Friday, September 26, 2008

HealthEdge gets $3M, new reseller

By Christopher Calnan

Medical claims software maker HealthEdge Software Inc. recently closed on a $3 million tranche that is the second $3 million installment of $13 million the New York private equity firm Psilos Group committed to HealthEdge in April, executive vice president Ray Desrochers said.

The Burlington-based company has raised $21 million since it was founded in 2004, and the remaining $7 million from Psilos is expected to be the last investment of venture capital HealthEdge will need, Desrochers said.

HealthEdge CEO Rob Gillette and Psilos senior manager Albert Waxman are the company’s co-founders.

The company is targeting midsize health-care insurers that want to expand with consumer-directed plans, Desrochers said. Such plans have been available for about 12 years, but have yet to reach widespread adoption, said David Smith, president of Kearny Street Consulting Inc., a Georgia-based health-care industry consulting firm.

Earlier this month, HealthEdge reached a deal for Washington, D.C.-based Oleen Pinnacle Healthcare Consulting to resell HealthEdge’s software to insurance firms. It was the fourth such consulting reseller deal HealthEdge has reached, Desrochers said.

That model is important to HealthEdge, as insurance firms require software able to manage the more complicated consumer-directed plans, he said. “It’s all about the ability to handle the number and the levels of options.”

HealthEdge’s software is based on what the company calls $100 million worth of intellectual property from Lexington-based deNovis Inc.

HealthEdge, which employs 37 workers, claims five customers, including Florida’s CareGuide and Canton-based OneBeacon Insurance Group Ltd.

The market for health insurance software is dominated by two California companies: The TriZetto Group Inc. and McKesson Corp. The two companies have captured 50 percent to 60 percent of the market, Smith said.