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Healthcare Company Sells Majority Stake in RCM Firm For $1.2B

Bon Secours Mercy Health System has sold a majority stake in its revenue cycle management company, Ensemble Health Partners, to Golden Gate Capital, a private equity firm, for a reported $1.2 billion.

Golden Gate acquired 51% of the company in the transaction, according to a published report.

“Our bread and butter is not to be a revenue cycle management company, so we thought maybe it was time to spin it out as a private company,” said John Starcher, Bon Secours Mercy Health president and chief executive, in the report.

Ensemble has 3,600 employees in 30 states serving 27 different healthcare networks. The company was originally founded in 2014 by Judson Ivy, who is the company’s chief executive. The RCM company has added about $400 million in profit to Bon Secours Mercy Health’s financials during the past three years.

The report notes that more healthcare companies are outsourcing their RCM functions, including billing and collection services, allowing specialists to try and collect on growing levels of bad debt and unpaid bills. Consumers are also expecting a better experience — similar to what they would receive in a retail setting — when engaging with collectors.

“There is a tremendous amount of pricing and rate pressure on health systems,” said Ivy. “There is also a talent drain on the industry.”

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