PLDT acquires US-based medical mgm’t firm

The Philippine Long Distance Telephone Co. (PLDT) group has acquired Springfield Service Corp. (SSC), the 10th largest player in the medical billing and revenue cycle management market in the United States, for $44 million (P2.112 billion), a move in line with the group’s bid of looking for new areas of revenue growth.

The full acquisition of SSC was made through a wholly-owned US subsidiary of SPi, a leading global business process outsourcing (BPO) company under the PLDT group.

SSC has 383 employees operating in five locations in the US and provides billing and accounts receivable management services for over $1.3 billion of physician charges annually. The 21-year-old company also offers practice management services, including patient scheduling, coding and compliance assistance, consulting and specialized reporting services.

The company is estimated to generate in excess of $30 million in revenues over the next 12 months.

SPi is 100 percent owned by ePLDT, a wholly-owned PLDT subsidiary. SPi is a leading full-service BPO provider with offices and facilities across North America, Europe, and Asia. Together with its sister company, Ventus, SPi has 11,000 employees delivering a wide range of call center and knowledge-based outsourcing solutions to diversified markets, including financial services, healthcare, legal and publishing.

SPi president and CEO Ernest Cu explained that they have been tracking companies in the medical billing sector for some time with the goal of finding one to acquire whose corporate culture and values match their own.

"SSC fits the bill. Their annuity-based business nicely complements our existing healthcare platform and provides an excellent entry point for us into this rapidly growing $25-billion industry," Cu said.

He added that the inclusion of SSC’s service offerings in SPi’s healthcare portfolio allows the latter to further strengthen its relationships with the more than 400 hospitals, multi-specialty clinics and physician practices that it currently serves.

The US healthcare industry accounts for 15 percent of US gross domestic product and is the largest segment in the US economy. In 2003, US healthcare expenditures reached nearly $2 trillion. Healthcare costs have continued to rise by 18 percent annually since then. Currently $4.2 billion in medical billing work is being outsourced each year, and spending in this area is expected to grow by seven percent annually.