January 7, 2022
Summary
The Data Monetization Index (DMI) for Health Care companies varies by industry and company:
- Health Care Facilities (Providers) including HCA Healthcare and Universal Health Services have a DMI of approximately 5.4%
- Health Care Payers including Anthem, Centene, Cigna, Humana, UnitedHealth Group and CVS Health Corporation have DMI’s in the range of 5.9% to 24.3% with an average of 11.1%
A higher DMI is generally preferable across companies and industries. By way of reference, internet companies have a higher DMI because most of their enterprise value is derived from data. For example, Google’s DMI is 93 percent as we will discuss in a separate blog.
Definitions
- Data Monetization Index (DMI) = Data Valuation / Enterprise Value
- Enterprise Value = Equity Value + Long Term Debt – Cash, a key metric used in the investment community
Methodology
- The Data Valuation for Health Care Facilities is based solely on the estimated number of Electronic Medical Records (EMRs) and the comparable value for this dataset in the industry, please refer to an example for HCA Healthcare
- The DMIs for Anthem, Centene and Cigna are in the range of 6%-8% based on the estimated valuation of member data driven by counts, Medical Loss Ratio, churn rate and tenure using publicly-available datasets
- UnitedHealth Group has a DMI of 12.4% based on a valuation of member data as well as OptumInsight
- Humana has a DMI of 24.3% based on a valuation of member and patient data
- CVS has a DMI of 9.5% based on a valuation of member and pharmacy loyalty data
The data valuation relies exclusively on publicly-available data sources such as SEC filings, industry research and comparable transactions from November 2021. The total value of data will likely be higher once additional datasets such as claims, clinical and providers are included. Going forward, we will be working to make the data valuation more real-time.