Acquisition Target: XYZ / XYZ Valuation

1. What are the different sources of Value for XYZ?

a. Assumptions – on current offerings - RCM processes for Hospitals
i. Denial Management
ii. Underpay management.
1. Any tools for trending, tracking & monitoring underpayment and
denials.
b. Assumptions – Payer services
i. Underwriting support
1. Claims adjudication - tools/apps to improve auto adjudication %
2. Provider management - any web based platform to facilitate.
c. Assumptions – Physician services
1. Specialty coding - Concurrency coding etc….
2. Physician education programs - ER code levels/RVU etc.
d. Human Resource,
i. % of bench strength, cumulative experience, specialties
2. What are the Business Structural Advantages
a. Business Model
1. Institutional
2. Practice groups
3. Alliances (BCBS)
4. Easy Access
b. Key capabilities – Overlapping package offerings.
3. Technology Advantages
a. Proprietary products (HIS/MIS/EHR/ICD 10),
i. IP, Software, Business Processes, Codependent Systems, Client legacy systems
b. Automated processes that facilitate enhanced productivity & quality
4. What are Market-Related Advantages
a. Positioning
b. Segment domination
c. Long term contracts
d. Who are the Loyal customers over 5 years with XYZ
e. Relationships – Strategic Advisors
f. CRM systems – how good is your CRM system, what is the value adds from it.
5. XYZ Competitive Analysis –
a. What are your cost, pricing & Revenue models
b. Cost/benefit categories – cost leadership elements & Impacting categories
c. Transition costs – both integration and optimization
i. Cost & Operations Optimization.
6. Sales & Marketing
a. What is the current Revenue model
b. What is the sales pipe line for next 3 years ?
c. What is the competitive positioning of XYZ.
d. What is the customer stickiness, the average tenure of your clients
e. What is the % of customer attrition
f. What are the CSAT levels on a scale of 1 to 5
g. What is the average project margin of the existing clients
i. Viability, scalability etc…
h. What is the % win ratio on a scale of 1 to 10.
i. What is the sales strategy
j. Are there any sales pipeline challenges
k. What is the future market outlook for XYZ
l. Are the Customers aware of the ownership transfer, do we have their consent?
m. What is your Go-to-Market Strategy
n. Average tenure of your clients
7. Operations
a. What are the SLA performance levels achieved in the company
b. Is there any history of breaches & penalties regarding SLAs
c. Are there any revenue leakages
i. Bad debts from clients
ii. Red projects
d. What is the process automation level & are there any process complexities
e. Are there any non compete contractual restrictions that you foresee.
f. Is there any issue with contract viability with any of your existing clients
g. Are there any customer complaints on operational issues
h. What are the SLA performance levels
i. Is there any history of breaches & penalties regarding SLAs
j. Are there any revenue leakages
i. Bad debts from clients
k. What is the process automation level & are there any process complexities
l. Are there any contractual restrictions that you foresee
m. How is the current governance model, is it equipped to handle the ownership transfer
n. Were there any challenges n productivity challenges.
8. Technology
a. What is the currency of the existing technology infrastructure
b. What is the validity of IPs & other software licenses
c. What is the level of system reliability on a scale of 1 to 5 (analysis of down time)
d. Are there any third party dependencies regarding networking & infra support
e. How is the SLA performance of the Systems in situ
f. Is there any history of information security lapses that’s been noticed
g. What is the DR/BCP plan.