Business model of NextGen Healthcare

Customer Segments

NextGen Healthcare has a niche market business model, with a specialized customer segment. The company targets its offerings at firms in the healthcare industry.

Value Proposition

NextGen Healthcare offers three primary value propositions: convenience, performance, and brand/status.

The company offers convenience by making operations simpler for its clients. It offers an end-to-end solution for the input and management of electronic health data, with elements including practice management, population health management, managed cloud services, analytics offerings, data interchange, claims clearinghouse, interoperability, and revenue cycle management.

The company has demonstrated strong performance through tangible results. Its NextGen Revenue Cycle Management Services solution, which addresses physician billing, has achieved the following:

• Decrease in A/R days of 81%
• Achievement of 98% of net collections
• Improvement in A/R of 36.4%
• First pass clean claims rate of 97%
• Improvement in collections of 9.0%
• Production improvement of 3.8%

High-profile examples of positive outcomes at specific companies include the following:

• CommUnityCare used NextGen Healthcare’s solution to revitalize its federal qualified health center (FQHC), reducing average pending charges processing from 55,000 to 10,000
• AltaMed Health Services used NextGen Healthcare’s solution to improve care quality, resulting in 94 providers meeting requirements and $1.9 million in Meaningful Use (MU) incentives
• LASIS Healthcare used NextGen Healthcare’s RCM Solutions to improve the collections process, resulting in an improvement in the clean claim rate by over 20%
• HealthCare Partners used NextGen Healthcare’s solution to improve reporting and practice efficiencies, resulting in over 100 physicians earning $2 million in MU payments
• Cockerell & McIntosh used NextGen Healthcare’s solution to strengthen its EHR and practice management processes, reducing claim rejections to less than 2%

The company has established a powerful brand due to its success. It employs 3,000 workers across 11 sites, and has recorded back-to-back quarterly growth for years. It serves a network of 90,000 providers in inpatient, ambulatory, dental, and community healthcare that operate in over 25 medical specialties. These physicians use its solution to engage with over 40 million patients, a number that grows by about 70,000 on a weekly basis. Lastly, the company has won many honors, including gold Stevie Awards in the categories of Best Marketing or Sales Brochure or Kit (Online/Electronic and Print), three Surescripts White Coat of Quality Awards, and ranking in Capterra’s list of the “Top 20 Most Popular EHR Software Solutions” (2013).

Channels

NextGen Healthcare’s main channels are its direct sales team, resellers, and its website. The company promotes its offering through its social media pages, online advertising, e-mail marketing, direct mail campaigns, and participation in trade shows and conferences.

Customer Relationships

NextGen Healthcare’s relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website features a section called “NextGen Healthcare Success Community“ that provides self-help resources such as a “Readiness Toolkit“, a “Getting Started Guide“, training simulations, webinars, and answers to frequently asked questions. The site also features a “NextGen Healthcare Resource Center“ that includes white papers, eBooks, data sheets, case studies, infographics, brochures, product demos, archived webinars, and videos.

Despite this orientation, there is also a personal assistance component. The company provides a variety of professional services to clients, including training, project management, functional and detailed specification preparation, configuration, testing,  installation services, and consulting (technical, professional, and physician). It also offers phone, e-mail, and online support at different levels up to 24/7.

Key Activities

NextGen Healthcare’s business model entails designing and developing its software and services for clients.

Key Partners

NextGen Healthcare maintains corporate partnerships with several leading information and technology firms with the aim of enhancing its offerings. Its “Preferred Partner” is Dell. Specific other partners are as follows:

Key Resources

NextGen Healthcare’s main resources are its human resources, who include the technology employees that design and develop its software, the consultants who provide advisory services, and the customer service personnel who provide support.

Cost Structure

NextGen Healthcare has a cost-driven structure, aiming to minimize expenses through significant automation.

Its biggest cost driver is likely sales/marketing, a fixed cost. Other major drivers are in the areas of research/development, a fixed cost, and cost of services, a variable expense.

Revenue Streams

NextGen Healthcare has three revenue streams:

• Product Revenues – Revenues generated from sales of EHR and PM software
• Subscription Revenues – Revenues generated from fees charged for software-related subscription services; software can be licensed on an on-premise basis, as a software-as-a-service solution, or hosted in a private cloud
• Service Revenues – Revenues generated from fees charged for professional services including implementation, training, consulting, support, and maintenance