Healthways lands overseas military deal

Contract highlights wellness firm's international push

In its latest move to expand its international book of business, disease management and wellness company Healthways will provide chronic care management services to U.S. military personnel serving overseas.

Through an agreement with International SOS Inc., Healthways will work with enrollees of the Department of Defense Tricare Overseas Program — providing chronic care management services to the military health plan’s Overseas Prime Remote beneficiaries who suffer from asthma, diabetes, hypertension, depression and anxiety disorders, and those needing cancer screenings.

International SOS holds the main DoD contract to assist Tricare in implementing a broad system of care to enrolled members, deployed personnel, travelers and retirees outside the United States. It will begin delivering comprehensive health care services — with Healthways’ chronic care support — on Sept. 1.

The contract will cover active-duty service members and their families in “a minimum of 146 countries,” according to a Healthways spokesman, but the exact size of the deal remains unclear. Healthways is still working with International SOS to determine how many lives will be covered and, of those, how many will use Healthways’ services, the spokesman said.

Regardless of size, the agreement illustrates Healthways’ oft-stated interest in expanding its overseas business. The Nashville company launched its first international contract in Germany in 2007 and now also has deals in Brazil and Australia, with locations under development in several additional countries.

According to local investment banking firm Jefferies, the fate of that flagship German contract could influence Healthways’ international future. The deal expires at the end of the year, and as yet Healthways has been mum on whether the contract will be renewed or expanded. That uncertainty is likely why Healthways’ stock (Ticker: HWAY) has pulled back from the $20 per share range to the $13 per share range, Jefferies said.

Last year, Healthways' international segment accounted for roughly $18.4 million of the company’s $717 million in revenue and recorded an 11 cents per share loss. In 2010, the company expects the segment to draw $27 million to $33 million in revenue and have break even to slightly positive earnings per share.