Coventry released their earnings report last Friday and hosted a “get to know the new workers comp team” event at RIMS last night. Here are the take-aways.
There will not be a “merger” of the Concentra and FH networks; they are really different animals, have different strengths, and while there will be some consolidation, don’t expect Concentra’s Focus network to disappear for at least eighteen months. And in some jurisdictions, e.g. TX and NY, Focus is significantly stronger than FH; those states will have a “Focus” network for the foreseeable future.
Expect Coventry to use their huge quantity of bill review data (over 12 million bills annually) to figure out which docs are best at managing WC cases. The database is so large, and covers so many cases, that it is perhaps the most valuable single (WC) asset Coventry has. With Dwight Robertson as Medical Director, the company also has someone who understands the business, business processes, and physicians. Used intelligently, this database could be incredibly valuable.
Coventry expects to generate significant additional revenues from integrated sales(case management, bill review, networks). I’m not so sure. First, most of the managed care firms have been trying to sell “integrated” services for years, with not too much success. Second, the larger entities (e.g. Liberty Mutual, AIG, CNA) often have internal CM/UM staff that generate profitable revenue – they aren’t going to give this up. Third, CM is a declining business. Yes, it is still generating millions in revenue, but margins are narrowing and customers are getting more demanding.
As noted here earlier, there is a big push to sell the First Script PBM to all customers. Now that the PBM is separated from the clinics, First Script will have to rely on sales to WC payers instead of cards handed out by clinic front desk staff.
Open questions remain. What happens to the Concentra customers accessing Aetna? Will the Ingenix bill review system go away (not an easy decision as EDI connections, systems links, and custom interfaces will need to be built and tested)? Will Coventry start pricing their networks using something other than a percentage of savings?
Stay tuned…
I am not as optimistic is you appear to be, Joe, about either the robustness of the clinical data of First Health to pinpoint better clinicians (they need duration of disability data) or about sales synergies. It seems to me that Coventry had cash in its pocket and wanted to have a bigger WC story to tell, without that story being necessarily a sure good thing for the bottom line.
Hi Joe, What do you see happening to the network on the Beech side? Will that go away anytime soon? I know with Multiplan and PHCS merger, Multiplan/PHCS will have a very strong network in the industry.