3M completes acquisition of MModal's tech business for $1B
UPDATE: Feb. 4, 2019: 3M announced Friday it completed the acquisition of MModal's technology business. The company laid out the financial impact of the deal during its Jan. 29 earnings call.
- Multinational conglomerate 3M has inked a definitive agreement to acquire the technology business of Pittsburgh-based MModal for $1 billion.
- MModal develops cloud-based, artificial intelligence-powered speech technology and clinical documentation tools aimed at improving the doctor-patient experience. Its technology business has annual revenue of about $200 million.
- MModal’s transcription, scribing and coding service business is not part of the deal, but will remain strategically aligned with 3M to ensure continuity and customer support, 3M said. The transaction is expected to close in the first half of 2019, pending regulatory approvals.
Speech technology is a major focus of investment right now as doctors look for ways to ease administrative workloads and hospitals and physician practices try to prevent burnout. Alphabet’s Verily Life Sciences has been working with Stanford Medical to assess AI and voice recognition in generating EHRs, and job postings this past summer suggest a long-term interest in speech technology.
Other players include Epic and Nuance Communications, which teamed up in September to leverage voice assistance technology in EHRs. Using technology compatible with Epic apps, doctors will be able to retrieve schedules, look up patient information and check lab results and medication lists.
And demand for voice technology is expected to grow. According to a Reaction Data report, 62% of healthcare providers currently use speech recognition technology and 14% have plans to use it.
AI-driven voice assistant Suki announced a milestone in October, processing more than 1,000 patient interactions per week. Between its May launch and October, the number of doctors using Suki as part of a pilot program tripled to more than 12,000 patient encounters.
3M plans to use MModal’s cloud-based, conversational AI technology in areas like population health, where it already is active.
"This acquisition builds on our strategic commitment to invest in our Health Information Systems business and expands the capabilities of our revenue cycle management and population health priority growth platform," Mike Vale, executive vice president of 3M’s Health Care Business Group, said in a press release announcing the deal.
In a 2016 partnership with Cerner, the company integrated its patient-focused episodes software with Cerner’s HealtheIntent population management platform, enabling providers to see a patient’s total documented conditions rather than just one disease. 3M also collaborated with Verily to develop population health management tools that can help providers manage clinical and financial performance.