Ok, time to get back to examining Coventry. The second quarter earnings report is out, and things are looking good on the commercial side. I’ll look at that in detail later; for now, the work comp business is top of mind after the Concentra deal.
Concentra will add significant topline revenues to the WC division of Coventry – and none too soon. Revenues have been flat to declining over the last seven quarters, despite Coventry management’s oft-stated desire and intention to grow the business. (Q2 2007 revenues were $48.8 million, a 10.5% drop from the same quarter last year‘s $54.5 million).
Here are the figures
2006
Q1 – $51.4
Q2 – $54.5
Q3 – $51
Q4 – $51.1
2007
Q1 – $49.2
Q2 – $48.8
On the non-financial side, there’s a little info bubbling up to add a bit of strategic color re Coventry’s strategy with the “specialty division” (which to date is all WC). Perhaps most telling is the decision by Coventry to layoff most of the FH sales staff in favor of Concentra’s people. Sources indicate this decision came from the top. If so, this is a clear indication that management understands the downside of First Health’s lousy customer service reputation and has decided to change it.
About time. I do not know a single managed care exec, claims professional, or program manager with consistently positive comments re FH’s customer service. And that hasn’t improved recently. Here’s hoping the message gets through.
Before I get buried in nasty emails, I know, there (were) are more than a couple good sales folks at First Health, and a few of those folks are now out the door through no fault of their own. The key for the company going forward will be its ability to rapidly change the culture to one that is customer-centric.
The expression, “When the going gets rough the tough find a scapegoat.” applies.
FH sales did not get the support (IT and other) to provide the customer service needed. Provider networks/contracting could not get the IT support for bill review. Bills paid correctly were an error. Sales staff took the hit, not Coventry managementwho would not/did not provide the leadership needed to correct issues and service problems.
Joe,
In First Health’s defense, Concentra’s (FOCUS) customer service is as awful as theirs, if not worse. In my opinion, it’s like the blind leading the blind. Two arrogant companies that, unless their revenues tank, will not fully realize the importance of true customer service. This gives the smaller managed care companies a chance to chip away at their revenue base. So, don’t keep reminding them how terrible they are. We don’t want them to change.