- Healthcare revenue cycle management vendors Navicure and ZirMed recently announced that the organizations signed a definitive agreement to merge.
Navicure will supposedly acquire ZirMed in a deal that values at about $750 million, sources told Reuters. Neither company responded to a request for comments.
The companies plan to respond to the changing healthcare market by operating as one to offer hospitals, health systems, and ambulatory services organizations a more comprehensive suite of revenue cycle management tools. By combining forces, the vendors aim to provide a data analytics-driven spread of solutions that aid financial performance.
The consolidated healthcare market drove a recent round of lay-offs at ZirMed. The vendor laid off 60 employees in March 2017, the Louisville Business First reported. The company’s Chief Financial Officer Jim Lacy attributed the lay-offs in the 670-person company to the changing healthcare market.
Over the last five years, the number of providers employed by hospitals or health systems rose from 45 percent to 85 percent, Lacy stated. ZirMed started by primarily working with small and mid-sized provider organizations, but the recent consolidation via hospital employment meant that ZirMed needed fewer employees to work with a smaller group of clients.
By the end of May 2017, ZirMed started a process to sell the business by launching a competitive bidding process, the local new sources stated.
Through the merger, the companies expect to be better positioned to respond to new healthcare demands, such as cloud-based revenue cycle management solutions, the vendors stated.
“We are combining two double-digit growth healthcare revenue cycle technology providers with exceptionally strong reputations for product innovation and client satisfaction,” stated Jim Denny, President and CEO of Navicure. “Together, Navicure and ZirMed will provide the highest-rated customer experience to more than 400,000 providers and healthcare organizations.”
The CEO and Chairman of ZirMed also assured stakeholders and customers that he expects minimal issues to arise from the merger.
“We expect a smooth transition as we combine these two revenue cycle platform leaders and maintain our shared commitments to our clients, partners and employees,” said Tom Butts, Chairman and CEO of ZirMed. “ZirMed has built and delivered an unparalleled, fully-integrated technology platform that scales to support the largest and most complex healthcare providers and systems. By joining forces, our two companies are ensuring that providers across all segments are more empowered than ever to optimize their revenue cycles.”
Both companies recently received recognition as top vendors in the healthcare revenue cycle management solution field from Black Book Market Research. Surveyed healthcare leaders ranked Navicure as the top end-to-end revenue cycle management software and technology company among small hospitals with fewer than 100 beds.
ZirMed took top marks in the end-to-end revenue cycle management vendor category for healthcare organizations with over 200 beds.
Both companies also received industry recognition from KLAS, with Navicure earning four Best in KLAS awards in 2017 and ZirMed being named Best in KLAS in four of the past six years.
Navicure and ZirMed anticipate the merger to be complete by the end of 2017.
The companies plan to keep their existing locations in Duluth, Chicago, and Louisville and Both vendors will continue to operate as separate brands until the transaction is closed.