Valence Health, Chicago, has cut about 75 employees and lost one of its top execs. Dr. Nathan Gunn, president of population health since 2013, left the company last week, said Kevin Weinstein, Valence's chief growth officer.
The layoffs this week were companywide, with most of the dismissed employees coming from services such as claims processing and medical management, IT and development. Some had worked on software products that recently were finished, Weinstein said. The products include those that measure clinical quality and costs.
About half of those let go were in Chicago, where the company is based, and the other half in other states.
Despite the layoffs, Weinstein said Valence, which helps hospitals manage health plans, continues to grow. The company projects sales will increase 44 percent, to $140 million this year from $97 million in 2015. Ten new employees started just last week, he noted. “This is more about balancing the business out than anything else,” Weinstein said of the layoffs, adding that no jobs were outsourced to other countries.
Obamacare in particular has been a boon for business for Valence. Hospitals went into survival mode and looked to the company for guidance. Among its services, Valence builds software to help identify high-cost patients, such as “frequent fliers” to the ER.
In November, Valence won a $72 million contract with the Cook County Health and Hospitals System to help manage various parts of the network's CountyCare Medicaid program. That relationship officially starts today.
Weinstein said he didn't know why Gunn left, and Gunn couldn't be reached for comment. Gunn oversaw the company's software, analytics, clinical research and data operations charged with analyzing more than 100 million patient encounters a year, according to his biography on Valence's website.
Valence, founded by Philip Kamp and Todd Stockard in 1996, has been expanding quickly. Last July, Valence said it had added more than 300 employees over the previous year and expected to have 1,000 employees serving 120 clients by the end of 2015. Weinstein said the company hasn't yet reached 1,000 employees, but expects to surpass that in 2016.
In 2014, revenue climbed more than 55 percent to $60.6 million, Valence said in the July statement when it named R. Andrew Eckert CEO to succeed Kamp. That ranked the company among the Crain's Fast Fifty in 2015.
