Specialist
Former EVP at Zelis Healthcare
Agenda
- Key trends within the healthcare revenue cycle management and payment services sector
- Contracting environment, customer stickiness and competition around winning accounts
- Competitive landscape including Zelis Healthcare’s relative positioning vs MultiPlan (NYSE: MPLN), Optum (NYSE: UNH) and Change Healthcare (NASDAQ: CHNG)
- M&A dynamics, including Zelis’s recent acquisition of Sapphire Digital
- 2022 outlook – leadership changes, large health system consolidation, strategic assessments and potential exit opportunities
Questions
1.
What major trends and developments have you been following in the healthcare payments and RCM [revenue cycle management] market over the past year or so?
2.
How much of a material issue is bad debt for providers in the US? Given the pandemic’s economic ramifications, do you anticipate increasing levels of bad debt? What could be the trickle-down effect on demand for payment and revenue cycle solution vendors such as Zelis?
3.
How are you assessing the shift from post-pay to pre-payment integrity from a provider receptiveness and financial opportunity perspective?
4.
What are your thoughts on how the No Surprises Act, set to take effect 1 January 2022, may affect RCM players? How might this regulatory development change the operating environment and product offerings for some payments companies?
5.
What are your thoughts on the appointment of Amanda Eisel as Zelis’s new CEO in August 2021? How do you anticipate the company’s strategic direction to evolve under her leadership?
6.
How sticky are Zelis’s customer contracts typically? Are there substantial switching costs moving between vendors and what can the company do to strengthen these relationships and increase retention?
7.
How would you assess Zelis’s efforts to diversify its customer base and reduce concentration on major accounts? Do you consider customer concentration a material issue for the company?
8.
How much additional cross-selling opportunity do you expect for Zelis across segments? How can the company maximise the revenue capture here, perhaps via leveraging synergies across the payments life cycle?
9.
How are margins trending in Zelis’s payments business? Are you noticing any downward pressure or compression due to commoditisation? What’s the potential bottom-line impact for Zelis?
10.
How lean would you say Zelis is running? Is there any low-hanging fruit the company could target in payments or otherwise to become more operationally efficient and preserve margins?
11.
Could you discuss how technological developments such as AI and machine learning are changing RCM analytics methods? How would you frame these innovations’ cost-saving potential?
12.
How would you assess Zelis’s competitive positioning against names such as R1 RCM, Optum, MultiPlan and Cotiviti? What niche does Zelis occupy in this market and how is the company differentiated?
13.
How should Zelis approach selling into UnitedHealthcare accounts that have Optum, Naviguard, and Change Healthcare under the same umbrella, assuming the Change Healthcare deal gets DoJ [Department of Justice] approval? Do you consider this business completely lost or is there any way Zelis can gain traction here?
14.
How much of an uphill battle does a name such as MultiPlan have in retaining United as a large customer? How might the dynamics we discussed trickle down to affect MultiPlan?
15.
How do you think Zelis Payments is positioned vs names such as Echo, Payspan and VPay? How are you assessing the competitive dynamics in that segment?
16.
What are your thoughts on Zelis’s recently completed acquisition of Sapphire Digital, a leading platform for provider selection, patient access, pricing transparency and digital consumer navigation? What strategic advantages can Zelis leverage from Sapphire’s solution and its existing customer base?
17.
Do you expect any material integration challenges merging Sapphire Digital with the existing Zelis platform? How complementary are the two entities around integration?
18.
Which areas might Zelis target next for inorganic growth? Could any particular names be attractive take out targets to continue building out a full suite of revenue cycle solutions?
19.
What are your thoughts on increasing consolidation of large health systems and how might this affect Zelis’s sales cycle and contracting environment? Could there be any downward pricing pressure or challenges converting accounts as health systems become increasingly aggregated?
20.
Where do you expect Zelis’ business to head over the next several years? You mentioned the IPO route as a potential exit, as well as acquisition by a competitor such as Optum. Could you discuss the scenario implications here?
21.
Is there anything else that might be especially important to highlight when thinking about Zelis? Do you have any final thoughts?
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