Sometimes, the key to success is choosing the right niche in the first place. When The TriZetto Group Inc. was founded 10 years ago, health insurers were still new to some forms of administrative automation. But the past decade has seen an acceleration in the automation and streamlining of numerous payer processes, from claims processing to claims payment to administration of the growing number of managed care product types - HMO, PPO, POS, managed Medicare and Medicaid, and so on.
And TriZetto has moved with the market, continually broadening its offerings to encompass such capabilities as network management, chronic care management facilitation, Web-hosted solutions, and consumer-directed health plan management. As a result of such moves, as well as strategic acquisitions (such its acquisition late last year of the Phoenix-based QCSI, another managed care claims-oriented vendor, and its December 2005 acquisition of the Boston-based CareKey Inc.), the company's revenues have been booming: it went from $292.2 million in 2005 to $347.9 million last year.
So what's the company's secret for success? Chairman and CEO Jeff Margolis thinks he has the answer.
"The secret sauce is our focus exclusively on how to keep healthcare payers - both health plans and other types of benefits administrators - at the center of the healthcare supply chain, he says. "It's the payers who organize healthcare by bringing together providers, consumers, and payers. And we're focused on the premium dollar that comes in.€VbCrLf In other words, the company focuses on optimizing payer processes that enable the healthcare system to function smoothly. "So in addition to our traditional strength in core administration - billing, enrollment and claims processing types of activities - which is typically around 11 percent of the premium dollar, with our acquisition of QCSI, we've expanded our core€VbCrLf with more specific product offerings.
"So we've jumped from being able to help health plans with about 11 percent of the premium dollar to the remainder of the premium dollar,€VbCrLf he says.
And as the managed care world moves forward, Margolis says he and his colleagues are determined to keep a laser-like focus on key market trends, in order to position TriZetto for the future. Already, they're finding success in being well-positioned for the emergence of consumer-directed health plans, with their retail-level benefits administration requirements. The increasing fragmentation of health plan product offerings down to a highly retail level will only mean more opportunity for vendors like TriZetto. And, in an environment of intense change, Margolis points out that his company continues to invest very heavily in research and development. Indeed, TriZetto plowed $15.7 million of its revenues (representing 13.9 percent) in the first quarter of 2007 back into research.
Given all the changes in managed care, TriZetto executives can afford to be bullish on the future. Not only did the company report increases of 33 percent in annualized revenue in the first quarter of 2007 over the first quarter of 2006, but executives were also able to announce at the end of April that they had $99.9 million in new bookings in the first quarter of 2007.
So, what can others take from TriZetto's success to date? "The lesson learned is, stay focused, know your industry, and invest in the best solutions, even if they're a little bit futuristic,€VbCrLf says Margolis, "because, to borrow a Wayne Gretzky quote, when you're a technology company that takes years to get a concept to market, you have to €˜skate to where the puck is going to be.'€VbCrLf