Here's how Consensus plans to 'attack' the interoperability opportunity as a new public company

A company primarily known in the healthcare industry for its cloud fax business is aiming to tackle the broader interoperability market.

J2 Global, a conglomerate of media and information services, recently announced plans to split into two businesses, spinning off its internet fax business as a new company called Consensus. The bulk of the company, in media and e-commerce, will remain J2.

The spinoff is expected to take effect by the third quarter of this year. 

As a new publicly traded company, Consensus will consist of J2's cloud fax business, including the eFax business, and related brands, with a focus on healthcare, which is expected to have $333 million to $342 million in revenue in 2021.

As the healthcare industry is pushed to free up siloed healthcare data, Consensus executives believe the company's capabilities in secure data exchange well position it to get out ahead in the "race to address healthcare interoperability."

Consensus is leaning on its traditional digital fax technology and layering on new technologies to create an end-to-end interoperability solution. It's a massive addressable market that Consensus pegs at a value of $11 billion.

"Very few companies out there are providing what we call interoperability as a service. That's our distinction and our ability to stand out in the space as a publicly-traded company," said Scott Turicchi, J2’s current president and chief financial officer, during a recent call with investors to discuss the spinoff. 

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There are strong tailwinds behind Consensus' push into the interoperability market. New federal regulations, mandated by the 21st Century Cures Act, aim to open up patients' access to their medical records and make it easier for payers and providers to share health information.

By becoming a separate publicly traded company, Consensus will have more capital to make deeper investments in its technologies, executives said during the investor call.

"At Consensus, we will be taking the free cash flow generated and reinvesting it specifically into this opportunity through a combination of M&A and increased capital expenditures to accelerate and take advantage of this opportunity," said Turicchi, who will become the chief executive officer of Consensus once the spinoff is completed.

As part of the Consensus spinout, J2 intends to distribute at least 80.1% of the outstanding Consensus shares to J2 shareholders on a pro-rata basis in a distribution intended to be tax-free to J2 and its shareholders. At the time of the spinoff, J2 intends to retain up to a 19.9% interest in Consensus and divest that interest over time in a tax-efficient manner.

Making a 'long-term play' in the market

There are calls in the healthcare industry to "axe the fax," but the reality is, fax services are embedded in healthcare. In 2019, DirectTrust reported that more than 9 billion faxes are still sent every year in healthcare and one study pegged fax as accounting for 75% of all medical communication.

According to a survey two years ago, 89% of organizations use a fax machine

In healthcare, no one wants to talk about the "F" word, according to John Nebergall, senior vice president and general manager of Cloud Fax within J2 Global.

"When talking about interoperability, no one wants to talk about fax protocol. It's regarded as the thing that healthcare is trying to get rid of," he told Fierce Healthcare.

But contrary to outdated ideas about faxing, it does not have to be a paper-based communication solution, said Nebergall, who will serve as chief operating officer of Consensus once the spinout is completed.

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As companies transition from on-premise fax machines to cloud-based digital fax services, this has driven strong growth for Consensus. It currently has about a 39% share of the online fax market and 60% of its corporate revenue is coming from the healthcare sector, executives said.

Consensus is leveraging its cloud fax business to attack the interoperability opportunity in healthcare, Nebergall said.

"We're coming into the interoperability market with the idea that fax is the most common way of sharing information. We're taking something that is already there, people are comfortable using, it's embedded in workflows and then we're building on top of it to create a paperless transaction that integrates with other forms of digital information," he said. 

Building on its digital communications capabilities, Consensus has invested  $70 million over the past several years to evolve its capabilities and develop an interoperability platform that combines commonly used healthcare communication protocols in a single interface.

The interoperability solution, which launched last year, also enables patient queries via Carequality and CommonWell Health Alliance and connectivity to referral networks and health information exchanges, according to the company. Consensus' Signal platform sends patient event notifications, including admit, discharge and transfer (ADT) notices, which hospitals will soon be required to send under federal interoperability rules.

Future releases of the platform will have capabilities to extract data directly from fax messages and transform them into structured HL7, Fast Healthcare Interoperability Resources (FHIR) and direct secure messaging protocols, aiding the workflow for providers, Turicchi said.

RELATED: Healthcare has made big gains in interoperability, KLAS Research and CHIME report

Online fax will continue to have a significant place in healthcare communications over the next several years, Turicchi said, but the company's interoperability solution represents a "long-term play" in the space.

Consensus' broader aim is not just to move documents from one place to another but to make the underlying data actionable for providers and to transition healthcare from document-centric to data-centric, he said.

"The real opportunity is how to extract those key pieces of information from medical documents and put them into a dataset and get them available to doctors, physicians, and hospitals for better medical decisions," he said.

Future plans include adding intelligent data extraction, natural language processing and referral management tools to the interoperability platform, Turicchi said.

After the spin-off, Consensus will be the largest standalone interoperability service provider in the U.S. by volume and revenue, according to Nebergall.

"We have literally hundreds of thousands of physicians already using our products and services, whether electronic fax services or some of the Consensus products. We have the opportunity to build on the technology that providers already have in their hands and drive the market closer to what CMS [Centers for Medicare and Medicaid Services] and the industry envision, which is seamless interoperability between all parties," he said.