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Pressures
on hospitals boost HR software firm
Boston Business Journal
HealthcareSource, a Woburn-based health care human resources software firm, saw its revenue rise 33 percent and its head count grow by 80 percent in 2010, as hospitals face growing pressures to recruit the best candidates while lowering their administrative costs.
“Look at the forces impacting hospitals — a growing population over 65 that needs care, amazing new technologies that are increasing costs, and Medicare and Medicaid budgets are getting squeezed,” CEO Peter Segall said. “You have to reinvent yourself in terms of business processes, and that includes human resources.”
The company booked revenue of $20.6 million in 2010, up from $15.5 million in 2009 and $12.3 million in 2008. About a year ago the company increased its office space to 18,000 square feet from 10,000 square feet. Head count stands at 147 and rising, up from 80 workers a year ago.
About 111 of those work in Massachusetts, the others are salespeople who work remotely all over the country. The company was founded 15 years ago by two entrepreneurs from Winchester and was sold to New York-based Insight Venture Partners in January 2008. Segall came on board as CEO in June 2008, having previously worked as the president of North America operations for Washington, D.C.-based e-learning firm Blackboard Inc.
The company competes with firms like Chelmsford-based Kronos Inc. and San Mateo, Calif.-based SuccessFactors Inc. in the wider “talent management” market, which is estimated to be $2 billion in the United States for 2011 by Oakland, Calif.-based research firm Bersin & Associates.
HealthcareSource’s products help automate recruiting and hiring new employees, and also offer performance-management tools for workers throughout their tenure at the hospital.
Segall said that while other industries automated these functions five or 10 years ago, health care is later to the game, and that there is a significant opportunity in the market.
The company’s business model is subscription-based, and products cost between $10,000 and $20,000 each per year, with discounts for hospitals that buy multiple products.
One issue for hospitals is that they depend on certification of certain employees to maintain their accreditation, and software like HealthcareSource’s can keep track of whether worker’s certifications are current. Another factor is the current drive towards patient satisfaction, as more and more hospitals move into performance-based contracts with insurers.
“An average heart attack patient comes into contact with 22 hospital workers, everything from triage to recovery,” Segall said. “We can include those patient satisfaction goals in the performance management tools, to ensure consistency.” The company’s TestSource product can also screen potential employees for a patient-satisfaction orientation through behavioral application questions. HealthcareSource acquired Grand Rapids, Mich.-based TestSource for an undisclosed amount last year, and 10 employees still work at the office there.
Clients include a number of local hospitals including Tufts Medical Center in Boston, South Shore Hospital in Weymouth and Worcester’s UMass Memorial Hospital.
“It goes without saying in this economy that a key goal is recruiting top-quality candidates at the lowest cost,” Ellen Sheil, director of staffing at UMass Memorial said.
Sheil said the HealthcareSource products have been easy to implement and that they are speeding up the time it takes to evaluate job candidates by ranking them against each other based on qualifications. This means that the top candidates go to the top of the pile in the hiring manager’s inbox.
UMass Memorial employs more than 10,000 workers and Sheil says that across all job descriptions and shifts, the hospital probably hires 1200 workers per year.
Segall said HealthcareSource’s products can also help hospitals prepare for upcoming nurse shortages, as a wave of retirements is expected over the next five to ten years.
HealthcareSource’s software enables hospitals to build passive applicant pools of potential candidates, that are already employed elsewhere, that could potentially be recruited from other institutions in the future.
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