The Outsource Group
“ClearLight is so different from other investors-they are an extension of my team, not just a source of capital.”
In 2002, ClearLight attempted to purchase a division of a large publicly-traded collections company in partnership with Michael DiMarco, who was a senior executive with the parent company. The parent company ultimately decided not to sell the division, but ClearLight remained in touch with Michael DiMarco. Later he approached ClearLight with a vision for building a collections company, focused specifically on the healthcare market. ClearLight researched the proposed investment thesis in detail, and determined that the healthcare collections market was large, fragmented and underserved.
In 2004 ClearLight established an alliance with Michael DiMarco and set out to identify acquisition opportunities focused specifically on the healthcare market. Over a six-month period, we contacted 70+ collections companies and met in person with 15 prospective targets. We ultimately acquired two businesses to serve as the platform for our strategy of building a $100 million healthcare receivables management business. Although small, these two businesses provided us with the fundamental infrastructure we needed for our strategy including collections licenses, software systems and operating managers.
Our initial focus was serving doctors offices to collect co-pays by integrating within the practice management software used by the physicians. We relied on “channel partnerships” with practice management software companies to collaborate in selling our collections services alongside their software. While logical, this approach didn’t work, and we determined that we could not rely on channel partners to promote our services. After 18 months of pursuing our initial strategy, management and ClearLight elected to change strategy and focus on hospital collections.
Under ClearLight’s ownership, The Outsource Group successfully implemented new collections services, added many new clients, achieved strong organic growth in both revenue and profits, and acquired twelve additional healthcare revenue cycle management companies to diversify its business lines into Medicaid Eligibility, Third-Party Liability, Disproportionate Share and Insurance Resolution services. The management team recruited several seasoned executives, including a CFO, SVP Sales and SVP Human Resources. The company ultimately grew to provide revenue cycle management services to over 160 hospital clients and physician practices across 38 states with revenues in excess of $100 million.
In 2013, ClearLight sold the Outsource Group to Parallon Business Solutions, LLC, a wholly-owned subsidiary of HCA Holdings, Inc, the largest hospital company in the country.