Portico Systems

About Portico Systems

Portico Systems, founded in 1997 by Ned Moore and Scott Fraser, specialized in providing software solutions for health insurance plans to manage their provider networks. The company was established to address the complexities within the healthcare system, focusing on empowering health plans to improve the performance of their provider networks while aiming to reduce medical, administrative, and IT expenditures. On July 26, 2011, Portico Systems was acquired by McKesson Corporation, a major player in pharmaceutical distribution and healthcare IT, for $90 million. The acquisition was a strategic move for McKesson to bolster its capabilities in managing the evolving healthcare delivery and reimbursement models, such as Accountable Care Organizations (ACOs).

The core of Portico's offering was its Integrated Provider Management (IPM) Platform, a software suite designed to streamline and automate the relationship between health plans and healthcare providers. This platform simplified various operational aspects, including the design and maintenance of provider networks, reimbursement processes, and performance management. Key features supported provider contracting, recruitment, credentialing, and relationship management. The business model centered on selling this enterprise software to health insurers, which at the time of its acquisition, was utilized by 33 networks covering approximately 42 million individuals. The company's revenue was generated through the licensing of its IPM platform. The system promised tangible results, such as a 25-35% reduction in administrative costs and a 10-20% increase in provider satisfaction.

Prior to its acquisition, Portico Systems was a privately held company supported by investors like Safeguard Scientifics and Edison Ventures. The acquisition by McKesson was intended to merge Portico's provider network management tools with McKesson's existing applications for decision support, care management, and claims auditing, creating a more comprehensive suite of services for the healthcare industry. Following the acquisition, the Portico Systems team, consisting of roughly 140 employees based in Blue Bell, Pennsylvania, was integrated into McKesson's Health Solutions division to deepen expertise in network management and value-based reimbursement.