Physician based healthcare billing is a $3.5 billion industry serviced by over 2,000 independently owned billing companies. The top 100 companies produce an aggregate revenue of $1.3 billion while 66% of billing companies have less than $5 million in annual revenues. Overall, the healthcare industry is growing at 8% with the average expenditure person in the United States now approaching $6,500. A robustly growing, fragmented marketplace coupled with the technologic change of healthcare providers adopting Electronic Medical Records and electronic bill submission, a shortage of qualified professional and administrative staff, and increasing regulatory pressures, has made the healthcare services highly attractive to investors and deal makers alike.

Within the past year alone, GE has purchased Millbrook and IDX, Allscripts has purchased A4, Seimens has sold its outsourcing unit, CBiz has purchased TriMed, and countless venture capital dollars have been invested into the market.

For the small, independent provider this rapid change has exerted both economic and technologic pressures. Newer ASP-based technologies can now securely handle large numbers of transactions while allowing web access for physicians and billing office managers to monitor real time data. This web based, ASP approach is fueling the seamless use of offshore resources to process claim entry, customer support, and claim resolution, creating a new set of national and global competitors. Federal regulations further require smaller companies to maintain corporate compliance programs for patient privacy, EDI transactions, and security and shift the legal burden of monitoring to the service provider. Technology, cost of labor, compliance, and vertical specialty are without doubt shaping and changing the Healthcare Billing market of 2010.

Mary Knoll Capital Partners has extensive experience in working with both sellers and buyers in this growth area. We can provide assistance for companies to either access growth capital for system or staff enhancement or find the right strategic and financial partner to better negotiate the waters of change.. We are also currently retained by a well capitalized, growth firm that is actively seeking quality $3-10 million Physician Billing companies for acquisition. Please contact us for more information.