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Inside the TriZetto-Tela Sourcing deal: Health reform played a role

Sunday, August 29, 2010   (0 Comments)
Posted by: Su Hawk
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Inside the TriZetto-Tela Sourcing deal: Health reform played a role

By Greg Avery, Denver Business Journal
Friday, August 27, 2010, 7:14pm MDT

Health care reform was the behind-the-scenes player in TriZetto Group's purchase of an outsourcing company in a deal announced this week.

Federal health care reform created a strategic logic to acquiring Baltimore, Md.-based Tela Sourcing Inc., a business Greenwood Village-based TriZetto frequently partnered with in recent years, said Mike Jenner, TriZetto's executive VP.

"Health care reform requires payors to be much more efficient in their operations," Jenner said. "This deal helps with the cost pressures created by reform."

And it's not likely to be the last such deal in the industry. Federal policy changes may push health care to catch up with other industries that increasingly moved their technology and customers support overseas to save money.

Gartner Inc., a Stamford, Conn.-based technology research firm, found that 40 percent of health insurers planned to increase what they outsource, speeding up a trend turning overseas outsourcing in health care "from largely the exception to a more accepted norm."

TriZetto creates software and services to help health insurers and plan administrators enroll, bill and manage patient data, all in compliance with various federal rules.

The company has offered clients both onshore and offshore outsourcing, often turning to Tela Sourcing for the offshored services.

Buying Tela Sourcing gives TriZetto ownership of everything from the front-end technology insurers use to the back-end technical support and processing that makes the system work but is handled overseas to save money, Jenner said.

After it's combined with Tela Sourcing, TriZetto's outsourcing operation will have about 700 workers in the U.S. and India handling claims, enrollment processing and billing for clients. It will be based from Baltimore and run by Brij Sharma, who was Tela Sourcing's CEO.

TriZetto's largest office location is in Greenwood Village. The company recently moved its headquarters there from Newport Beach, Calif., but the Greenwood Village office has been open since the company's founding in 1997.

Now, five of the company's eight top executives work from there. Other functions handled from Greenwood Village include sales, consulting and some outsourcing work.

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