Despite various reforms, health care still represents a growing part of the U.S. economy -- consuming about 16% or $2.1 trillion of GDP. In fact, the growth rate is expected to be about 6.7% per year until 2017 (amounting to $4.3 trillion or 20% of GDP).

A big component of these expenditures is administration (representing about $360 billion or so). And, this is what Emdeon is focused on. The company has recently filed to go public.

Basically, Emdeon provides revenue and payment cycle management solutions. This involves connecting payers, providers and patients. Some of the capabilities include pre-care patient eligibility and benefits verification, claims management and adjudication, payment distribution, payment posting and denial management, and patient billing and payment collection.

All in all, Emdeon has built a solid platform. Last year, revenues came to $808.5 million, with adjusted EBITDA of $182.8 million (90% to 95% of revenues are recurring in nature). The company's system processed 3.7 billion transactions last year.

Emdeon is backed by two major private equity firms: General Atlantic and Hellman & Friedman LLC. And the lead underwriter is Morgan Stanley (NYSE: MS).

You can locate the prospectus at the SEC website.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website.

This morning's Wall Street Journal [subscription required] reports that Providence Equity Partners bought an $830 million stake in a privately-held Internet comparison shopping company. (Click here for my colleague, Tom Taulli's, perspective on this deal.) This could signal a top in the private equity cycle for two reasons:

• Private equity's loosening investment standards. In the past, a consistently profitable Internet company would be best off tapping the public markets in an IPO. NexTag's decision to take private equity instead of the IPO or corporate acquisition -- e.g., getting bought by Microsoft Corp. (NASDAQ: MSFT), Yahoo Inc. (NASDAQ: YHOO), or IAC Interactive Corp. (NASDAQ: IACI) -- markets suggests surprising weakness there, or a private equity market whose lax investment standards make it willing to pay more than public equity investors for NexTag.
• Scrambling out of the comfort zone. Providence Equity has typically made purchases of traditional media companies. Its move into the Internet business could either signal it no longer perceives that traditional media companies are worth taking private, that consumer Internet companies have greater appreciation potential, or that the hidden details of this particular deal were just too good to pass up. But NexTag's market is highly competitive (e.g., there are many competitors such as Lowermybills, Lending Tree, Pricegrabber, Bizrate, Shopzilla, and Bankrate) and these competitors must deal with significant business risks (such as changes in interest rates -- much of NexTag's business is mortgage related -- and disruptive technologies). It is unclear what unique sources of competitive advantage Providence Equity brings to NexTag as it faces these business challenges.

Providence Equity's deal appears to be a rich one. Its 66% stake in NexTag -- which operates sites in the U.S. and U.K. that allow 11 million consumers a month to find the best prices on products and services sold online by Web retailers -- values the San Mateo, CA company at $1.2 billion. NexTag's website claims that it operated profitably in every one of 15 straight quarters through July 2005. But in the absence of specific revenue and profit information it's difficult to know whether Providence Equity's price makes sense.