Revenue cycle management technology companies Navicure and ZirMed will merge into one company, and while financial terms of the deal have not been disclosed, the matter will likely be finalized before the end of the year, said ZirMed Chairman and CEO Tom Butts.
The combined entity -- which does not have a name yet -- will market its suite of analytics-driven solutions to hospitals, health systems and ambulatory services organizations, including physician practices, with the goal of improving financial performance.
"When you look at the landscape today, there's an enormous amount of consolidation going on among providers," said Butts. "We realized that the combination of the two organizations, and the breadth that we have in the market -- hospitals, ambulatory -- have a net kind of footprint. Being able to provide that to health systems under a single entity was a real winning recipe."
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"We have always admired ZirMed as a company," said Navicure President and CEO Jim Denny. "We had been in the same space for roughly the same time, about 20 years, and both organizations are very results-oriented. When the opportunity to acquire ZirMed came along, we jumped at the chance."
Navicure, which received an investment from Bain Capital Private Equity in 2016, specializes in medical claims management, patient payment and data analytics products which use real-time data to connect providers with payers and overhaul workflow with an eye toward boosting financial outcomes. It has received four Best in KLAS awards, including one this year.
ZirMed, meanwhile, uses a combination of predictive analytics technology and software development to help hospitals and health systems capture more revenue; the company has been Best in KLAS four of the past six years and was recently recognized with the "Peer Reviewed by HFMA" designation through the Healthcare Financial Management Association.
Denny said the combined company will have the advantage of scale, while Butts said the respective focus of each company makes for a good fit.
"When you look at the business, our platforms are very complementary," said Butts. "We know our clients are really challenged in managing the complex revenue cycle. Plus, we deploy a battery of data scientists that help us drive predictive analytics into our products that help organizations capture as much cash as possible. Today, we're delivering hundreds of millions of dollars in net cash for our. As we get more reach, we're going to have a significant impact."
Both companies have been recognized by healthcare market research firm Black Book as top performers in their respective markets.
While some details have yet to be ironed out, such as the company's name and its leadership structure, Denny said all that should be worked out by the time the deal is finalized. In the meantime, customers of both companies shouldn't expect any immediate changes.
"It's business as usual," said Denny. "Our intent is to continue to make those products available to the market."