Athenahealth knows that managing physician practices can result in a splitting headache, especially when patients are late paying bills or miss appointments. The company provides health care organizations with online software for cloud-based electronic health record (EHR), practice management, and patient communication services. Offerings include revenue cycle management (athenaCollector), medical record automation (athenaClinicals), and patient relations and referral systems (athenaCommunicator and athenaCoordinator). Its services help health care providers streamline workflow, data, and billing and collection tasks. Athenahealth's programs are managed through its cloud-based athenaNet network. In 2018, athenahealth agreed to be acquired by two private equity firms for $5.7 billion.
Change in Company Type
Athenahealth agreed to sell itself to an affiliate of Veritas Capital and Elliott Management Corp.s Evergreen Coast Capital for $5.7 billion, a transaction that will take the company private. When the deal closes, athenahealth will be combined with Virence Health, which Veritas acquired earlier in 2018. The combined business would be a healthcare information technology company with an national provider network of customers and products for that market. The acquisition is expected to close in the first quarter of 2019.
More than 80,000 medical providers, including some 55,000 physicians, use the company's athenaCollector services. In 2015 athenahealth's offerings were used by its clients to post nearly $19 billion in physicians' collections and to process about 60 million medical claims.
The company's cloud-based businesses services (basically all of its software) generates 96% of revenue. The other 4% comes from implementations and other services.
Athenahealth serves clients throughout the US. It has operations in several US cities and in India and the Philippines.
Sales and Marketing
Athenahealth primarily uses a direct sales force to promote its products, though it also has third-party distribution channels in certain regions. Its sales force is divided into enterprise, group, hospital, and small group teams, while the channel partners are typically compensated for passing on sale leads.
The company serves hospitals, clinics, and medical professionals, including family practice offices and practitioners. athenahealth employs a variety of marketing techniques to recruit new customers and increase its brand awareness, including online and print advertising campaigns; trade shows; email and phone programs; and information sessions and seminars for potential clients.
Athenahealth ramped up advertising in 2015, spending $28 million, a healthy increase from the total of some $29 million for 2014 and 2015.
Athenahealth reported a 23% increase in revenues in 2015 to about $925 million, which was attributed to its larger customer base and a broader array of implementation and business services provided to those customers. The company rebounded from a $3 million loss in 2014 to post a $14 million profit in 2015.
Cash flow from operations rose to $164 million in 2015 from $149 million in 2014.
There is a huge opportunity for health care information technology services in the US, as the Patient Protection and Affordable Care Act (PPACA) is driving more people to have health insurance.
Athenahealth's strategy includes meeting the needs of specific clients (and thus garnering loyalty), integrating multiple programs into clients' comprehensive workflows, and forming new client relationships through focused marketing efforts. It also seeks to provide products that are easy to adopt into daily practice routines, while helping customers to reduce administrative costs. athenahealth is especially focused on increasing use of its newer athenaRules offering, which helps health care clients comply with the reimbursement rules of government and commercial health plans.
Mergers and Acquisitions
Athenhealth has typically acquired small but promising companies to broaden its market presence.
In 2017 the company bought Praxify Technologies, which develops technology for how doctors work with health data. Athenahealth will integrate Praxify's technologies to enhance its platform strategy and mobile capabilities to allow smoother workflows and increase information available at the point of care. Terms were not disclosed.
Athenahealth made a move into the lucrative hospital sector in early 2015 with its acquisition of startup RazorInsights. The acquired firm specializes in EHR services for rural, critical access, and community hospitals with 50 beds and under.
Also in 2015 athenahealth bought Arsenal Health, which has been a third-party in some athenahealth customer deals. With the acquisition Arsenal Health's schedule optimization product will be available as a native part of athenaNet.