Health software company Click4Care can grow quickly. But can it grow big?

The Columbus-area technology company has quickly built a strong reputation around its software, which manages patient care and automates management requirements by health insurers. In the past two years, it's been recognized nationally as one of the country's fastest-growing small businesses, yet as Click4Care hopes to expand larger (and often better-financed), competitors are also planning to gobble up more businesses. These competitors see the same wide-open market that Click4Care does and, just like Click4Care, want to get more of the market for themselves.

POWELL, Ohio — Click4Care wants to translate fast growth into big growth.

The Columbus-area technology company has quickly built a strong reputation around its software that manages patient care and automates management requirements by health insurers. In the past two years, it’s been recognized nationally as one of the country’s fastest-growing small businesses, it recently added a new chief executive officer and took on $2 million in new investment. Late last month, it unveiled new features in its software meant to better manage patients, administrative duties and staff.

Yet as Click4Care hopes to expand larger (and often better financed), competitors are also planning to gobble up more businesses. These competitors see the same wide-open market that Click4Care does and, just like Click4Care, want to get more of the market for themselves.

“They are a very good company and there are days when we go down into the market we wonder whether we should go past Click4Care,” said Scott Storrer, the chief executive officer at MEDecision, one of the oldest and largest companies offering care-management services. “They will be a viable competitor as long as the funding is there.”

Click4Care was founded in 1999 but has really been in the market for about six years. It has developed technology so information gathered by insurers, physicians, hospitals and patients can be combined and shared. With the data in place, the company’s software, ThinkHealth, makes recommendations on treatment, predicts the possibilities of in-patient stays and automates everything from caring for patients to issues around payment. Click4Care claims its software increases efficiency to the point that a nurse can care for four times as many patients as before.

It’s an ideal time to be in the health IT business, with both an industry emphasis on cutting costs and the federal stimulus dollars available. Insurance companies have made using care management applications like Click4Care’s a “top priority,” according to a report released this month by Gartner analyst Joanne Galimi. But there’s also no clear leader among the dozen or so service providers in the market, Galimi said.

Click4Care has grown rapidly since 2005, increasing its revenue from $8.4 million that year to $11.4 million in 2008. That growth rate (35.2 percent) placed the company on the Inc. 5000 list of fastest-growing companies for the past two years. In 2007, it signed more customers than any of its 12 competitors, according to Gartner. Click4Care now employs more than 70 people.

About five months ago the company hired Rob Gillette, who also oversees HealthEdge, a Massachusetts company also funded by Click4Care’s main investors, Psilos Group. Click4Care and HealthEdge, which makes software for insurance companies, work together to offer a suite of services to health care companies. A few months after Gillette was hired at Click4Care, Psilos invested an additional $2 million in the company.

“When you try to solve health care in the United States, you have to find a way to lower the rate of inflation,” said Albert Waxman, the managing partner at Psilos and chairman of Click4Care’s board. “What Click4Care helps people do is one of the key elements in helping reduce the rate of inflation.”

Some of that new funding will be used to improve the Click4Care software to further automate functions, such as payment appeals. Keith Dayton, Click4Care’s executive vice president for sales and marketing, described the latest upgrade as an attempt to anticipate additional manual functions its customer would want to automate.

“We’re ahead of the curve because of our fully integrated platform management system,” Dayton said.

Click4Care’s relative youth may be an advantage against bigger rivals. Companies like MEDecision, founded in 1988, have had to create new software programs to adhere to new technologies and standards. Now they’re busy migrating customers to their new products.

But Click4Care’s competitors are moving quickly to take advantage of health care’s high-tech opportunities. One competitor is Trizetto, a 1,900-employee corporation that, like Click4Care, recently upgraded its software offering and is planning additional features by the end of the year. Meanwhile, another competitor, Casenet, last month closed on an additional $3 million in funding, according to a filing with the Securities and Exchange Commission.

Money is going to matter. Gartner analyst Galimi thinks smaller companies could struggle to manage their resources as they sign more contracts. The strong customer service that made upstarts so attractive could fall away as they have to serve a larger number of customers, she wrote. And installing care-management software is a complex job. It won’t be easy to rapidly increase staff to accommodate new customers.

In many cases, the competitors have access to far more resources than Click4Care. MEDecision, for example, was acquired last year by Health Care Service Corporation for $121 million, providing MEDecision with deep pockets for everything from marketing to research and development.

“We’ve got the ability to stay the course longer term,” Storrer said.

The importance of deep pockets will also go hand-in-hand with the ability to manage bodies. Many leading companies can manage anywhere from 1,000 to 2,500 people using the software at one time, according to Gartner. Click4Care can manage about 500, Gartner’s November report stated.

Waxman admits that some potential customers may see a small company and wonder: Does it have financial wherewithal to complete what it promises?

“We need to implement our software product and show that we can,” Waxman said. “We deliver to customers what we say we’re going to deliver.”

[Photo courtesy of Flickr user Southerntabitha]

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