Cognizant Executive: TriZetto Buy A Game-Changer As Health-Care Vertical Is Booming

Cognizant's planned $2.7 billion acquisition of health-care IT provider TriZetto is in line with the direction many solution providers are taking -- focusing on the health-care vertical.

Malcom Frank, executive vice president of strategy and marketing at Cognizant, Teaneck, N.J., said there’s a lot of opportunity in the health-care space now, due to the ongoing rollout of the Affordable Care Act and new technology developments across the industry.

’Health care in the United States, to begin with, is going through some structural change and fundamental changes,’ he said. ’When you look at what’s happening with Obamacare, combined with what’s happening with the digitization and the move to consumerism, we think those are very large trends which are driving this.’

[RELATED: Cognizant Acquires TriZetto To Expand Health Care Offerings]

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Social technology as well as mobile, advanced analytics and the cloud are all creating opportunities in the health-care market, said Frank.

’It was through that lens that we viewed this opportunity [to acquire TriZetto],’ he said, ’and we do think it’s a game-changer to provide the full capability for the full stack for both payers, providers and, ultimately, the consumers.’

TriZetto, Englewood, Colo., provides information technology services, including care management and the administration of benefits. The company reportedly reaches 245,000 health-care providers that represent more than half of the insured population in the U.S.

’[TriZetto] had the leading software platform in the health-care industry and, from that standpoint, they have a recurring revenue model with many of their clients,’ he said. ’We think it’s a great combination because you get that platform combined with our leadership around health-care services. We thought it made all the sense in the world to bring all those capabilities together.’

Frank said this is the largest acquisition Cognizant will look to do in health care for the time being, noting TriZetto has a ’strong ecosystem’ of partners Cognizant is hoping to build on. Cognizant also targets the banking, financial services, insurance and retail segments, among others, he said.

Frank said he believes this move will change the game for Cognizant, which continues to focus on the concept termed ’the future of work.’

’We think the IT industry is at an important shift point as things go digital. We think that has a profound impact on our clients,’ he said. ’We’re going to continue to push with the transition toward digital businesses.’

Frank added big money-making verticals in the channel continue to be center around digitization and ’how customers procure knowledge.

"I think there’s going to be new channel models, particularly as ’as a service models’ continue to grab hold. Secondly, I think [with] some of today’s dominant vendors … we’ll see the introduction of a lot of others,’ he said. ’When you just look at who the players are and how they’re going to deliver in the channel, it’s just too hard to predict when there’s going to be a transition in the next few years. … Change will [be] positive for some players and negative for others but, speaking from a Cognizant perspective, we think we’re quite well-positioned for some of those changes.’