In August 2011, Accretive Health was riding high in the healthcare business world. Shares of the Chicago-based revenue-cycle management company hit a high, trading at more than $30.
Net profit in the second quarter of that year reportedly more than doubled to $8.6 million. Large hospital systems were lining up as new clients.
Accretive, founded in November 2003, had become a leader in providing outsourced billing and collections for hospitals, offering them a one-stop shop to handle most financial issues.
But the company's fortunes have changed in the past three years. A stolen laptop containing data on thousands of patients, a scandal over egregious collection practices, several lawsuits and settlements, pending financial restatements, delisting from the New York Stock Exchange and an overhaul of upper management have changed perceptions about Accretive.
“It was very disappointing,” said Charles Rhyee, managing director and senior research analyst at Cowen Group, who follows the company. “Everything seemed to be going in the right direction.”
On July 21, a new CEO, Dr. Emad Rizk, takes over the beleaguered firm. The former president of McKesson Healthcare Solutions has a tall task. Rectifying the financial missteps is only one issue. Perhaps more important, Rizk, 51, has to instill confidence in hospitals, health systems, investors and regulators that Accretive is a reliable and ethical outsourcing partner, especially as other competitors have flooded what research analysits estimate has become anywhere from a $5 billion to $50 billion per year U.S. revenue-cycle market.
“I have spent the better part of my career identifying, assessing, developing and achieving significant strategic potential in the healthcare ecosystem,” Rizk said in a statement at the time of his appointment. “Accretive Health represents that kind of potential to me.”
From Accretive's inception, the company has had one goal, according to one of its Securities and Exchange Commission filings: “to be the partner of choice for U.S. healthcare providers in revenue cycle, quality and total cost-of-care services and physician advisory services.”