WATERTOWN, MA – In a deal athenahealth hopes will accelerate development of its new care coordination service, the EMR and practice management provider announced Thursday that it has signed an agreement to acquire Proxsys, a Birmingham, Ala.-based developer of cloud-based care coordination services between physicians and hospitals.
Terms of the merger agreement include a cash payment of approximately $28 million with the potential for additional consideration of up to $8 million, based on the achievement of certain business and financial milestones. The transaction is expected to close during the third quarter of 2011.
Proxsys offers innovative services for care coordination, order transmission, referral management, hospital patient registration, and insurance pre-certification. Its technologies simplify care transitions from physicians to their supply chain partners including specialists, laboratories, imaging centers, hospitals and ambulatory surgery centers. The firm serves approximately 90 clients, including certain athenahealth enterprise hospital clients, representing approximately 8,000 physicians and 60,000 patient registrations every month.
[See also: athenahealth expands Maine presence with $7.7M deal.]
“We have a vision for how healthcare information exchange ought to work, and Proxsys represents a critical element of achieving that vision,” said Jonathan Bush, CEO and chairman of athenahealth.
He added that the merger "accelerates the launch of our new athenaCoordinator service, which facilitates the flow of information throughout the healthcare supply chain, improving care coordination for current and future clients. This service will be the latest piece of the national health information backbone we have been steadily constructing.”
athenahealth intends to fully integrate Proxsys and its service offerings onto athenaNet, its cloud-based service platform, enabling athenaCoordinator service to move patients, with their clinical and insurance data, from the ordering provider to order recipients on a transaction fee basis.
Hospitals would help drive the adoption of athenaCoordinator into affiliated practices to reduce costs and provide better control of patient care for both the hospital and the ordering provider, officials say. As ordering providers send more orders through athenaCoordinator, the company believes it will spur adoption of the athenaCoordinator service by other hospital systems in the community.
[See also: Vendor Notebook: athenahealth to provide RCM services.]
“There is a common cloud-based service model that supports both athenahealth and Proxsys," said George Salem, the firm's founder and president. "As we integrate our services, we expect to drive a level of efficiency, accuracy, and clarity in the healthcare supply chain that is not being realized today."
Salem added that a "tremendous amount of administrative pain, liability, cost waste, and redundancy … has been bottle-necking the flow of vital health information." His company's partnership with athenahealth will help support "a broad marketplace for this information, making exchange easier for hospitals, providers, and patients.”
On Thursday, athenahealth also announced financial and operational results for the second quarter of fiscal year 2011. Total revenue for the three months ended June 30, 2011 was $77.9 million, compared to $58.6 million in the same period last year – an increase of 33 percent.
“Midway through the year, we are ecstatic to see athenahealth’s growth, operations and financial house in such good order because it gives us more time, money and energy to focus on our clients,” said Bush, noting that the Proxsys acquisition "will position us to attack an additional area of inefficiency within the U.S. healthcare system, provide us with a new growth channel and enable us to offer more value to hospital systems as well as ambulatory medical groups.”
