British credit data provider Experian to acquire Passport Health for $850 mn

British credit data provider Experian today said that it would acquire US healthcare data firm Passport Health Communications for $850 million.

Experian is acquiring Passport Health from private equity firms, management and employees.

Founded in 1996, Passport Health provides services to healthcare providers across all 50 US states, helping them manage the administrative tasks associated with obtaining payment for healthcare services.

Passport Health is a data and software provider, with sales to over 2,500 hospitals in the US and more than 9,000 other healthcare providers. Its products are used by healthcare providers to manage payments between patients, commercial payers, such as insurance companies and government programmes.

The Tennessee-based company's services include verifying a patient's identity and ability to pay, estimating a patient's bill and establishing a patient's eligibility for financial and charitable aid.

It also has access to considerable sources of healthcare payments and claims data, spanning a ten year period.

Experian said that the US Healthcare industry is a $3 trillion industry that consumes approximately 18 per cent of US GDP.

The administrative tasks associated with obtaining payment for healthcare services have become increasingly costly for healthcare providers and to reduce costs, hospitals are increasingly relying on data and analytics in order to automate the billings cycle and to make it more efficient.

This is driving a period of accelerated growth in the US healthcare payments market with spending by hospitals of $1.9 billion in 2012, forecast to reach over $3 billion by 2017.

The acquisition of Passport Health will significantly expand Experian's market reach, and increase the number of hospitals served from 500 to nearly 3,000, representing approximately 45 per cent of hospitals in the US.

Experian's portfolio will also expand from 14 to 28 products, creating a full-suite covering the entire healthcare payment process.

Commenting on the acquisition, Don Robert, CEO of Experian, said, "Since entering the US healthcare payments market five years ago, we have steadily expanded our position through both organic investment and acquisition, and our business is growing strongly. We are now taking the next step and the acquisition of Passport Health will make us a clear leader in this high growth and attractive market.''

Experian entered the US healthcare payments sector in 2008 with the acquisition of SearchAmerica, as part of its strategy to expand its core data and analytics into new customer segments.

London Stock Exchange-listed Experian is a leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

The Dublin, Ireland-based company employs around 17,000 people in 40 countries and posted revenues of $4.7 billion last year.