As part of his team's fourth-quarter earnings report this week, HealthStream CEO Bobby Frist also announced the company's move into the long-term care and home health provider markets as well as other post-acute segments. On the company's conference call with analysts Wednesday, Frist offered up some more details. Here are some of them; for the full transcript of the call, click here.
• HealthStream already has some clients in this space and is reorganizing its internal reporting to better group them. It's also hiring a number of salespeople — its total sales force grew to 76 from 61 last year and should add another 10 people in the coming months — to focus on post-acute prospects. However, Frist said meaningful new revenue streams from the push won't show up until late this year.
• Look for news of content and technology partnerships this spring as HealthStream builds out its offerings to the post-acute market, which executives say has a workforce of about 3 million. Costs won't ramp up quickly, Frist said, but will likely peak late in the third quarter as hiring picks up.
• Pricing and margins could become interesting. Frist said HealthStream's research shows a number of playes in the post-acute talent management space have price points that are higher than in the acute-care arena. So HealthStream has a chance to sell its products for more than it's charging for its main business now but still be a relative bargain in the post-acute market.
• As has been the case with HealthStream's existing businesses, acquisitions or joint ventures are on the table when it comes to building out oferings.
"It might be supplemental over time. We’ll take our time and process those opportunities, but I would not exclude opportunities in that space just because we’ve launched an organic strategy," Frist said. "We might find really good compliments on how to help that vertical grow as well."
Shares of HealthStream (Ticker: HSTM) are up about 1 percent to about $21.40 in early Thursday action. They're off about 12 percent so far this year.
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