as a key measure of quality and reimbursement, he says.
Soon, Medicaid was looking at similar quality metrics. All
of this has been part of an industry shift away from volume-based health care—getting paid for services, such as how
many tests you perform—and toward value-based health
care—getting paid to proactively keep patients healthy.
“Folks have always collected data, but with the move
from volume-based to value-based outcomes, you have to
gather a lot more information from a lot more sources,” says
Mark Lorence, a health care analytics expert at PA Consulting. “Instead of just collecting lagging data, like how many
diabetes patients you saw last quarter, now you need to bring
together all sorts of metrics and measures and use them to
create predictive models.” For instance, is a patient’s medical
condition likely to get worse or better? Which of the
available health care resources within a geographical area
will produce the best results for a specific patient? And more
broadly, what’s the best way for the health care system to
interact with a patient to produce better results?
Inovalon’s ability to do advanced data aggregation
and analytics was an easy sell for insurance companies
struggling to make sense of messy data silos. But to chase
market dominance, Dunleavy needed outside capital. In
2008, André Ho;mann, vice chair at Roche Holdings and
an early investor, doubled down and bought 15 percent
of the company from shareholders. The funding would
allow Inovalon to better manage the growth Dunleavy
envisioned, as well as let early investors and employees
cash out. As Inovalon grew, so did the data set, says
Rizzo, which in turn made it easier to get new clients on
board because they could leverage richer insights with
greater confidence and anonymity.
ndaunted by med school, programming
for Merck, or making life-or-death
decisions as a resident, Dunleavy found
the IPO process stressful. “When you
go public, there are all these people you
want to feel a responsibility to, but
you don’t even know who they are. And they’re judging
whether they agree with what you’re doing on a minute-
by-minute basis,” he says. “It’s a strange experience.”
Inovalon’s first-year performance was ho-hum, and in
mid-2016 some class action law firms sued, because that’s
what they do. “Whenever the stock goes down, the jackals
come out,” says James Angel, an associate professor at the
Georgetown University McDonough School of Business.
Inovalon has since reclaimed its stride. In the last quarter
of 2017, sales increased 19 percent year-over-year, and the
Ability Network acquisition is poised to combine the Inova-
lon One Platform with the Ability Network of more than
44,000 provider facilities. This connects the entire health
care ecosystem—payers, manufacturers, diagnostics, all the
way down to the patient’s point of service—to deliver real-
time, value-based health care. Because the data brain that
Inovalon has built works best when every part of a patient’s
health care journey is feeding the machine.
KATE ROCK WOOD is an Inc. contributing editor.
ZOË HENRY is an Inc. sta; writer.
AY 2018 ; ; ; ; ; ;
Extraction Oil and Gas
He found an angle on oil drilling and
created an urban fracking firm.
At 26, Matt Owens dreamed of gathering hard-to-reach hydrocarbons
buried in the earth. At the time, most oil firms drilled vertical wells,
Oil and Gas, in Denver, in 2013. In addition to improving
horizontal wells, Owens made the risky decision to frack near
urban centers, rather than in swaths of back country; this
allowed him to tap electrical grids, as opposed to using loud,
diesel-burning generators. His oil rigs run quietly.
;Before too long, though, he was running out of cash.
Reason: “In oil and gas, you actually have to spend money to
make the money,” Owens says. An IPO would be the most
efficient path to funding.
His timing could not have been worse. Between 2013 and
2016, the price of oil plummeted from $100 a barrel to around $35.
His firm went through the filing process for 20 months, he says, waiting
for the market to rebound. To keep going, the company figured out how
to cut drilling costs from nearly $5 million a well to about $2.5 million.
The strategy paid off. In October 2016, the company raised $630
million, valuing it at more than $2 billion. “It was a lot of blood, sweat,
and tears, being the first oil company to go public in almost two
years,” says Owens. In 2017, Extraction Oil and Gas generated more than
$600 million in revenue, and it is on track to turn a profit. —Z.H.
IPO October 2016