Netsmart CEO Mike Valentine
Get ready to learn a “new” name in home health IT: Netsmart Technologies.
It’s actually not a new name; it’s been around for more than 48 years, focusing on behavioral health and social services. Now, it’s getting into the home healthcare segment as part of a $950 million sale.
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Most notably, health IT powerhouse Allscripts Healthcare Solutions is shifting its Allscripts Homecare unit to Netsmart. That technology — including the Allscripts Homecare EHR and related mobility products — is being rebranded as part of the Netsmart CareFabric suite of electronic health records and management software.
Netsmart and Allscripts said that the deal creates the nation’s “largest technology company exclusively dedicated to human services and post-acute care.” That means anything in healthcare outside of hospitals and physician offices, including behavioral health, Netsmart spokesman Kevin Allen said from company headquarters in Overland Park, Kansas.
“In the post-[Affordable Care Act] world, with ACOs, the organization is fully focused on post-acute care,” said Rich Elmore, senior vice president for corporate development and strategy at Allscripts.
The expanded Netsmart now has more than $250 million in annual revenue and more than $60 million in annual operating income, according to Allscripts. The EHR giant disclosed in an 8-K filing with the U.S. Securities and Exchange Commission that it also made a $70 million cash investment in Netsmart.
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Joining the partnership is private equity firm GI Partners, also based in Chicago, to buy Netsmart from previous owner Genstar Capital. According to the 8-K, Allscripts will become the largest owner of Netsmart, while Netsmart executives also made investments, CEO Mike Valentine said. No entity will hold a majority stake in the company, which is being called a joint venture.
Valentine said that the expansion into home care has been in the works for a while, as has a sale of the company. After exploring outright sales and an initial public offering, Netsmart decided to accept the Allscripts-GI Partners offer.
“We viewed it as a path to get into another, adjacent market,” Valentine said. “Our strategy has long been to focus on this [post-acute] market.”
This month’s announcement at HIMSS16 that the federal government would provide Medicaid incentives for long-term care and behavioral health reinforced the decision. “That just gave us tailwinds for our strategy,” Valentine said.
Those segments of healthcare had been excluded from the Meaningful Use EHR incentive program.
Photo: Netsmart Technologies
