Credit Suisse’s https://www.credit.suisse.com research shows that a financially bright future is ahead for the company Change Healthcare https://www.changehealthcare.com, developers of a leading independent healthcare technology platform that provides data and analytics-driven solutions to improve clinical, financial, and patient engagement outcomes in the U.S healthcare system.
Several trends are taking place to increase growth for the company. The growing populations of adults age 65 and older are expected to increase 34% over the same period according to the U.S Census Bureau. This population has the highest prevalence of chronic conditions.
As adults older than 65 access complex care at growing rates, providers and payers will need tools to onboard and manage this population to deliver appropriate care for medically complex patients. There will also be a need to document risk and outcomes in order to attain the appropriate reimbursement rates associated with this population.
Change Healthcare will benefit from the increasing adoption of value-based care and reimbursement models. Both public and private sectors are shifting towards alternative payment models. Many payers and providers are still building capabilities, expertise, and administrative processes to manage these changes as these payment models require a high level of documentation, robust data, sophisticated payment attribution capabilities, and advanced analytics.
In addition, the increasing consumerism of healthcare services is creating a need for personalized solutions plus cost, quality, transparency, and decision support tools. The proliferation of healthcare data has companies seeking ways to utilize data and identify insights that will improve outcomes and decrease costs for the company’s software and analytics solutions.
Change Healthcare has focused on key mergers and acquisitions that has helped fuel rapid growth. Since 2012, the company has acquired and integrated 14 businesses. Some of the major acquisitions include HealthQx and NDSC. The acquisition of HealthQx helped the company add new payers and the purchase of NDSC helped to expand customer reach and accelerate revenue growth. In addition, eRx Network presents a future M&A opportunity.
FY20 ending March 31 2020 is still a build year for Change Healthcare as the company’s revenue growth is likely to remain below its long term target of 4-6% with Credit Suisse’s estimate to be 1.2%.
Specifically, the company is taking steps this year to:
- Strengthen their Intelligent Healthcare Platform
- Transform underperforming businesses to reposition them for growth
- Create new enterprise sales capabilities
- Expand through innovative partnerships and strategic relationships
- Improve RCM service, by building out print capabilities and transforming the imaging business to an enterprise cloud-based solution
The company is the largest healthcare-focused print communication vendor in the industry with 1.3 billion pieces printed annually. However, with healthcare patients embracing digital communication capabilities and payers placing great importance on member engagement and experience plus the fact that the market has shifted over time, the company is repositioning print capabilities by shifting through investments in different technology and products.
Contact Research Analyst Jailendra Singh at jailendra.singh@credit-suisse.com for more information and/or feedback.