Renton, Wash.-based Providence on Monday launched Tegria, a healthcare technology and services company.
Tegria, which will operate as a for-profit subsidiary, combines nine companies that not-for-profit Providence has developed or acquired in recent years, with a focus on companies that provide services related to healthcare consulting and technology, revenue-cycle management, and software technology and platforms.
Bringing together the nine companies, which are a subset of the companies that Providence owns, marks another step in Providence's pursuit of diversified revenue streams.
The health system has set a goal to earn $1 billion in revenue from nonclinical revenue sources by 2023 to support patient care.
"Ultimately, to survive on patient-care revenue alone … may or may not happen," said Dr. Rod Hochman, Providence's CEO. "Why wouldn't we diversify our portfolio?"
Providence isn't disclosing how much annual revenue it expects Tegria to generate, a health system spokesperson said.
The COVID-19 pandemic pushed Providence's already thin operating margin into loss territory in the first half of 2020, with the health system reporting a $221 million operating loss in the six months ended June 30, or a 1.8% loss margin, on $12.5 billion in revenue. That's compared with a $250 million operating gain on $12.6 billion in revenue, a 2% margin, in the prior-year period.
In Providence's move toward creating a technology and services company, the health system partially is "taking a page" out of UnitedHealth Group's strategy, Hochman said, looking at what Optum has done for the company. Optum, a services company with a care delivery unit that employs or contracts with 52,000 physicians, is "clearly not an insurance company."
Tegria, which is based in Seattle, employs more than 2,500 people in the U.S. and Canada and already serves more than 350 customers.
Having Tegria as an umbrella for the nine companies will make it easier to cross-sell the companies' services to customers, Hochman said.
Initially, the nine companies will continue to operate separately. Down the line, Tegria may merge some of them.
On the healthcare consulting and technology services side, Tegria will include consulting firm Bluetree, which Providence acquired last year and focuses on managing Epic Systems Corp. software, and consulting firms Engage IT Services and Navin, Haffty & Associates, which focus on Meditech. Providence acquired Engage IT and Navin, Haffty in 2013 and earlier this year, respectively.
Tegria's consulting and tech services also encompasses Community Technologies, a firm that provisions Epic services to rural hospitals and clinics. The firm was developed at Providence and launched in 2009.
The other five companies in Tegria's portfolio are revenue-cycle management firms MediRevv, Acclara Solutions and Medical Specialties Managers, and software technology and platform firms QuiviQ and Lumedic.