Bravo Health – Venture Capital Backed Medicare Senior Health HMO Carrier Sees Profits of 1 Billion for 2009

One more interesting article here about the huge profits made by companies providing HMO services and according to the article here, the major backbone of revenue lies within Medicare supplement plans.  Organizations of such of course are very much alive and watching the healthcare reform movement before they can even think of an IPO and discuss the liquidity of the company.  

Certainly if an IPO opportunity became available then we bring stock holders into the picture, along with the responsibilities to the Venture Capitalists who are already in heavy here and from the headline posted above it appears they should be enjoying some returns on their investments.  The company also offers prescription drug plans in 43 states so from a profitability stand point only, it would appear to be very profitable to align your business with one or more of the hugely profitable pharmacy benefit managers.  See how Medco faired for the 3rd quarter. 

Medco Health Solutions $14.8 Billion 3rd Quarter Profit – Automation Is Part of Their Solution

The VC investors of course would love to see an IPO to get some cash.  Once on the market we have one more company for profit on the stock exchange and the continuing focus on “profit” versus a true healthcare focus.  One more thought here is that when you look at where the money comes from, again we are back to government subsidies with Medicare again, so those who think there’s not a lot of government money falling into private companies, think again as here’s one company who built their business models around HMO services for seniors.  A couple weeks ago they announced the patient-care website to work with both their Medicare and Medicaid members.  They also use electronic services from Emdeon to check for eligibility.  Emdeon is another 3rd party company that supplies business intelligence software to hospitals, providers, etc. in the area of claim payments and more.  Here’s a part of the package is that is marketed, “Denial Manager”.  You might want to read up and check this out.

Healthcare claim denied, there’s an app for that in managing denial processes, quote from the website below, “streamline” denial management.  Makes you wonder as a consumer at times when disputing denied claims how you can stack up your information as you need to just get care, but this is the reality of some of the processes denied claims go through and the business intelligence strategies created for ultimate risk management that consumers have to battle, the algorithms of healthcare for profit.  BD 

“The Emdeon Denial Manager solution allows providers to organize and manage remittance inventory; helps staff arrange, prioritize and monitor denials and underpayments; and allows the accurate reporting and viewing of the denied and adjusted amounts. With the information produced by Emdeon Denial Manager, providers streamline the denial management process by determining root causes, patterns and process breakdowns responsible for denials, and establishing corrective steps to prevent future revenue loss or delay.”

Bravo Health Inc. did something in 2009 that most venture-backed companies can only dream about: It had revenue of more than $1 billion. Yes, that’s right, billion.

To put that into perspective, Google Inc. had revenue of $963 million in 2003, the year before it went public.

Even more impressively, Bravo, which up until 2007 was known as Elder Health, is projecting that revenue in 2010 could be close to $2 billion, said Charles “Chip” Linehan, a general partner at New Enterprise Associates, who co-founded the Baltimore company in 1995 with health care industry veteran David Carliner. The company, according to Linehan, also is generating solid profits.

Initially backed by NEA, Frontenac Company and Coleman Swenson Hoffman Booth, the company for its first five years was “bumping along” while growing its business, said Linehan. Things, however changed some eight years ago when an insurer that Bravo was working with decided to exit from the Medicare business in Maryland.

Since its founding, the company has raised roughly $150 million in venture financing, according to Dow Jones VentureSource of which $118 million has come since the the recap, including a $52 million round in 2004 and a $49 million round in ‘07. The company’s venture investors would obviously love to see an IPO, but are willing to let things play out in Washington.

The $100 Million Revenue Club: Bravo Health - Venture Capital Dispatch - WSJ

Technorati Tags: Bravo health, Medicare Advantage, Medicare HMO, healthcare reform, venture capital, invesments, IPO, profits, busines models, Congress, algorithms