A French company has agreed to pay $690 million for Health Advocate Inc., a Plymouth Meeting company hired by employers to help their employees navigate health care — a need not expected to abate.
“The U.S. health-care system is extraordinarily resistant to major transformation, and the complexity of the system is going to continue,” Daniel Julien, chairman and chief executive of Teleperformance, said this week in response to an analyst’s question.
Five veterans of U.S. Healthcare and its successor, Aetna, formed Health Advocate in 2001 to help patients cope with bewildering complexities of health insurance and medical care.
All these years later, the need has only grown. “The U.S. health-care market is so fragmented, so complex, so difficult to navigate that 40% of Americans do not know what their plans cover,” Julien, who described himself as half American and half French, said on the conference call.
Health Advocate now counts 8,400 companies as clients and offers services to 27 million of their employees and families. It seeks to achieve better treatment results, close gaps in care, increase patient engagement, and save the employer money.
The highly profitable company had $48 million in cash profits on $139 million in revenue last year, it says. Teleperformance is based in Paris and employs 331,000 in 80 countries.
Health Advocate employs 700 people — call agents, registered nurses, counselors, and other professionals who provide direct services to beneficiaries. In addition to navigation and advocacy, the company offers what it calls health and well-being services, which are designed to help beneficiaries take better care of themselves.
Health Advocate employs 800 in total. No changes are expected in Plymouth Meeting, the company said.
The price being paid by Teleperformance is more than double the $265 million that Health Advocate fetched when it was sold in 2014 to Nebraska-based West Corp. In 2017 Health Advocate was acquired by private-equity giant Apollo Global Management LLC. Apollo decided to carve out Health Advocate from West.
Companies that use telehealth and other remote means of interacting with patients are becoming a hot ticket in the financial world.
Another Plymouth Meeting company, Accolade, which also helps individuals deal with health care and their employer-provided benefits, went public over the summer and is now valued at nearly $2 billion on Nasdaq. Teledoc paid $18.5 billion for Livongo Health, which provides remote monitoring for diabetes and other remote services.