First Health and Concentra (the managed care part, not the clinic part) have been out talking wiith customers and prospects, and information is starting to bubble up from other sources as well. At this point, no final decisions have been made (as the deal is not final that’s no surprise), but there are some clear directions.
Concentra processes a bit over 10 million bills a year through the Ingenix PowerTrak system, which is ultimately licensed from United HealthGroup. Don’t expect the merged company to continue to use PowerTrak. First, that would mean FH’s parent company, Coventry, would have to cut a check each month to UHG. Not likely.
Second, FH already has a bill review system that processes more than twice as many bills that is essentially owned by FH. Adding 50% more volume further reduces the fixed costs associated with that system, while providing much needed cash to continue to improve “4.0”(the internal name for FH’s bill review system)
Reports indicate FH will be consolidating the network contracts sooner rather than later. The addition of Concentra will add some much-needed strength in NY and TX, two markets where, to date, FH has been an also-ran.
Finally, left behind at Concentra are the clinics, Concentra’s bill negotiation entity CPS, and group health network Beech Street. I’d expect to see Beech and CPS sold off before too much longer.
Anyone know the real likelihood of Concentra selling Beech Street? Timing?
Joe what have you heard about the overlap between the Focus PPO and FH. How soon is some of the consolidation going to take place and how drastic will it be?
I have to wonder if the SEC will weigh in. Is Aetna’s new network enough competition to remove worries of a monopoly?
Joe,
Since the First Health acquisition Aetna has been very quite. I know they are having issues in FL and are trying to make a bigger splash in the WC space. That being said I saw yesterday that Aetna had well over a billion dollars in liquid assets. The thought is they should pay dividends or invest these funds. What are the chances Aetna is purchasing a large WC PPO and who might the PPO be if they go down this road to compete with FH.
Concentra just bought Beech; it’d be a pretty quick turnaround for them to sell it now. If they sell off all but the clinics, what is the Welsh Carson exit? Merge it with Select Medical?
Also, if you didn’t yet know, MedServe announced that they lost their PBM contract with Liberty; anyone know where it went?
Concentra will not be selling Beech Street anytime soon. That is a favorite of Dan Thomas’. I dont think he plans on getting rid of it.