HCIT valuations

I am curious to learn about transitioning into HCIT space and would like to learn about what terminologies or accounting or valuations techniques that are unique to this sector. Please share some inputs so I can prepare myself for the upcoming interviews.

Was told that they could ask about how to perform a revenue build for a SaaS business, which is odd. Perhaps some HCIT companies do offer subscriptions.

Thanks!

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Would divide up the world into Payor vs Provider IT. Not shocked at all they asked for a software modeling understanding a lot of HCIT businesses are SaaS businesses (eg., Practice Management/EHR, ancillary software into health plans and hospitals etc.). Would just understand how to do an ARR rollforward (BoP ARR + Upsell + New wins - Downsell - Churn) driven by gross/net retention assumptions. Reading a SaaS primer more generally will just help here. Spend a ton of time reading about the revenue cycle (70%+ of the businesses within HCIT from my perspective operate within a hospital/health systems revenue cycle). Hope that’s helpful. Payor side is a bit more nuanced and difficult to generalize most software and services vendors into Payors.

 
drypowder123

Would divide up the world into Payor vs Provider IT. Not shocked at all they asked for a software modeling understanding a lot of HCIT businesses are SaaS businesses (eg., Practice Management/EHR, ancillary software into health plans and hospitals etc.). Would just understand how to do an ARR rollforward (BoP ARR + Upsell + New wins - Downsell - Churn) driven by gross/net retention assumptions. Reading a SaaS primer more generally will just help here. Spend a ton of time reading about the revenue cycle (70%+ of the businesses within HCIT from my perspective operate within a hospital/health systems revenue cycle). Hope that's helpful. Payor side is a bit more nuanced and difficult to generalize most software and services vendors into Payors.

I am going to PM you if you don’t mind. Very helpful!

 

Anyone has good primers to read more about Provider IT? Been seeing a good amount of growth equity / PE investments in a few niche Provider IT spaces lately. I have experience with tech-enabled provider business models, not so much in SaaS but want to familiarize myself with it more.

Ditto on Payer, I find the IT companies in that space very complicated + hard to follow what they actually do (even after speaking with people at their firms).

 

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