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

Posted Feb 06 2010 12:29pm

One more interesting article here about the huge profits made by companies providing HMO services and according to the article herethe 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 caimagen 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 picturealong 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 onlyit 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. 

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 fromagain we are back to government subsidies with Medicare againso those who think there’s not a lot of government money falling into private companiesthink 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 hospitalsprovidersetc. 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 deniedthere’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 carebut 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 battlethe algorithms of healthcare for profit.  BD 

“The Emdeon Denial Manager solution allows providers to organize and manage remittance inventory; helps staff arrangeprioritize 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 Managerproviders streamline the denial management process by determining root causespatterns and process breakdowns responsible for denialsand 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. Yesthat’s rightbillion.

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

Even more impressivelyBravowhich up until 2007 was known as Elder Healthis projecting that revenue in 2010 could be close to $2 billionsaid Charles “Chip” Linehana general partner at New Enterprise Associateswho co-founded the Baltimore company in 1995 with health care industry veteran David Carliner. The companyaccording to Linehanalso is generating solid profits.

Initially backed by NEAFrontenac Company and Coleman Swenson Hoffman Booththe company for its first five years was “bumping along” while growing its businesssaid Linehan. Thingshowever changed some eight years ago when an insurer that Bravo was working with decided to exit from the Medicare business in Maryland.

Since its foundingthe company has raised roughly $150 million in venture financingaccording to Dow Jones VentureSource of which $118 million has come since the the recapincluding a $52 million round in 2004 and a $49 million round in ‘07. The company’s venture investors would obviously love to see an IPObut are willing to let things play out in Washington.

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