TA ASSOCIATES COMPLETES MINORITY INVESTMENT IN MEDSOLUTIONS


The following article was posted on Wednesday, 10 November 2010, in the ‘News’ section of vcaonline.com

BOSTON, November 10, 2010-- TA Associates, a leading growth private equity firm, today announced it has completed a minority investment in MedSolutions, a leading provider of medical management services. Current investors MedCare and Ridgemont Equity Partners will each retain a portion of their stake in MedSolutions. Additional terms of the investment were not disclosed.

Founded in 1997, MedSolutions specializes in the cost management of medical services for commercial, Medicare and Medicaid payors. Under a unifying theme of delivering measurable cost savings that are a consequence of improving healthcare quality, the company has expanded its utilization management platform from its original focus on high tech radiology to now review compliance with evidence-based guidelines for a broadening array of medical services, including cardiology, oncology, ultrasound and sleep study management. MedSolutions also offers the PremerusSM Diagnostic Accuracy program for reducing diagnostic error rates to improve the quality and cost of care.

MedSolutions has over 500 employees and is headquartered in Nashville, Tennessee, with call centers in Nashville and Melbourne, Florida. The company provides cost management for more than 27 million individuals.

“With the ever-growing cost of healthcare, cost management is increasingly coming into focus,” said Mark H. Carter, a Principal at TA Associates who will join MedSolutions’ Board of Directors. “TA has always been attracted to healthcare businesses that effectively address cost issues, and MedSolutions does so by reducing inappropriate and duplicative tests, improving patient safety and enhancing quality of care. We are pleased to complete this investment in MedSolutions.”

“We have been acquainted with TA almost since our founding and are delighted to partner with the firm,” said Curt Thorne, President and CEO, MedSolutions. “Beyond financial support, TA brings a wealth of experience in the healthcare sector in general and the utilization management industry in particular. We anticipate a beneficial relationship as we continue our mission to provide innovative solutions that achieve significant costs savings and quality improvement for patients, payors and providers. We are also pleased that MedCare and Ridgemont Equity Partners will remain significant shareholders as their support and contributions have been an important part of the company’s success.”

Spending on healthcare in the United States is expected to soon exceed 20% of GDP. Current U.S. spending on imaging and utilization is estimated at $100 billion annually and is widely recognized as one of the fastest growing elements of overall healthcare spending, as reported in a 2008 study by the U.S. Government Accountability Office. Beyond costs, there are serious patient safety issues related to unnecessary medical imaging. Certain studies expose patients to radiation dosages equal to 1,000 chest x-rays, and the National Cancer Institute estimates that excessive use of CT imaging will induce cancer in 30,000 Americans a year.

“With annual growth in imaging costs exceeding even that of prescription drugs, the radiology benefit management industry is assuming an active role in addressing the urgent issue of rising costs,” said David S. B. Lang, an Advisor at TA Associates who will also join MedSolutions’ Board of Directors. “Ninety percent of commercial health plans utilize such programs to manage the growing cost of imaging, and a 2008 report from the Government Accountability Office recommended adoption by Medicare. Today, MedSolutions has a significant presence within private and government-run health plans, with opportunities for continued growth. With 32 million more people moving into coverage under commercial health plans and Medicaid by 2019, the valuable services MedSolutions provides will be under more demand than ever.”

TA Associates has more than four decades of investing experience, focusing on profitable growth companies. TA’s prior investments in the healthcare sector include Alere Medical, Amann Girrbach, AmeriChoice, CompBenefits, Dr Lal PathLabs, Invitrogen, Millennium Laboratories, MQ Associates, National Imaging Associates, Triumph HealthCare and Twin Med.

Goodwin Procter provided legal counsel to TA Associates. Goldman Sachs served as financial advisor, and Bass Barry provided legal counsel to MedSolutions.