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TriZetto, a Colorado-based healthcare IT company, is being walked around for a $3 billion sale by its private equity owner Apax Partners. According to a report by Reuters, London-based Apax asked JP Morgan to help facilitate the sale and buyers may include another IT firm or private equity group. According to sources in 2013 TriZetto had 12-month earnings of $190 million before interest, tax, depreciation and amortization.
Healthcare IT is booming as market and regulatory pressures are forcing the inefficient industry to trim wasteful processes. TriZetto manages and attempts to streamline the increasingly complex network of insurance claims and billing that healthcare providers are forced to deal with. Pressure for healthcare providers to align their workflow with government regulations has stepped up in recent years as the Affordable Care act slowly is comes into forced. Additionally, competitive price information showing up on the Internet is forcing hospitals to improve customer service.
Because employee provided insurance schemes mostly pay for healthcare, transactions in the industry are more complex and less consumer friendly then other industries. Patient choice is relatively limited and the pay-by-insurance model has had the ill effect of insulating the industry from the need to provide customer service. This further reflects in the industries’ billing processes. Without patients advocating for their own medical services and looking for competitive alternatives, healthcare arrangements often do not reflect the best interest of the patient, or the most efficient process for providing and paying for care.
That may be changing thanks to the Internet’s ability to spread information about better healthcare customer service and the Affordable Care Act’s push for more higher-deductible health insurance plans, which will shift the immediate payment burden to patients, giving them increasing incentive to mind expensive and inefficient care. As these pressures mount companies like TriZetto may be in good position to help straighten out the industry.
Founded in 1997, TriZetto had in IPO in 1999. It was later put under private ownership when private equity firm Apax bought the company in 2008 for $1.4 billion. The company claims its software interacts with over half of the insured population in the United States and serves over 230,000 care providers. Based in Englewood, CO TriZetto has over 3,800 employees worldwide.
