While the federal government plans to spend more on healthcare, the fact remains that the sector will continue to remain under cost pressures. It certainly doesn't help that the US economy continues to be mired in an economic morass. But, Accretive Health has a solution: a system to manage revenue cycles for healthcare providers. In fact, because of the momentum of its business, the company plans to launch an IPO.
Accretive Health focuses on hospital chains. The deals are usually long-term relationships and involve sophisticated systems that span the entire revenue cycle. And the improvements in collections are usually signficant within 18 to 24 months.
Actually, there are no upfront costs; rather, the gains are split with Accretive Health and the customer. Yes, it's a true win-win proposition.
And, the business has boomed for Accretive Health. Net services revenues spiked 65.5% last year to $398.5 million. There are 21 customers, representing $11.9 billion in annual net patient revenue.
What's more, the market opportunity is enormous. Accretive Health believes that it is about $750 billion.
The lead underwriters on the deal include Goldman, Sachs (NYSE: GS) and Credit Suisse (NYSE: CS). The proposed ticker symbol is AH.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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