WebMD Corp., which eases transactions between health care providers and payers, announced Monday that it plans to expand its empire by acquiring IT consultant and developer ViPS Inc. for $160 million.
Privately held ViPS, based in Baltimore, provides health care consulting and data management services. Its clients include government, Blue Cross and Blue Shield, and other health care payers.
Web MD Corp., of Elmwood Park, N.J., has made a habit of acquiring companies over the past five years, expanding its customer base so that ever-growing numbers of claims pass through it.
But some reports have predicted that an increase in direct claims filing between health care payers and providers could erode WebMD's lucrative position as a middleman.
To read more about how direct filing might ding WebMD, click here.
Since ViPS does more than claims processing, the company should help WebMD diversify its offerings. ViPS lists services including systems support, claims processing, disease management and predictive modeling.
It also has a strong presence in government services, said Jenny G. Morgan, the company's president and CEO. "ViPS' extensive experience in the government sector, when combined with WebMD's full suite of end-to-end transaction management capabilities, will enable us to expand our collective offerings to help CMS [the Centers for Medicare & Medicaid Services] and other government agencies accelerate their cost-reduction efforts and improve the effectiveness of their systems and workflow."
This sentiment was echoed by Roger Holstein, CEO of WebMD. "The integration of ViPS' capabilities will enable these [payer and employer] customers to better communicate with their members and providers about treatment and utilization issues to improve the effectiveness of care."
In various news reports, analysts lauded the acquisition, saying that ViPS would bring WebMD better access to payers and that the acquisition was not huge, particularly in light of WebMD's revenues, which approached $1 billion last year. Over that time period, ViPS posted revenues and earning of $59 million before interest, taxes, depreciation and amortization.
According to the Baltimore Sun, WebMD expects "minimal impact" on ViPS' nearly 400 employees.
The sale is expected to proceed in 30 days, pending an antitrust review.
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