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athenahealth To Acquire MedicalMessaging.net

August 4, 2008 News 8 Comments

Physician services vendor athenahealth will acquire the assets of patient messaging service vendor Crest Line Technologies, doing business as MedicalMessaging.net of Rome, Georgia for $7.7 million in cash, the company announced after the market close today.

MedicalMessaging.net, a partner of athenahealth since last fall, provides hosted telephone and e-mail communication between practices and patients, managing appointment reminders, prescription transactions, and test results for customers in 13 states.

athenahealth also reported Q2 results after the market close today. Revenue was up 35% and earnings of $0.11 per share beat consensus estimates of $0.09.

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Currently there are "8 comments" on this Article:

  1. Don’t know much about MedicalMessening.net but no suprise at all. If you a vendor in the ambulatory EMR space, you better partner with somebody (GE and Sage have done with Kryptiq’s ConnectIQ suite), buy somebody (McKesson’s acquisition of Relay Health and this acquisition), or have your own proprietary solution (Epic with MyChart app).

    Real difficulty is going to be teasing out what is really gone on with patient portals though and their functionalities. Convulated and a bunch of different angles/plays right now.

  2. spelling aside on the site, this is a nice service/tech transaction as it is becoming very clear ATHN is adding another “service” into their network that can add value and per doc collections – their whole ballgame. remember they are not a software outfit so third party add ons/partnerships don’t work for them – i am sure they will look to leverage this service to not only do basic front office workflow (drive down no show rates etc) but advanced patient outreach like disease mang with their payor partners – things docs/staff don’t have time or incentive to do now with “functionality” like patient portals that don’t get used within PMIS/EMR software. What if they could drive higher collections for various compliance for docs on their network through this with various payers? Granted this is all from an investor standpoint.

    i like the move and their quarterly number even better. Given the street is projecting accelerated 2H 2008 numbers this move will only add to their growth rate in the face of stagnant movement by MDRX CERN and QSII

  3. CERN has rev growth of 4% to ATHN 35% and is now looking to life sciences and other verticals

    MDRX has missed so many times I have lost count and the street has no faith in Tullman – I will consider their quarter a success if they are in-line tomorrow, lets just hope they can find some life in the Misys base that even Misys hasn’t been able to harvest in the past few years with their products or others, let alone an EMR as buggy and functionality heavy at v11 – misys’ base consists mainly of small to mid-sized groups that are better suited to healthmatics which could/would lower MDRX bookings potentially if they are even successful in cross selling

    ATHN is the only growth play in all of HIT – but not a fan of CEO Bush – QSII looks good too but still depends on the liscence model which brings in too much volatility for my taste

  4. Well, if you finance guys really want to talk about wants this means I imagine the revenue potential will be about $500-$750/annually per doc that signs on. Basically, in the ballpark for their competitors for a similiar service. Maybe a bit less initially since they will have less work functionalities capability at the out set.

    So you figure from Athena Health’s install base yesterday of slightly over 10k docs 13k providers), they have a pretty good and growing footprint to work with given that only 100 AthenaHealth docs on the MedicalMessenging System. Being incredibly conservative, lets says that AthenaHealth gets 250 docs on the system at $500 a pop, that is about only $200k annually in revenue BUT there is a huge (and growing footprint) to work with here.

    More importantly, as this service expands in importance and AthenaHealth integrates more with their software and adds additional functionality, they can begin to ramp up the price a bit. Additionally, the market opportunity for this service is huge considering that there are about 600K ambulatory docs right now in the U.S. and you figure at $500 a pop annually and you get $300M market opportunity. Definitely an area of real growth.

  5. One correction – AthenaHealth has 100 “practices” and not 100 docs/providers. Figure then they probably have 300-400 providers on the MedicalMessenging system already and you figure if they hare able to get 700-800 providers on by the year-end that isn’t a bad start. Still plenty of practices to penetrate on AthenaHealth’s growing network.

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