Leading vendor of cloud-based services for physician practices
and inpatient settings,
) recently announced that Children's Hospital Los Angeles Medical
Group had chosen Athenahealth's remote medical billing offering
(athenaCollector) to improve its revenue cycle management. The
group already utilizes the healthcare related business
intelligence offerings, useful for financial reporting, provided
by Anodyne Health Partners, which is owned by Athenahealth.
Children's Hospital Los Angeles Medical Group is a
multi-specialty freestanding pediatric practice of 500 medical
practitioners. It mainly provides care at Children's Hospital Los
Angeles, cited as an outstanding children's hospital in
California and one of the best in the nation.
Athenahealth's web-based deployment provides a low-cost
scalable service while its flexible rules engine leads to higher
efficiency in claims settlement. The Software-as-a-Service
(SaaS)-based approach allows for a more flexible delivery
mechanism that is expected to help Athenahealth win deals. The
company has traditionally enjoyed high customer satisfaction
rates, which facilitates a larger number of referrals.
Athenahealth's unique business model makes it a strong
provider of RCM services (athenaCollector) designed for physician
practices. Its EHR product (athenaClinical) is a key player in
We believe that sales of athenaClinical are likely to remain
robust. In addition, the company will harness its newer products,
namely athenaCommunicator and athenaCoordinator.
The company should benefit from its extensive athenaCollector
client base, as only a minority of its subscriber base also
utilizes athenaClinical. Cross selling represents a real growth
opportunity in the near term. In this regard, Athenahealth has
made rapid strides in capturing the EHR business of physician
practices. However, this segment is shrinking, as hospitals
increasingly absorb physician's medical practices.
Athenahealth is geared to enter the enterprise segment through
its strategic alliance with
) and the acquisition of Proxsys, both completed in 2011. The
company has recently signed on, and executed several
enterprise-sized deals, which provide it with a credible and
referenceable client base.
Though the federal stimulus will gradually wind down, the
replacement market has been growing. Competition is fierce and
larger competitors may benefit from the incumbency factor.
Industry stalwarts such as
) offer long-standing seamless products integrating inpatient and
Allscripts Healthcare Solutions
) are two other well-known competitors in a crowded field.
We currently have a Neutral recommendation on Athenahealth.
The stock currently retains a Zacks #4 Rank, which translates
into a short-term Sell rating.
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