January 17, 2013
Acquisition Brings Together the Competencies Needed to Create an Integrated Online Health Plan Distribution Platform That Simultaneously Meets the Needs of the Commercial Insurance Industry and Government Health Plan Marketplaces, including Medicare
GREENWICH, CT and BROOKFIELD, WI — Jan. 17, 2013 — Connecture, Inc., a Great Point Partners portfolio company and the leader in sales automation technology for the health insurance industry, today announced it acquired DRX (formerly known as DestinationRx), a provider of Web-based information systems used to compare and enroll in Medicare health plans, as well as those used to compare name brand pharmaceuticals with therapeutic alternatives. DRX powers the Medicare.gov PlanFinder and Online Enrollment Center and serves many of the nation’s largest health plans, pharmacy benefit managers, brokers and senior advocacy groups like AARP. The company is based in Los Angeles.
“This acquisition brings together the people and skills required to create an integrated distribution platform for health plans that is able to simultaneously address the needs of the commercial insurance and government health plan marketplaces, for the first time,” said Doug Schneider, CEO of Connecture. “Both companies share a commitment to make it less expensive to compare plans and enroll in the right one. Now that expertise can be combined to help even more Americans, whether it’s to compare plans offered by many payers in a private exchange, consider similar products on a carrier’s website, shop for the best plan in a state exchange, or select the right Medicare plan and pharmaceuticals.”
The acquisition builds on a natural synergy between the two companies. Connecture is a leader in the commercial insurance market for individual and small group plans, as well as private exchanges, and is one of the first companies to create the shopping and enrollment systems for state and federal partnership exchanges. DRX is a leader in the federal arena and Medicare, the comparison of therapeutic pharmaceuticals, and in multi-payer private exchanges used by large groups.
“Two undeniable trends attracted us to DRX,” said Brett Carlson, Board Member at Connecture and Vice President at Great Point Partners. “We’ve been watching the acceleration of senior enrollment into managed care and the increasing utilization of competitive marketplaces for insurance purchasing in the private sector. DRX strengthens our technological capability and value proposition for our clients in both of these key strategic areas.”
Each company’s information systems enjoy widespread use. More than 25 million Americans have shopped for their health insurance online using systems created by Connecture. And today more than half of the nation’s 20 largest health plans, and nearly 50 percent of all Blue Cross & Blue Shield plans, rely on the company’s information systems to effectively sell their products. Connecture is also supplying the core shopping and enrollment functions for the state exchanges being built in Maryland and Minnesota to meet the requirements of the Patient Protection and Affordable Care Act.
DRX is the leading provider of plan comparison and enrollment solutions for Medicare. To date, DRX solutions processed more than 11 million Medicare applications. In addition to powering the Medicare.gov PlanFinder and Online Enrollment Center, DRX systems are also in use within numerous federal agencies, including the Centers for Medicare and Medicaid, and among leading Medicare sponsors, including Aetna, Cigna, and United Healthcare.
Health care is changing and together, all of us at DRX and Connecture, have an amazing opportunity to make a positive impact, not only for our customers, but also the Americans they serve,” added Dan Maynard, President and Co-Founder of Connecture.
Connecture is the leading provider of Web-based information systems used to create health insurance marketplaces and exchanges. Its industry-proven solutions enable consumers, employers and brokers to more easily shop for, purchase and renew health insurance while minimizing back-office administrative expenses for health plans. Connecture’s solutions are provided to health plans, state insurance exchanges, private exchanges and insurance brokers. More than 25 million Americans shop for their health insurance through systems built by Connecture, and more than half of the nation’s 20 largest plans rely on them to sell, administer and manage their plans and products effectively. For more information, visit www.connecture.com.
About Great Point Partners
GPP, based in Greenwich, CT, is a leading health care investment firm with approximately $600 million of equity capital under management. The Connecture investment was made from GPP I, a fully committed $156 million lower middle market buy-out fund. GPP is currently investing from GPP II, which is targeted at $200 million.
Great Point manages capital in public and private equity funds. Great Point Partners has provided growth equity, growth recapitalization, and management buyout financing to more than 100 health care companies. Both the private and public funds invest across all sectors of the health care industry including behavioral health, biologics manufacturing, life sciences, health care services, hospital outsourcing, information technology, medical devices, specialty pharmaceuticals, and workers compensation. The firm pursues a proactive and proprietary approach to sourcing investments. Reach Great Point at 203.971.3300. www.gppfunds.com