The transaction count just got larger; work comp PT industry founder MedRisk has just acquired imaging company MDIA.
The deal adds an entirely new product line to MedRisk’s existing physical medicine management offerings, one with a national network of imaging facilities utilizing a proprietary technology application. While MDIA’s network and technology are well regarded, the lack of a large sales force hindered the company’s growth.
I’d expect MedRisk’s 25+ field sales folks will be on the streets tomorrow talking with their current customers about the benefits of coupling imaging with PT – if they’re not out there already. While some ancillary benefit businesses don’t seem to mesh too well, knowing early on if a claimant has a back problem may well increase PT referrals.
It is highly unlikely MedRisk/MDIA will be able to challenge imaging industry leader OneCall Medical for market dominance any time soon. OneCall‘s huge field force, history of dominating their segment, and focus on capturing “leakage” are well-known. That said, MedRisk’s long-established and high-level relationships with many of the larger work comp payers, along with their deep understanding of those payers’ needs, requirements, and demands will be key to the growth of the new imaging business.
There’s another factor at play here, the belief long-held by many in the payer community that sole-sourcing any service (except pharmacy) leads to complacency while offering two or more vendors in each sector keeps them on their toes.
While this transaction doesn’t come close to the size of other deals announced and pending, it is nonetheless indicative of the rapid pace and direction of change in the workers’ comp services industry. There is both vertical (consolidation within industry segments) and horizontal consolidation (across segments) occurring; single service or product companies are becoming fewer and fewer, while consolidation across specific segments (e.g. PBM/DME Healthcare Solutions/Modern Medical and PMSI-Progressive) continues.
What does this mean for you?
More competition is good.
(Note MedRisk is an HSA consulting client)
