 and has continued to lead the company in the years since, is now its president. Monday’s press release did not say whether BetterDoctor’s other co-founder, chief technology officer Tapio Tolvanen, will stay on and help lead the combined company.

Quest Analytics and BetterDoctor each had about 50 employees prior to the acquisition, according to Axios.

BetterDoctor raised more than $25 million from investors, according to Crunchbase. That total includes funding rounds of $10 million in 2014 and $11 million a year ago.

Other tech companies that have a vision similar, but not identical, to BetterDoctor’s include Boston-based Kyruus, which uses data analytics to match patients with specialty physicians at local hospitals and clinics, and helps users schedule appointments. New York-based ZocDoc also helps users find doctors and book appointments.

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