Asset buys expand services of HBOC, Virtual Health
By DON LONG
Healthcare InfoTech Managing Editor
Rather than its usual practice of buying an entire company, healthcare information giant HBO & Co. (HBOC; Atlanta) satisfied its acquisition urge this past week with merely an asset purchase. Similarly, Virtual Health (also Atlanta), an Internet-based health information company, made an asset purchase to expand its physician management services.
HBOC’s acquisition was made by its Access Health Group, paying $38 million in cash for the triage clinical assessment guidelines and protocols of the Healthline call center of Foundation Health Systems (FHS; Los Angeles), the country’s fourth-largest, publicly traded managed healthcare company.
The purchase also includes terms of a 10-year agreement calling for Access Health to provide call center services to an additional four million enrollees in FHS’s health plans and continue to serve the enrollees currently covered by FHS’s government contracts division.
FHS President Jay Gellert said that his company made the sale because it "did not have the necessary scale to be cost-effective in the call center business. The agreement with the Access Health Group secures a long-term relationship with the leading provider of call center services."
He added that the sale would enhance his company’s emphasis on its primary strategy "to focus on our core health plan, specialty and government operations." He added that the cash it would receive from the sale will be used to reduce FHS’s corporate debt.
Besides adding four million lives to its call services, Access Health purchased the clinical software algorithms of FHS’s Fourth Generation medical management system used to triage patients over the telephone, according to Monica Brown, spokeswoman for HBOC.
"We already have some very robust algorithms," Brown told Healthcare InfoTech, "but those of the Fourth Generation system expand what we can do."
Using the company’s software products, Access Health staffers are able to provide its clients information concerning health management or direct them to health facilities which will provide the most appropriate care.
Joe Tallman, senior vice president and general manager of HBOC’s Access Health Group, noted that his company has worked with FHS since 1995 to provide call center services for its Civilian Health and Medical Program- Uniformed Services (CHAMPUS), "and we look forward to serving them and all FHS members in the years to come."
The guidelines and algorithm protocols of the Fourth Generation system were the only portion of that system purchased by HBOC. All other parts will be retained by FHS, according to Jay Gellert, FHS’s president and CEO. "We continue to evaluate the potential of Fourth Generation to improve the management of care and contain its cost increases," Gellert said.
In its asset deal, Virtual Health purchased the Elec tronic Medical Record (EMR) system of John Deere Health Care (JDHC; Moline, IL), a large managed care company. The JDHC EMR is a computerized patient medical record which physicians can use to track information related to patient demographics, medications, health risks and treatment plans. Development of the system has been ongoing since 1993, according to JDHC. Terms were not disclosed.
Wallace Willoughby, CEO of Virtual Health, said the system offered his company "a vision of how healthcare will be practiced in the future, and it was consistent with the vision of Virtual Health." He said that Virtual Health will integrate the EMR into its Internet-based Health Management Suite and, when combined, the enhanced product will offer innovative messaging and workflow features.
The deal provides for the two companies to work together, with Virtual Health assisting JDHC in the development of data mining capabilities and the delivery of information using its Health Management Suite.
Virtual Health recently announced its merger with Extracorp, a national provider of electronic data interchange services to healthcare organizations. The two companies will create a new firm to be named VHx.
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