What changed in this filing

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Item 1. Business

2021-02-26 compared with 2020-02-26 · 115 added, 94 removed, 238 unchanged (47% of the section changed)

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(HealthStream or the Company) provides workforce and provider solutions for healthcare organizations—all designed to support the people that deliver patient care, which in turn, supports the improvement of business and clinical outcomes.

Delivered primarily as Software-as-a-Service (SaaS), our solutions focus on some of the most significant challenges facing the healthcare workforce and healthcare organizations today, including the need to effectively manage, retain, engage, and develop healthcare workforce talent;

meet rigorous compliance requirements;

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Using technology to enhance learning and productivity, HealthStream pioneered the delivery of online learning for hospitals’ required regulatory training as Internet-based training was first introduced.

Stemming from that early success, demand for expanded learning solutions led the Company to build what is now a full ecosystem of diverse workforce and clinical-focused applications, courseware, assessments, and talent management programs.

Stemming from that early success, demand for expanded learning solutions led the Company to build a growing ecosystem of diverse workforce and clinical-focused applications, courseware, assessments, and talent management programs.

HealthStream believes that the key to quality patient care is—and always has been—the people who deliver care.

To that end, the Company’s solutions support the recruiting, retaining, engaging, assessing, developing, credentialing, and privileging of the healthcare workforce, including medical staff who provide patient care in our customers’ organizations.

Headquartered in Nashville, Tennessee, the Company was incorporated in 1990 and began providing its SaaS-based workforce solutions in 1999 and its provider solutions in 2012.

Including additional offices in Nashville, Tennessee;

Jericho, New York;

San Diego, California;

Chicago, Illinois;

Denver, Colorado;

and Boulder, Colorado, HealthStream had 849 full-time and 27 part-time employees as of December 31, 2019.

To that end, the Company’s solutions support the recruiting, retaining, engaging, assessing, developing, scheduling, credentialing, and privileging of the healthcare workforce, including medical staff who provide patient care in our customers’ organizations.

The Company was incorporated in 1990 and began providing its SaaS-based workforce solutions in 1999 and its provider solutions in 2012.

HealthStream is headquartered in Nashville, Tennessee and had 1,037 full-time and 32 part-time employees as of December 31, 2020.

INDUSTRY BACKGROUND

According to the Centers for Medicare & Medicaid Services (CMS), spending in the healthcare industry reached over $3.6 trillion in 2018, or 17.7% of the U.S.

According to the Centers for Medicare & Medicaid Services (CMS), spending in the healthcare industry reached $3.8 trillion in 2019, or 17.7% of the U.S.

gross domestic product.

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(Organizations in the continuum of care employ approximately 1.5 million employees in ambulatory centers, approximately 3.5 million employees in post-acute care facilities, and approximately 300,000 employees in health & human services facilities.)

All of the approximately 5.2 million hospital-based healthcare professionals that work in the nation’s approximately 4,700 acute-care, critical access, and children’s hospitals that are registered with Medicare are required by federal and state mandates and accrediting bodies to complete training in a number of areas.

training on patient information confidentiality required under the Health Insurance Portability and Accountability Act (HIPAA).

All of the approximately 5.2 million hospital-based healthcare professionals that work in the nation’s approximately 6,000 inpatient hospitals that are registered with Medicare are required by federal and state mandates and accrediting bodies to complete training in a number of areas.

This training includes safety training mandated by both the Occupational Safety and Health Administration (OSHA) and The Joint Commission (an independent, not-for-profit organization that accredits and certifies healthcare organizations and programs in the United States), as well as training on patient information confidentiality required under the Health Insurance Portability and Accountability Act (HIPAA).

In hospitals, staffing issues and personnel shortages have also contributed to the need for facility-based workforce development as well as additional assessment and competency-based training.

An ongoing nursing shortage, for example, is resulting in skill gaps and rising costs.

By 2028, more than 371,000 new Registered Nurse (RN) jobs are projected to be added to the workforce from 2018, surging from approximately 3.06 million jobs in 2018 to a projected 3.43 million jobs, according to the U.S.

By 2028 , more than 371 ,000 new Registered Nurse (RN) jobs are projected to be added to the workforce from 2018 , surging from approximately 3.06 million jobs in 2018 to a projected 3.

43 million jobs , according to the U.S.

Bureau of Labor Statistics .

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For example, a single provider may need to enroll annually with some 30 to 40 payers, with each payer application often taking two to four hours to complete.

Finally, the hospital industry continues to operate under intense pressure to reduce costs as a result of potential reductions in government reimbursement rates and increased focus on cost containment consistent with participation of patients in managed care programs, among other factors.

Finally, the hospital industry continues to operate under ongoing pressure to reduce costs as a result of potential reductions in government reimbursement rates and increased focus on cost containment consistent with participation of patients in managed care programs, among other factors.

In addition, many hospitals, as well as pharmaceutical and medical device companies, may continue to experience rising operating costs, coupled with increased pressure to measure and report on the outcomes of the dollars spent on training.

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HEALTHSTREAM’S SOLUTIONS

During the year ended December 31, 2019, HealthStream’s products, services, and operations were organized into two business segments—Workforce Solutions and Provider Solutions—that collectively help healthcare organizations meet their ongoing clinical development, talent management, training, education, assessment, competency management, compliance, provider credentialing & privileging management, and provider enrollment needs.

During the year ended December 31, 2020, HealthStream’s products, services, and operations were organized and managed under two business segments—Workforce Solutions and Provider Solutions—that collectively help healthcare organizations meet their ongoing clinical development, talent management, training, education, assessment, competency management, compliance, scheduling, provider credentialing & privileging management, and provider enrollment needs.

HealthStream’s solutions are provided to a wide range of customers within the healthcare industry across the continuum of care.

On February 12, 2018, the Company divested its Patient Experience (PX) business to Press Ganey for $65.2 million in cash (after giving effect to the post-closing working capital adjustment).

This sale of the PX business resulted in the divestiture of the Company’s patient experience solutions segment.

HealthStream Workforce Solutions — Our workforce development solutions, which are comprised primarily of SaaS, subscription-based products, are used by healthcare organizations to meet a broad range of their clinical development, talent management, training, certification, competency assessment, performance appraisal, and additional needs.

HealthStream Workforce Solutions — Our workforce solutions, which are comprised primarily of SaaS, subscription-based products, are used by healthcare organizations to meet a broad range of their clinical development, talent management, training, certification, scheduling, competency assessment, performance appraisal, and additional needs.

Our numerous content libraries allow customers to subscribe to a wide array of courseware, which includes content from leading healthcare and nursing associations, medical and healthcare publishers, and other content providers.

Additionally, medical device companies and other industry partners offer online training support through HealthStream’s platform for their products.

HealthStream’s SaaS-based platform has long been one of the most widely adopted workforce development platforms in healthcare.

To facilitate innovation and growth of our ecosystem, HealthStream’s new platform technology, hStream™, was launched in 2018.

hStream is the essential technology working behind the scenes that powers activity in the HealthStream ecosystem.

The Company’s existing and new customers are gradually upgrading to the hStream platform, which is, all together, anticipated to be a multi-year transition for HealthStream.

At December 31, 2019, HealthStream had contracts with customers for approximately 3.15 million subscriptions to hStream, which included an addition of 1.64 million in 2019 alone.

HealthStream’s SaaS-based learning application has long been one of the most widely adopted workforce development platforms in healthcare.

To facilitate innovation and growth of our ecosystem, HealthStream’s platform technology,

hStream™, was launched in 2018.

hStream is the essential technology that powers activity in the HealthStream ecosystem.

The Company’s existing customers are gradually upgrading to the hStream platform, typically in connection with renewal of their contracts.

At December 31, 2020 , HealthStream had contract s with customers for approximately 4.22 million subscriptions to hStream, compared to 3.15 million subscribers as of December 31, 2019.

The transition to the hStream platform supports our strategic advancement toward a Platform-as-a-Service (PaaS) approach.

Pricing for hStream and HealthStream’s workforce applications is primarily subscription-based, with fees based on the number of subscriptions, solutions provided, and other factors.

We offer training, implementation, and account management services to facilitate adoption of our subscription-based solutions.

Fees for training are based on the time and efforts of the personnel involved.

Implementation fees vary based on the size, scope, and complexity of the project.

We offer implementation, training, and account management services to facilitate adoption of our subscription-based solutions.

Fees for implementation services are based on the time and efforts of the personnel involved.

Training fees vary based on the size, scope, and complexity of the project.

Our platform and subscription-based solutions are hosted on a combination of private-cloud infrastructure and public-cloud infrastructure, leveraging Amazon Web Services and Azure, which allows authorized personnel access to our services through the Internet, thereby eliminating the need for onsite local implementations of installed workforce development products.

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Each application on our platform has its own value.

Examples of individual applications that are offered on our platform include applications for learning, performance appraisal, compensation management, succession planning, competency management, disclosure management, clinical development, simulation-based education, quality management, and industry training.

HealthStream Provider Solutions – Our provider solutions are offered through our business segment that is branded in the marketplace as VerityStream.

VerityStream delivers enterprise-class solutions to transform the healthcare provider experience for healthcare organizations and providers.

We currently serve approximately 2,500 hospitals and 1,300 outpatient facilities, including ambulatory surgery centers, urgent care facilities, clinics, medical groups, and more.

VerityStream resulted from the combination of Sy.Med Development Inc.

(acquired in October 2012), HealthLine Systems (acquired in February 2015), Morrisey Associates, Inc.

(acquired in August 2016), and CredentialMyDoc (acquired in December 2019).

We currently serve hospitals and outpatient facilities, including ambulatory surgery centers, urgent care facilities, clinics, medical groups, and other healthcare organizations.

As of December 31, 2020, VerityStream had 270 employees with headquarters in Boulder, Colorado and satellite offices in San Diego, California and Chicago, Illinois, as well as employees located in the Nashville, Tennessee corporate office.

Our legacy products include EchoCredentialing™ and MSOW™, comprehensive platforms that manage medical staff credentialing and privileging processes for hospitals;

Our legacy products include EchoCredentialing™ and MSOW™, comprehensive platforms that manage medical staff credentialing, enrollment, and privileging processes for hospitals;

EchoOneApp™, a provider enrollment platform for medical groups;

CredentialMyDoc™, a SaaS solution to credential providers, enroll providers with payers for reimbursement, and apply and maintain privileges, especially in ambulatory care settings;

and EchoAccess™, our enterprise class platform to support hospital call centers with physician referral and provider directories functionalities.

In January 2018, we announced the launch of our SaaS-based provider credentialing, privileging, and enrollment solution - Verity, which was rebranded in 2019 as VerityStream.

As a SaaS-solution, VerityStream includes an intuitive, modern user experience that delivers a continual stream of platform enhancements, evidence-based content, and curated data.

and CredentialMyDoc™, a credentialing and enrollment SaaS solution for medical groups and surgery centers.

In January 2018, we launched our SaaS-based provider credentialing, privileging, and enrollment solution branded as CredentialStream.

As a SaaS-solution, CredentialStream includes an intuitive, modern user experience that delivers a continual stream of platform enhancements, evidence-based content, and curated data.

A subscription to this infrastructure provides healthcare organizations with tools to support the provider lifecycle from recruiting, application submission, verification of licensure and other credentials, privileging, appointments by credentialing committees, enrollment, network management, onboarding, and performance evaluation of providers.

As of December 31, 2019, more than 200 healthcare organizations had contracted for the VerityStream SaaS platform.

As of December 31, 2020, more than 300 healthcare organizations had contracted for the CredentialStream SaaS application.

BUSINESS ACQUISITIONS

We acquired Providigm, LLC in January 2019, and we acquired substantially all the assets of CredentialMyDoc in December 2019.

As part of our overall growth strategy, we evaluate opportunities for mergers and acquisitions, and since the beginning of 2019, we have completed seven acquisitions.

We acquired Providigm in January 2019, and we acquired substantially all the assets of CredentialMyDoc in December 2019.

In March 2020, we acquired NurseGrid, in October 2020, we acquired ShiftWizard, and in December 2020, we acquired ANSOS as well as substantially all of the assets of myClinicalExchange.

In January 2021, we acquired ComplyALIGN.

For additional information regarding acquisitions, please see Note 8 of the Consolidated Financial Statements and Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included elsewhere in this report.

COVID-19 PANDEMIC

Our business is focused on providing workforce and provider solutions to healthcare organizations, and as such the pandemic’s adverse impact on healthcare organizations has resulted in an adverse impact on the Company.

For information regarding the ongoing impact of the COVID-19 pandemic on the Company and our response to the pandemic, see the discussion below under “Impact of and Response to COVID-19 Pandemic” included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Form 10-K.

We provide our solutions to customers across a broad range of entities within the healthcare industry, including private, not-for-profit, and government entities, as well as pharmaceutical and medical device companies.

We derive a substantial portion of our revenues from a relatively small number of customers, although no single customer represented more than 10 percent of our revenues during 2019, 2018, or 2017.

Customers that have purchased or contracted for products and services from HealthStream include CHRISTUS Health;

HCA Holdings, Inc.;

Community Health Systems, Inc.;

McLaren Health Care Corporation;

Infirmary Health, and Sutter Health.

We derive a substantial portion of our revenues from a relatively small number of customers that are healthcare providers.

SALES AND MARKETING

We market our products and services primarily through our direct sales teams, which are based out of our various office locations as well as remote home office locations.

We market our products and services primarily through our direct sales teams, who are located throughout the United States.

As of December 31, 2020, our Workforce Solutions sales personnel consisted of 164 employees who carried sales quotas, and our Provider Solutions sales personnel consisted of 37 employees who carried sales quotas.

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We believe our ability to establish and maintain long-term customer relationships, obtain recurring sales, and develop and maintain new and existing products are dependent on the strength of our operations, customer service, product development and maintenance, training, and other support teams.

As of December 31, 2019, our Workforce Solutions operations team consisted of 367 employees associated with customer support, implementation services, training, product management, software development and quality assurance, and project management;

and our Provider Solutions operations team consisted of 214 employees associated with implementation services, training, data integration, product management, software development and quality assurance, credentials verification, consulting, and other functions.

As of December 31, 2020, our Workforce Solutions operations team consisted of 511 employees and our Provider Solutions operations team consisted of 222 employees.

Our operations teams for each of these segments are primarily associated with technical support, customer implementation and training, product management, software development and quality assurance, and other functions.

Our services are designed to be reliable, secure, and scalable.

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In addition to the competing healthcare education delivery methods in the industry, we also have direct competitors.

In our Workforce Solutions business segment, a number of companies offer competitive learning management products and talent management modules to the healthcare industry.

We compete with companies such as Cornerstone OnDemand, Healthcare Source, SABA, Oracle, SAP, Infor, and Workday, who provide their services to multiple industries, including healthcare.

We also compete with large medical publishers that have operating units that focus on healthcare, such as Relias Learning, which is owned by Bertelsmann.

In our Workforce Solutions business segment, a number of companies offer competitive learning management products, scheduling solutions, and talent management modules to the healthcare industry.

We compete with companies such as Cornerstone OnDemand, Healthcare Source, Ultimate Kronos Group, Oracle, SAP, Infor, and Workday, who provide their services to multiple industries, including healthcare.

We also compete with large medical publishers that have operating units that focus on healthcare, such as Relias Learning.

In our Provider Solutions business segment, we have competition primarily from several large companies, such as Symplr, Verisys, MD-Staff, AMN Healthcare, as well as from a broadening array of smaller companies.

We believe our Workforce Solutions, which include both products and services that facilitate education, training, assessment, and development for healthcare professionals, offer a wide assortment of content, functionality, and applications provided on a single platform over the Internet and provide us with a competitive advantage.

In our Provider Solutions business segment, we believe the scope and quality of our products, capability to connect medical staff credentialing with

provider enrollment, and innovative new predictive analytics, provide us with a competitive advantage.

We believe our Workforce Solutions, which include both products and services that facilitate education, training, assessment, scheduling, and development for healthcare professionals, offer a wide assortment of content, functionality, and applications provided on a single platform over the Internet and provide us with a competitive advantage.

In our Provider Solutions business segment, we believe the scope and quality of our products, capability to connect medical staff credentialing with provider enrollment, and innovative new predictive analytics, provide us with a competitive advantage.

We believe that the principal competitive factors affecting the marketing of our Workforce and Provider Solutions to the healthcare industry include:

our technology platform, which combines SaaS-based capabilities and certain PaaS capabilities to capture, track, and report on activities, such as learning, performance, credentialing, and privileging across various modalities, and provides interoperability with external systems such as HRIS and other healthcare-related systems;

scope and variety of Internet-based workforce development and provider solutions available, including, without limitation, clinical, compliance, resuscitation, revenue cycle, talent management, credentialing, and privileging solutions;

our technology platform, which combines SaaS-based capabilities and certain PaaS capabilities to capture, track, manage, and report on activities, such as learning, performance, scheduling, credentialing, and

privileging across various modalities , and provide s interoperability with external system s such as HRIS and other systems utilized by our customers ;

scope and variety of Internet-based workforce and provider solutions available, including, without limitation, clinical, compliance, resuscitation, revenue cycle, talent management, scheduling, credentialing, and privileging solutions;

our singular focus on the healthcare industry and our deep healthcare expertise;

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customer service and support;

mobility, security, uniqueness, and value of underlying data sets and embedded content;

effectiveness of sales and marketing efforts;

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Regulation of the Internet and the Privacy and Security of Personal Information

The laws and regulations that govern our business may change rapidly.

The following are some of the evolving areas of law that are relevant to our business:

We are subject to various legal requirements related to the internet and the privacy and security of personal information, which legal requirements may change rapidly.

The following are areas of law in this regard that are significant to our business:

Privacy and Security Laws.

Federal, state, and foreign privacy and security laws and regulations restricting the collection, use, retention, deletion, security, and disclosure of personal information limit our ability to collect information or use and disclose the information in our databases or derive from other sources to generate revenues.

It may be costly to implement security or other measures designed to comply with new legislation or changes to existing laws.

These laws and regulations are rapidly evolving and changing and could have an adverse effect on our operations.

For example, the recently enacted California Privacy Rights Act significantly expands and amends existing California privacy law, and there are additional states that may pass their own privacy legislation in 2021 or future years.

Moreover, we have expanded our business over the past year into new jurisdictions, which may subject our business to additional privacy and data protections laws and regulations in those jurisdictions.

There are significant differences among these various privacy laws, which introduces complexity in our compliance efforts and additional costs and expenses.

It may be costly to implement measures such as certain security requirements, contracting terms, assessments, and registrations with authorities that are designed to comply with new legislation, changes to existing laws, or laws in jurisdictions into which we are expanding.

The obligations and requirements applicable to companies under these laws and regulations are subject to uncertainty in how they may be interpreted by government authorities and regulators.

We may be audited or subject to an investigation by a federal, state, or foreign regulator regarding our compliance with privacy laws.

If the Company is determined by a regulator or court to fail to comply with such laws, the Company’s business could be negatively impacted.

Content Regulation.

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Department of Health and Human Services (HHS) and/or other governmental agencies, and, in certain situations, the media.

In addition, we are subject to certain state laws that relate to privacy or the reporting of security breaches.

In addition, we are subject to certain state laws that relate to data security or the reporting of security breaches.

For example, California law requires notification of security breaches involving personal information and medical information.

We may incur costs to comply with these privacy and security requirements.

We may incur costs to comply with these security requirements.

Because there is little guidance related to many of these laws, it is difficult to estimate the cost of our compliance with these laws.

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Sales and Use Tax.

Through December 31, 2019, we collected sales, use, or other taxes on taxable transactions in states in which we have employees or have a significant level of sales activity.

We collect sales, use, or other taxes on taxable transactions in states and foreign jurisdictions in which we have employees, have a significant level of sales activity, or otherwise determine that such collection is appropriate.

While HealthStream believes that this approach is appropriate, other states or foreign jurisdictions may seek to impose tax collection obligations on companies like us that engage in online commerce.

If they do, these obligations could limit the growth of electronic commerce in general and adversely impact our business.

Laws and regulations directly applicable to content regulation, e-commerce, Internet communications, and the privacy and security of personal information are becoming more prevalent.

Congress continues to consider laws regarding Internet taxation.

Laws and regulations directly applicable to content regulation, e-commerce, Internet communications, and the privacy and security of personal information are becoming more prevalent and/or broader in scope.

The dynamic nature of this regulatory environment increases the uncertainty regarding the marketplace impact of such regulation.

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Health Insurance Portability and Accountability Act.

HIPAA regulations restrict how certain organizations (known as Covered Entities), including most healthcare providers and health plans, use and disclose certain individually identifiable healthcare information.

HIPAA regulations also require these organizations to provide reasonable and appropriate safeguards to protect the privacy, integrity and confidentiality of individually identifiable healthcare information, whether in paper, oral, or electronic form.

Covered Entities are required to establish, maintain, and provide training with regard to their policies and procedures for protecting the integrity and confidentiality of individually identifiable healthcare information and must document training on these topics to support their compliance.

Certain HIPAA privacy and security requirements apply to entities (known as Business Associates) that handle individually identifiable healthcare information on behalf of Covered Entities or other Business Associates.

HIPAA regulations restrict how certain organizations (known as Covered Entities), including most healthcare providers and health plans, use and disclose certain protected health information.

HIPAA regulations also require these organizations to provide reasonable and appropriate safeguards to protect the privacy, integrity, and confidentiality of protected health information, whether in paper, oral, or electronic form.

Covered Entities are required to establish, maintain, and provide training with regard to their policies and procedures for protecting the integrity and confidentiality of protected health information and must document training on these topics to support their compliance.

Certain HIPAA privacy and security requirements apply to entities (known as Business Associates) that handle protected health information on behalf of Covered Entities or other Business Associates.

Covered Entities, Business Associates, and their subcontractors may be directly subject to criminal and civil sanctions for violations of HIPAA privacy and security standards.

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In some states, the CNE requirement only applies to re-licensure of advance practice nurses, while in other states, additional CNEs may be required of this category of nurses.

Board certifications (e.g., Certified Nurse Operating Room (CNOR) – certification of perioperative nursing) also require CNE hours/credits, with certain percentages required in specific categories based on the certification type.

Board certifications

(e.g., Certified Nurse Operating Room (CNOR) – certification of perioperative nursing) also require CNE hours/ credits, with certain percentages required in specific categories based on the certification type.

Failure to obtain the requisite and type of CNE could result in non-renewal of the license or certification.

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Centers for Medicare & Medicaid Services (CMS).

CMS has summarized its quality strategy vision as “better, smarter, healthier.” The agency is focused on using incentives to improve care, changing how care is delivered, including through improved coordination across healthcare settings and increased attention to population health, and tying payment to value through new payment models.

CMS has summarized its quality strategy vision as “better, smarter, healthier.” The agency is focused on using incentives to improve care;

changing how care is delivered, including through improved teamwork and coordination across healthcare settings, increased attention to population health, and utilization of healthcare information;

and tying payment to value through new payment models.

Value-based purchasing (VBP), which links payment more directly to the quality of care provided, is a strategy that can help to transform the current payment system by rewarding providers for delivering high quality, efficient clinical care.

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The framework is intended to improve patient outcomes while also reducing burdens on providers.

Promoting Interoperability Programs (formerly the Medicare and Medicaid Electronic Health Records (EHR) Incentive Programs).

CMS renamed the Medicare and Medicaid EHR Incentive Programs to the Promoting Interoperability Programs (The Interoperability Programs) to increase focus on the interoperability of and improving patient access to health information.

The Interoperability Programs continue to encourage eligible professionals, eligible hospitals, and critical access hospitals (CAHs) to adopt EHR technology by imposing payment reductions for failure to demonstrate meaningful use of certified EHR technology.

Promoting Interoperability Programs.

The CMS Interoperability Programs continue to encourage eligible professionals, eligible hospitals, and critical access hospitals (CAHs) to adopt EHR technology by imposing payment reductions for failure to demonstrate meaningful use of certified EHR technology.

By putting into action and meaningfully using an EHR system, providers may reap benefits beyond financial incentives–such as reduction in errors, availability of records and data, reminders and alerts, clinical decision support, and e-prescribing/refill automation.

Further, the 21st Century Cures Act and implementing regulations promote interoperability and the exchange of patient health information, through a number of requirements including a ban on information blocking by healthcare providers, health IT developers, and certain other entities, which is generally defined as engaging in activities that are likely to interfere with the access, exchange or use of electronic health information, subject to limited exceptions.

Allied Disciplines.

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These requirements vary by state and depend on the professional classification of the individual.

HealthStream is an organization accredited by the Commission on Accreditation for Prehospital Continuing Education (CAPCE) and the Florida Board of Emergency Medical Services.

Regulation of Educational Program Sponsorship and Support

There are a variety of laws and regulations that affect the relationships between our medical device and pharmaceutical customers and the users of our products and services, including the sponsorship and support of educational programs.

For example, the Physician Payment Sunshine Act (Sunshine Act) requires manufacturers of drugs, biological devices, and medical devices covered by Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS payments and other transfers of value, including educational programs, given by such manufacturers to physicians and teaching hospitals, with limited exceptions.

CMS regulations require manufacturers to report the physician’s name, business address, and national provider identifier as well as other information including the value, date, form, and nature of what is offered.

payments and other transfers of value, given by such manufacturers to physicians and teaching hospitals, including educational programs for physicians, with limited exceptions.

CMS regulations require manufacturers to report the physician’s name, business address, and national provider identifier as well as other information about the payment or transfer of value including the amount , date, form, and nature of what is offered.

CMS publishes the information on its website.

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The Guidelines have affected and may continue to affect the type and extent of commercial support we receive for our continuing education activities.

The trade associations for the pharmaceutical and medical device

industries (PhRMA and AdvaMed, respectively) have also promulgated their own codes of ethics that further restrict the interactions between industry and health care professionals.

The trade associations for the pharmaceutical and medical device industries (PhRMA and AdvaMed, respectively) have also promulgated their own codes of ethics that further restrict the interactions between industry and health care professionals.

In addition, the AMA has established its own code of ethics regarding Gifts to Physicians from Industry to provide standards of conduct for the medical profession.

We follow the rules and guidelines provided by ACCME, ANCC, and other continuing education accrediting bodies to ensure that our continuing education programming is free from commercial bias and consistent with the Guidelines.

We follow all standards/criteria/guidelines set-forth by ACCME, ANCC, and other continuing education organizations regarding the regulation of educational program sponsorship and support.

This includes full compliance with the Standards for Integrity and Independence in Accredited Continuing Education , to ensure that our CME and CNE activities are evidence-based, designed to improve patient care and/or community health, and are free from commercial influence.

Food and Drug Administration (FDA) and the Federal Trade Commission (FTC)

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Generally, regulated companies must limit their advertising and promotional materials to discussions of the FDA-approved indications.

Therefore, any truthful or untruthful information that promotes the use of pharmaceutical or medical device products that is presented with our services is subject to the FDA and FTC requirements and regulatory oversight including criminal, civil and administrative actions.

We believe that banner advertisements, sponsorship links, and any educational programs that lack independent editorial control that we may present with our services could be subject to FDA or FTC regulation.

Therefore, any information that promotes the use of pharmaceutical or medical device products that is presented with our services is subject to the FDA and FTC requirements and regulatory oversight including criminal, civil and administrative actions.

We believe that banner advertisements, sponsorship links, and any educational programs we may present with our services, even if we lack independent editorial control over it, could be subject to FDA or FTC regulation.

While the FDA and the FTC place the principal burden of compliance with advertising and promotional regulations on the advertiser, if the FDA or FTC finds that any regulated information presented with our services violates FDA or FTC regulations, they may take regulatory action against us or the advertiser or sponsor of that information.

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INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

To protect our proprietary rights, we rely generally on copyright, trademark, and trade secret laws;

To protect our proprietary rights, we rely generally on copyright, trademark, patent, and trade secret laws;

confidentiality agreements, contracts, and procedures with employees, consultants and other third parties;

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and use measures designed to control access to our software, documentation, and other proprietary information.

We own federal trademark and service mark registrations for several marks, including, without limitation “HEALTHSTREAM”, “HEALTHSTREAM LEARNING CENTER”, “HEALTHSTREAM EPORTFOLIO”, “KNOWLEDGEQ”, and “ONESOURCE.” We also have obtained registration of the “HEALTHSTREAM” mark in certain other countries.

Applications for several trademarks are currently pending.

However, there can be no assurance that we will be successful in obtaining registration of trademarks for which we have applied.

The courseware we license to our customers is developed through a combination of license agreements with publishers and authors, assignments and work-for-hire arrangements with third parties, and development by employees.

We own federal trademark and service mark registrations for several marks, including, without limitation “HEALTHSTREAM”, “HEALTHSTREAM LEARNING CENTER”, “HSTREAM”, “HEALTHSTREAM EPORTFOLIO”, “KNOWLEDGEQ”, and “VERITYSTREAM.” We also have obtained registration of the “HEALTHSTREAM” mark in certain other countries.

Additionally, we hold a number of patents related to the solutions we provide.

Applications for several trademarks and patents are currently pending.

However, there can be no assurance that we will be successful in obtaining registration of trademarks and patents for which we have applied.

The content we license to our customers is developed through a combination of license agreements with publishers and authors, assignments and work-for-hire arrangements with third parties, and development by employees.

We require publishers, authors, and other third parties to represent and warrant that their content does not infringe on or misappropriate any third-party intellectual property rights and that they have the right to provide their content and have obtained all third-party consents necessary to do so.

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Licensing agreements with these third parties may not be available on terms acceptable to us, if at all.

Additionally, despite the steps we have taken to protect our intellectual property and proprietary rights, our efforts may not be adequate.

Additionally, despite the steps

we have taken to protect our intellectual property and proprietary rights, our efforts may not be adequate.

Third parties may infringe or misappropriate our intellectual property, and such violations of our intellectual property are difficult to detect and police.

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The information provided on our website is not part of this report and is not incorporated by reference herein.

OUR EMPLOYEES

As of December 31, 2019, we employed 849 full-time and 27 part-time persons.

Our success will depend in large part upon our ability to attract and retain qualified employees.

We face competition in this regard from other companies, but we believe that we maintain good relations with our employees.

We are not subject to any collective bargaining agreements.

HUMAN CAPITAL RESOURCES

As of December 31, 2020, the Company had 1,037 full-time and 32 part-time employees.

Since March 2020, all employees have been required to work from home as a matter of safety during the COVID-19 pandemic.

Prior to the commencement of this requirement, approximately 25 percent of employees worked remotely, while approximately 45 percent worked in our corporate office in Nashville, Tennessee and the surrounding area, with the remaining 30 percent working across the Company’s other offices.

HealthStream’s culture is both exemplified and driven by our Constitution, which is a living document and the lens through which we endeavor to view and shape our actions.

Our Constitution is comprised of the Company’s vision statement, values, and business principles.

Upon being hired at HealthStream, each employee completes a course on our Constitution, which we view to be an important step in engagement, development, and training of our employees.

Our Constitution is available on our website on the Investor Relations page.

This and other information on our website is not a part of this report and is not incorporated by reference herein.

HealthStream is committed to recruiting, maintaining, and growing a diverse, equitable, and inclusive workforce that help us live our Constitutional values as we strive to achieve positive results for our shareholders, employees, customers, and community.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

10 unchanged sentences

Senior Vice President, Corporate Development and General Counsel

Senior Vice President and General Manager, Clinical Solutions

Senior Vice President and General Manager, Workforce Development Solutions

Scott McQuigg

Senior Vice President, hStream Solutions

Senior Vice President and General Manager, Workforce Scheduling Solutions

Senior Vice President and General Manager, Platform Solutions

Scott Fenstermacher

Senior Vice President, Sales

Frist, Jr., one of our co-founders, has served as our chief executive officer and chairman of the board of directors since 1990 and served as our president since 2001.

23 unchanged sentences

In November 2018, she was promoted to senior vice president and general manager of clinical solutions.

Coady currently serves as general manager of workforce development solutions.

She earned a Science in Nursing degree from Université de Moncton.

Scott McQuigg joined the Company in January 2019 as senior vice president of hStream solutions.

McQuigg currently serves as general manager of scheduling solutions.

Prior to joining the Company, he co-founded and served as chief executive officer for GoNoodle for thirteen years.

Before this role, he co-founded and served as chief executive officer of HealthLeaders.

Kevin O’Hara joined the Company in January 2021 as senior vice president and general manager of platform solutions.

Prior to joining the Company, he served as chief product officer for Caresyntax for one year and as chief executive officer for Syus, a predecessor entity, for eight years.

He earned a Bachelor of Arts in Public Policy Studies and a J.D.

from Vanderbilt University.

Scott Fenstermacher joined the Company in 2012 and served as vice president of sales beginning in 2017 and was promoted to senior vice president of sales in January 2021.

He graduated from University of Pittsburg with a Bachelor of Arts and a Bachelor of Science.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business