Xerox Revamping Its Healthcare IT Business

Jul 17, 2015

Xerox announced on Friday it is making changes in the company's government healthcare IT business.

It will discontinue sales of its integrated eligibility system software, which helps states determine public assistance eligibility for clients.

Xerox also says it will be more selective in the future in responding to new opportunities for its Medicaid Management Information System. The company had faced performance issues in some states where it provides that product.

Xerox Chairman and CEO Ursula Burns says the company continues “...to refine our strategy and take the necessary actions to position our services business for better revenue growth and margin improvement...These changes to our Health Enterprise platform strategy will enable us to improve execution. We will continue to offer and deliver a broad array of other government healthcare solutions and services to existing and future clients.”

Xerox spokesman Sean Collins told WXXI News that the company will concentrate on completing health management work already underway in several states including New York, California, Montana and North Dakota and will continue to run the programs in those states.

He says Xerox also will continue to effectively operate the programs running in Alaska and New Hampshire.

Collins  says the changes in the healthcare business will not impact Rochester area employment.

The Xerox changes mean the company will take an impairment charge of about $145 million, or $90 million after taxes in the second quarter. That means Xerox expects second-quarter GAAP earnings from continuing operations of 9 to 11 cents per share, which is below the company's prior guidance. Excluding the impairment charge, adjusted earnings per share is expected to be in line with the company's prior guidance of 21 to 23 cents.

Xerox reports earnings later this month.