Leading vendor of cloud-based services for physician practices
) recently reported it had expanded its relationship with Cogent
HMG under which the latter will further utilize revenue cycle
management (RCM) offerings.
The longer-term utilization will support overall growth at
Cogent HMG by optimizing revenue cycle management for its
Medical practitioners at Cogent HMG will be largely freed from
administrative hassles. They may then focus on delivering high
quality medical care. Twin advantages from Athenahealth's offerings
include a drop in time required to pay a claim and higher
By aligning itself with Athenahealth's services, Cogent HMS has
derived benefit from its proprietary rules engine which can detect
and correct errors. Athenahealth also provides benefits in critical
areas such as credentialing and resolution of claims.
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 small physician
practices. Its EHR product (athenaClinical) is a key player in
We believe that sales of athenaClinical are likely to remain
robust, given the opportunity for physicians to earn incentive
payments under the federal stimulus. In addition, the company will
harness its newer products, namely athenaCommunicator and
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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.
Tennessee-based Cogent HMG is the country's biggest hospitalist
entity. It is engaged with over 120 hospitals in its endeavor to
create top-class hospitalist and intensivist offerings.
We have a long-term Neutral recommendation on Athenahealth. The
stock currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating.