Health care software developer Netsmart Technologies Inc. is making moves in the Ozarks, starting with its July acquisition of Change Healthcare Technologies LLC’s home care and hospice units in Springfield and other markets.
Up next is a planned consolidation of Netsmart’s local offices, now in Springfield and Ozark.
Discussions with Nashville, Tennessee-based Change Healthcare, formerly known as McKesson Homecare and McKesson Hospice, began within the last year, said Netsmart Chief Operating Officer Tom Herzog, who declined to disclose financial terms of the purchase.
Netsmart, an Overland Park, Kansas-based company with clients in all 50 states, specializes in electronic medical record products and billing systems in home health and hospice care.
Herzog said all employees at Change Healthcare, which is close to 200 in Springfield, were retained in the purchase. The July acquisition is Netsmart’s second in the Springfield area. The company entered the market in October 2016 through a purchase of Ozark-based HealthMedX LLC.
Counting its Ozark and Springfield offices, which are Netsmart’s lone operations in Missouri, Herzog said the company has around 250 local employees. Companywide, Netsmart employs 1,700.
With the HealthMedX and Change Healthcare acquisitions, both companies adopted the Netsmart name, Herzog said, with operations continuing in their respective buildings, 5100 N. Town Centre Drive in Ozark and 1550 E. Republic Road in Springfield.
However, that will be changing later this year.
“We’re going to bring everybody into a common facility,” Herzog said. “Obviously, it’s not something we can just do overnight. It’s something that will happen as we move forward.”
Officials are targeting a fourth-quarter move to shared space in the Enactus world headquarters building on the north side of Springfield. Herzog said Netsmart signed a lease for 48,150 square feet in the 1959 E. Kerr St. building that fronts Interstate 44. Terms were not disclosed.
The nonprofit Enactus connects student, academic and business leaders through entrepreneurial-based projects around the world. Enactus Chief Financial Officer Christine Rader said the space Netsmart will be occupying had been available for lease for a couple of years. She said no other tenants are under lease, and no additional space in the building is available.
“We’re finalizing some last-minute details, but that’s the location we’re moving toward,” Herzog said of the space. “We would like to continue to grow and we believe that’s a great hub of associates and talent within the Springfield area.”
Herzog said Netsmart officials identified a good nucleus of talent in the Springfield area.
“That acquisition isn’t just [information technology], it’s the employees that make up that team,” he said. “We need a team that is highly collaborative, really focused on exceeding expectations for our clients and one that shares what we refer to as a cause-connected mindset. We believe it’s that cause-connected mindset that ultimately provides differentiation.”
Netsmart serves as a health care IT partner for post-acute and behavioral health providers, including rehabilitation or palliative services at long-term care hospitals, inpatient rehabilitation facilities and skilled nursing facilities.
Herzog said Netsmart officials had a good experience integrating the HealthMedX staff a couple of years ago, and that influenced the decision to buy out Change Healthcare.
“We need people who are deeply committed to this ecosystem,” he said.
Netsmart’s Ozark office is roughly 14,000 square feet, according to the Christian County assessor’s office, while the Greene County assessor’s office lists the Republic Road building in Springfield at 49,544 square feet.
At the time of the 2016 acquisition, HealthMedX CEO Pamela Pure and company founder and Chief Operating Officer Charlie Daniels became vice presidents of Netsmart. Kelli Christman, director of corporate communications for Netsmart, said Pure and Daniels are no longer with the company.
In the previous purchase, Netsmart added HealthMedX’s 200 customers, putting the company into the 1,500-client territory, according to past Springfield Business Journal reporting. It also retained HealthMedX’s 160 employees in the transaction. Herzog said the Ozark staff currently is around 50 employees.
Spokespeople for Change Healthcare and McKesson Corp. (NYSE: MCK) did not respond to inquiries about McKesson’s 2017 transition to Change Healthcare.
Netsmart is riding a six-year growth curve, with revenue nearly tripling to $319 million in 2017 from $110 million in 2011.
“We’re in a high growth mode right now,” Herzog said. “It’s one that we’ve been doing organically, as well as through acquisitions. As our client base continues to grow, and as we meet more needs within the market, we’re growing our associate population to support those needs.”
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