Providence forms for-profit tech, services company
Providence has launched Tegria, a healthcare technology and services company. Tegria, which will operate as a for-profit subsidiary, combines nine companies owned by not-for-profit Providence, with a focus on companies that provide services related to healthcare consulting and technology, revenue-cycle management, and software technology and platforms.
The Renton, Wash.-based health system wants to earn $1 billion in revenue from nonclinical revenue sources by 2023 to support patient care.
“Ultimately, to survive on patientcare revenue alone … may or may not happen,” said Dr. Rod Hochman, Providence’s CEO. “Why wouldn’t we diversify our portfolio?”
Providence isn’t disclosing how much annual revenue it expects Tegria to generate.
The COVID-19 pandemic pushed Providence’s already thin operating margin into loss territory in the fi rst half of 2020, with the health system reporting a $221 million operating loss in the six months ended June 30, or a 1.8% loss margin, on $12.5 billion in revenue. That’s compared with a $250 million operating gain on $12.6 billion in revenue, a 2% margin, in the prior-year period.
In Providence’s move toward creating a technology and services company, the health system partially is “taking a page” out of UnitedHealth Group’s strategy, Hochman said, looking at what Optum has done for the company. Optum, a services company with a care delivery unit that employs or contracts with 52,000 physicians, is “clearly not an insurance company.”
Tegria, which is based in Seattle, employs more than 2,500 people in the U.S. and Canada, and already serves more than 350 customers.
Initially, the nine companies will continue to operate separately. Down the line, Tegria may merge some of them.
On the healthcare consulting and technology services side, Tegria will include consulting fi rm Bluetree, which Providence acquired last year and focuses on managing Epic Systems Corp. software, and consulting fi rms Engage IT Services and Navin, Haff ty & Associates, which focus on Meditech. Providence acquired Engage IT and Navin, Haff ty in 2013 and this year, respectively.
Tegria’s consulting and tech services also encompass Community Technologies, a firm that provides Epic services to rural hospitals and clinics. The firm was developed at Providence and launched in 2009.
The other five companies in Tegria’s portfolio are revenue-cycle management firms MediRevv, Acclara Solutions and Medical Specialties Managers, and software technology and platform firms QuiviQ and Lumedic. ●