Providence St. Joseph Health operates 51 hospitals in the U.S., including the one above in Burbank, California.

A Madison consulting firm that specializes in helping health care organizations with Epic Systems’ software has announced that it’s getting acquired by one of the largest health systems in the country.

Providence St. Joseph Health is a network headquartered in Renton, Washington that includes 51 hospitals and 829 clinics across seven states in the Western U.S. On Thursday, it said it plans to buy the Madison-headquartered Bluetree Network for an undisclosed amount of money. The acquisition will be completed upon the “satisfaction of certain closing conditions,” which also remain undisclosed.

According to Bluetree’s CEO Jeremy Schwach, Bluetree will continue to exist and operate as a subsidiary of Providence St. Joseph. It will remain in Madison, with offices in New York and Denver as well, and retain its workforce of approximately 300 employees. Schwach said that the company will continue its work like “business as usual.”

“Now, we just have a much bigger platform,” said Schwach. “The world’s our oyster.”

Schwach said that Bluetree currently works with about 140 Epic customers. After the acquisition, he said the company will be able to scale even further, while potentially expanding on the services it offers to clients.

Bluetree is one of the more prominent local examples of a startup with close links to Epic Systems, the massive Verona-based maker of digital health records software. When former Epic executives Ted Gurman and Reggie Luedtke co-founded the company out of the coworking space 100state in 2012, the focus was on helping Epic customers with staffing. Since then, the scope of the firm's work has expanded: It now helps customers with billing, training, analytics, and provides services like dedicated technical support.

For the past four years, the company has also worked on high-level strategy with health care organizations, advising groups on how to engage patients and reduce administrative costs.

“Epic is just about 40 percent of what we do,” said Schwach. “Most of the work is everything else.”

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Schwach said that the acquisition came about after Providence St. Joseph representatives approached Bluetree at a health care technology conference. He said he initially hoped they were interested in becoming a customer — the system is a $24 billion behemoth and one of the largest networks in the country — before he realized they wanted to acquire his company.

“It was pretty out of the blue,” said Schwach, of the acquisition. “We weren’t actively looking (for an acquiring partner).”

Providence St. Joseph, itself an Epic customer, said in a press release that they acquired Bluetree to help “diversify revenue.” The health system has been spun out and acquired other health care startups as part of that strategy: It recently launched a population health management company called Ayin Health Solutions, and acquired Lumedic, a company specializing in revenue software.

Bluetree's trajectory is not entirely unique: Madison has been home to a cluster of consulting firms specializing in Epic software, some of which have been similarly acquired. The Huron Consulting Group bought Vonlay in 2014, for example, while Accenture acquired Sagacious Consulting in 2015.

The acquisition also comes on the heels of Bluetree moving into a new 150,000-square-foot office space on Madison’s far west side in 2018 to accommodate its growing workforce.

Erik Lorenzsonn is the Capital Times' tech and culture reporter. He joined the team in 2016, after having served as an online editor for Wisconsin Public Radio and having written for publications like The Progressive Magazine and The Poughkeepsie Journal.