Optum360, Navicure will dominate revenue cycle management vendors, Black Book says

Both companies have seen reach swell after high-profile mergers, setting them up to capitalize on new customer satisfaction scores.
By Tom Sullivan
11:50 AM
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With Navicure and Zirmed merging last week on the heels of Optum360 purchasing the Advisory Board, both newly combined organizations are well positioned to pull ahead of competitors in the revenue cycle management software space, according to a new report by Black Book.

“The vendor consolidations announced lately are creating a couple of RCM dynamos,” said Doug Brown, managing partner of Black Book.

Black Book on Monday published its 2017 Top Revenue Cycle Management Software and Services report, which ranked Optum360 as the top vendor among hospital chains, health systems and integrated delivery networks and Advisory Board first among community hospitals and inpatient facilities with 100 to 200 beds. Both won for the third consecutive year.

[Also: Running list: 2017 health IT mergers and acquisitions ]

Navicure and Zirmed, meanwhile, also earned notable accolades in Black Book’s report.

Zirmed topped the RCM software space among hospitals with more than 200 beds for the seventh straight year, while Navicure won top honors among critical access hospitals with fewer than 100 beds as well as ambulatory centers and physician practices.

“Uniting top performing revenue cycle management firms like Navicure and Zirmed, and combining Optum360 and Advisory Board will generate intense pressure on other firms like nThrive and Change Healthcare,” Brown said.

That’s where things get interesting. Black Book also said that previous studies, conducted in 2014 and 2016, found that only about half of mergers in the health IT space deliver on the intended improvements.

Both nThrive and Change, in fact, have made multiple acquisitions. nThrive bought Precyse, MedAssets and Adreima, all three of which Black Book ranked as market leaders in product and services lines prior to being acquired. Operating now as nThrive, however, the marketing communication and brand recognition ratings fell, along with its trust, accountability and transparency scores, Brown added.

Change, which scooped up McKesson RelayHealth and Altegra, also dropped, Brown said, and did not place in the top 10 for software or managed services.

Brown explained that the scores were not related to product performance, reliability, technical issues or innovation. Instead, it’s a matter of perception about corporate transparency, customer management, executive level changes — and the reality that merging companies of all stripes often fail to prioritize client retention as much as they should.

Whether Optum360 adding Advisory Board and Navicure merging with Zirmed will experience similar challenges or not remains to be seen.

“Pre-merger hype does not always live up to post-merger reality,” Brown said. “Mergers aren't easy, and they raise real risks that customers may jump ship.”

Twitter: SullyHIT
Email the writer: tom.sullivan@himssmedia.com