DMIᵀᴹ Index for Health Care

December 17, 2021

Summary

The DMITM Index for Health Care companies varies by industry and company:

  • Health Care Facilities (Providers) including HCA Healthcare and Universal Health Services have a DMI Index of approximately 5.4%
  • Health Care Payers including Anthem, Centene, Cigna, Humana, UnitedHealth Group and CVS Health Corporation have DMI’s Index in the range of 5.9% to 24.3% with an average of 11.1%

A higher DMI Index is generally preferable across companies and industries. By way of reference, internet companies have a higher DMI Index because most of their enterprise value is derived from data. For example, Google’s DMI Index is 93 percent as we will discuss in a separate blog.

Definitions

  • DMITM Index = 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 Index 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 Index of 12.4% based on a valuation of member data as well as OptumInsight
  • Humana has a DMI Index of 24.3% based on a valuation of member and patient data
  • CVS has a DMI Index 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.

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