HMS Holdings Acquires Eliza for $170 Million to Enhance Precision Payment and Patient Engagement Capabilities

HMS is a U.S.-based precision payment services provider that primarily helps clients identify unreasonable expenditures, such as administrative waste and overutilization of medical services, and charges a percentage of the savings generated. Its healthcare clients are mainly payers, including insurance companies and health plans. Eliza, on the other hand, is a patient engagement management company whose intelligent analytics tools significantly improve patient adherence, thereby enhancing members’ healthcare experiences while also helping insurers and health plans reduce costs. This acquisition will enable HMS to adopt a dual-pronged strategy, strengthening both capabilities to deliver more comprehensive services to payers.

Recently, HMS Holdings, a Texas-based precision services provider, announced that it would acquire Eliza, an industry-leading “patient engagement” company, for $170 million in cash. This transaction will further expand its analytical capabilities in member health and care management. The company expects the acquisition to be completed in the second quarter and stated that the deal will boost its earnings in 2017.

HMS was first established in 1974 and was listed on NASDAQ as early as 1992. As of March 20, its market capitalization stood at approximately $1.54 billion, although its share price has fallen by nearly half from its peak in 2012.

Data shows that waste in the U.S. healthcare system has reached an outrageous level—amounting to as much as $1 trillion annually. Based on the total U.S. healthcare expenditure of $3.2 trillion in 2015, waste accounted for one-third of the total. This waste stems from various factors, such as extremely complex reimbursement procedures and inaccurate submissions by healthcare institutions (which some data suggest alone amount to hundreds of billions of dollars).

HMS’s subsidiaries provide precise payment analytics software tools to various payers, preventing improper payments. In simpler terms, they combat fraud for U.S. government healthcare programs and private health insurers.

Its clients include government Medicaid agencies, government healthcare institutions and health plans, commercial insurance companies, government and private employers, as well as other health payers and donors. Its services help clients avoid and recover improper payments, prevent future improper payments, reduce fraud, waste, and abuse, and ensure compliance.

Eliza, founded in 2000, is a pioneer in the field of “patient engagement” management companies and also claims to be an industry leader. Currently, the company has over 200 employees and more than 130 clients, with eight of the top ten health plans in the United States being among Eliza’s customers.

Eliza leverages its SaaS platform and “intelligent analytics” to determine the optimal methods for delivering information to each customer—such as the best time of day and the most effective channel, whether via SMS, phone calls, emails, direct mail, websites, or mobile apps. This enables Eliza to help its clients—including employers, health plans, hospitals, pharmacies and clinics, and pharmacy benefit managers (PBMs)—meet diverse needs across various scenarios, such as improving medication adherence, by engaging patients in their own health management through the right approach at the right time.

Alexandra Drane, founder of Eliza, previously stated to MobiHealthNews: “We have a patient engagement and health management platform that tells us what actions should be taken for a given patient, and we then leverage all available channels to the fullest extent possible.”

According to foreign media outlet MobiHealthNews, there are multiple reasons behind HMS’s high-value acquisition of Eliza. In particular, Eliza has established strong business partnerships with many of the largest U.S. health plans, including government programs such as Medicare and Medicaid. It provides these health plans with a suite of tools that not only enhance member consumer experience but also boost revenue and renewal rates, while simultaneously improving the quality and cost-efficiency of healthcare delivery.

Eliza’s proprietary predictive analytics, behavioral science, and data-driven methodologies, employed in its cloud platform, have helped the company accumulate more than 50 domestic and international patents and patent applications (all of which will belong to HMS following the acquisition).

HMS Chairman and CEO Bill Lucia stated in a press release, “Payers are seeking reliable insights and actionable information to manage risk and improve the quality of healthcare. With Eliza’s support, HMS will be positioned to simultaneously influence both the revenue and costs of its clients, such as health plans, while continuing to provide the tools needed to more effectively manage their members’ needs across various healthcare markets. This acquisition also represents an additional, in-development segment entering our strategic expansion roadmap—namely, analytics and risk management in the healthcare and population health sectors—and will facilitate potential short- and long-term revenue growth for HMS. We also believe that leveraging Eliza’s operational assets and analytical tools will certainly strengthen the delivery of our core products.”

Lucia also specifically highlighted the synergistic and additive value of Eliza’s tools in conjunction with HMS’s other specialized tool products, particularly Essette, the population health company it acquired in September 2016.

“Eliza demonstrates both scientific rigor and artistic finesse in driving member engagement in health management, making it an excellent complement to the EssetteSuite health and population management technology platform. It enables clients to take effective action to bridge gaps in healthcare, while also providing significant opportunities to multiply the efficiency with which we mine and leverage the HMS database,” said Lucia.

HMS is a U.S.-based precision payment services provider that primarily helps clients identify unreasonable expenditures, such as administrative waste and overutilization of medical services, and charges a percentage of the savings generated as its service fee. Its healthcare clients are mainly payers, including insurance companies and health plans. Eliza, on the other hand, is a patient engagement management company whose intelligent analytics tools significantly improve patient adherence, thereby enhancing members’ healthcare experience while also helping insurance companies and health plans reduce costs. This acquisition will enable HMS to provide more comprehensive services to payers by strengthening both its cost-containment and patient-engagement capabilities.

Recently, HMS Holdings, a Texas-based precision services provider, announced that it would acquire Eliza, an industry-leading “patient engagement” company, for $170 million in cash. This transaction will further expand its analytical capabilities in member health and care management. The company expects the acquisition to be completed in the second quarter and stated that the deal will enhance its earnings in 2017.

HMS was founded in 1974 and listed on NASDAQ as early as 1992. As of March 20, its market capitalization stood at approximately $1.54 billion, although its share price has fallen by nearly half from its 2012 peak.

Data indicates that waste in the U.S. healthcare system has reached an alarming level—amounting to as much as $1 trillion annually. Based on the total U.S. healthcare expenditure of $3.2 trillion in 2015, waste accounted for one-third of the total. This waste stems from various factors, such as extremely complex reimbursement procedures and inaccurate submissions by healthcare institutions (with data suggesting this alone amounts to hundreds of billions of dollars).

HMS’s subsidiaries provide precise payment analytics software tools to various payers, preventing improper payments. In simpler terms, they combat fraud for U.S. government healthcare programs and health insurance companies.

Its clients include government Medicaid agencies, government healthcare institutions and health plans, commercial insurance companies, government and private employers, as well as other health payers and donors. Its services help clients avoid and recover improper payments, prevent future improper payments, reduce fraud, waste, and abuse, and ensure compliance.

Founded in 2000, Eliza is a pioneer in the field of “patient engagement” management companies and also claims to be an industry leader. The company currently has over 200 employees and more than 130 clients, including eight of the top ten health plans in the United States.

Eliza leverages its SaaS platform and “intelligent analytics” to determine the optimal methods for delivering information to each customer—such as the best time of day and the most effective channel, whether via SMS, phone calls, email, direct mail, websites, or mobile apps. This enables Eliza to assist its clients—including employers, health plans, hospitals, pharmacies and clinics, and pharmacy benefit managers (PBMs)—in meeting diverse needs across various scenarios, such as improving medication adherence, by engaging patients in their own health management through the right approach at the right time.

Eliza founder Alexandra Drane previously stated to MobiHealthNews, “We have a patient engagement and health management platform that tells us what actions should be taken for a given client, and we then leverage various channels to the fullest extent possible.”