ScribeAmerica, a subsidiary of HealthChannels, announced its acquisition of PhysAssist Medical Scribes on November 1, bringing its total number of scribes close to 19,000.
In 2008, PhysAssist had two corporate employees and 35 scribes. A year after TeamHealth Holdings acquired it in October 2014 with minority investors Vesey Street Capital Partners and Chicago Growth Partners, it had 2,500 professionals in 30 states. It now has approximately 3,500 scribes in 36 states.
Moody’s Investors Service rated the $160 million debt-financed acquisition as credit negative, because it would increase the company’s financial leverage and elevate integration risk. The transaction, including fees, was expected to be funded with $135 million from the company’s newly upsized senior secured term loan and approximately $16 million of existing cash.
The medical scribe market is relatively new on the U.S. healthcare services scene. In 2001, the Centers for Medicare and Medicaid Services approved the use of medical scribes as a reimbursable physician expense (at the time, $19.89). In 2014, there were 15,000 medical scribes across the United States, according to the American College of Medical Scribe Specialists (ACMSS), and the number grew to more than 25,000 scribes in 2018. The college projects there will be more than 100,000 scribes at work in 2020.
ScribeAmerica was founded in 2004 as a clinical documentation solution for providers transitioning from paper to electronic medical records (EMRs). By 2015, it managed more than 6,000 scribes in 720 locations. In 2016, the company formed HealthChannels as an umbrella company to oversee ScribeAmerica and newly formed subsidiaries QueueLogix, a medical back-office solutions company, and CareThrough, provider of specialized patient care and population health management.
Vesey Street Capital Partners recapitalized HealthChannels in January 2017 as Chicago Growth Partners, a co-investor since 2014, bowed out. Minority investors Heritage Group and HealthQuest Capital came aboard.