51.5 F
Laguna Hills
Thursday, Mar 28, 2024
-Advertisement-

Quality Systems Tries to Improve Hospital Line

Irvine-based healthcare software maker Quality Systems Inc. has a plan to boost its struggling hospital business, its chief executive said late last month.

Quality primarily makes software that helps doctors and dentists manage their practices.

In recent years, though, it has bought smaller companies in an effort to penetrate the electronic medical records segment in hospitals, a segment that’s been brought to prominence in the age of healthcare reform.

Company executives, however, have indicated the hospital segment has been a challenging one.

Quality said on its earnings call for the three months ended Dec. 31 that its overall 5% revenue slip over the year-ago period included a $2.2 million decline in hospital-segment revenue.

“While we are disappointed in the performance of late in our hospital services division, we believe in its long-term prospects and to this end are investing accordingly,” Chief Executive Steven Plochocki said during the earnings call.

Quality took $26 million in noncash charges for the period related to the impairment of the company’s “hospital-held intangible assets, including capitalized software development costs,” Chief Financial Officer Paul Holt told analysts and investors on the earnings call.

Hospital systems quickly came to mind during the question-and-answer period.

“Obviously, this division has struggled here for some time now and has led you to write off a lot of the value here. Can you kind of sort of give us a sense of what’s really gone wrong here for you guys and why has this not come together better than it has?” asked Charles Rhyee, an analyst with New York-based Cowen & Co.

Quality “got out of that gate fast and sold significantly more than we could implement,” Dan Morefield, Quality’s chief operating officer, told Rhyee.

“And so we have been focusing a lot of our efforts on implementation and client satisfaction and investing into our software for those purposes,” he said.

Analyst Greg Bolan of New York-based Sterne Agee & Co. mentioned Quality’s hospital segment in a research note.

“Based on our checks, the rural hospital IT market continues to be quite fragmented, with very few players possessing strong clinical systems,” Bolan said. “We believe [Quality] should stay the course within this market given its well-regarded strength with EHRs (electronic health records).”

Bolan emphasized that Quality needed to work on turning its hospital line around:

“That said, should this segment continue to underperform, the company may need to cut its losses. This segment has been unprofitable for five straight quarters, and we presume it was once again unprofitable” in the December quarter, he said.

Aeolus Now “Orphan Drug”

Mission Viejo-based Aeolus Pharmaceuticals Inc. said late last month that the Food and Drug Administration granted orphan drug status for its AEOL 10150 compound.

Regulators gave Aeolus the designation to make AEOL 10150 available “for use in patients exposed to radiation following a nuclear accident or detonation in order to treat or mitigate acute radiation syndrome,” the drug developer said in a press release.

The designation paves the way for Aeolus to receive federal grants, a marketing exclusivity period for seven years, and more.

“The FDA has provided clear guidance to us on the development pathway for AEOL 10150 and we look forward to their continued assistance on clinical protocols as we advance towards a potential pre-emergency use authorization filing in [acute radiation syndrome],” Chief Executive John McManus said.

Aeolus also develops cancer drugs.

It’s in the fourth year of a five-year, $118 million research and development contract with the U.S. Department of Health and Human Services’ Biomedical Advanced Research and Development Authority for AEOL 10150.

Healthcare Deal Expands

Ontario-based hospital operator Prime Healthcare Services said last month that it expanded its contractual agreements with Minneapolis-based UnitedHealthcare, which has a large operation in Cypress. Prime owns La Palma Intercommunity Hospital, Garden Grove Medical Center, West Anaheim Medical Center and Huntington Beach Hospital.

Prime said in a press release that UnitedHealth’s insured commercial and Medicare members have access to all 14 hospitals the company owns in the state. Only Garden Grove and two Prime hospitals outside OC were contracted with UnitedHealth prior to the deal expansion. Financial details and the length of the contract weren’t disclosed.

Bits and Pieces

Mark Laret, a former chief executive of UCI Medical Center, has been elected chairman of the Sacramento-based California Hospital Association’s board of trustees for 2014. Laret served as UCI’s head from 1995 to 2000, when he left to become chief executive of the University of California, San Francisco Medical Center and UCSF Benioff Children’s Hospital. … Irvine healthcare software maker Kareo Inc. was named to Forbes magazine’s 100 most promising companies list.

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-
-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-