Broadspire, one of the largest TPAs in the country, has announced a new network strategy which goes by the acronym BOLD, that is notable as much for what’s missing than what’s present.
There’s no mention of Coventry in the list of Broadspire’s network partners.
I’ve discussed this at length with Danielle Lisenby, Broadspire’s top managed care exec, and the company’s president, Ken Martino. Danielle, Ken, Medical Director Jake Lazarovic, MD have led the company’s efforts to develop and implement a medical management strategy based on “a better answer than the same old broad based discount network ” approach.
Martino sees the BOLD network as a differentiator for Broadspire, a unique solution that is clearly different from those offered by the company’s competitors. Martino also noted that the extensive analysis conducted by Broadspire confirmed their belief that “greater savings could be obtained using multiple partners than relying primarily on one network.”
I’ve seen the analysis, and the numbers support the company’s assertion. When examining network penetration and net savings percentage, the new strategy provides better results in all but three states, and in those the difference is minimal.
On the flip side, the net increase (penetration x savings) in many states increases by mid-single digits, with a couple well over ten percent.
Sources outside Broadspire indicate Coventry is none too happy with Broadspire’s decision. According to Coventry reps (albeit second hand), Broadspire wasn’t willing to ‘partner’ with Coventry. I’ll leave it to readers to puzzle out how exactly Coventry defined ‘partner’.
What does this mean for you?
Coventry dominates the work comp PPO business. They are, far and away, the leader in market share, and use that position to their advantage. Since the exclusive marketing deal with Aetna was inked a couple years ago, Coventry has been raising network access prices and strongly encouraging customers to utilize their network in most, if not all, jurisdictions.
From a business strategy, this makes a lot of sense – from Coventry’s perspective. Using market clout to drive higher margins and hold off competitors is just good business – for the market leader. Over the near term, this has paid dividends for the work comp division’s parent, as the network operation has generated significant cash flow.
I’d highlight ‘over the near term’. Over the longer term, Coventry’s approach is bound to alienate payers looking for more flexibility, more control over their medical spend. As it is, payers utilizing the ‘one network’ approach are ceding a significant amount of control over the largest part of the claims dollar to an entity that makes money on medical bills – the more bills that are generated, the more money they make.
Even a non-actuary like myself can see the problem – for the payer – with that business model. Now Broadspire has become the first large payer to break away entirely from the Coventry model. Their numbers are compelling; it will be interesting indeed to watch how self-insured employers react.
Note – there are several other large payers also looking deeply into new medical management strategies. Perhaps Broadspire’s move will push these efforts along.
Jun
18
Though Broadspire’s approach may appear to be an effective competitor to the Coventry approach, prudence suggests that Broadspires’ ability to reprice medical bills in a timely manner (in mere days) with each and every one of its network partners may stretch its infrastructure. Additionally, assuming that its network partners’ provider database files are updated in a timely manner – a key to the repricing function – one can anticipate serious delays and errors. And, finally confidence that the negotiated rates are current, as well as the best available, and fungible as Broadspire navigates from one system to another may be the undoing of its grand design.
Joe, get access to Broadspires’ repricing mechanism and then draw a conclusion that this is a “new” medical management strategy. As a student of history, Coventry nee First Health nee CCN went the same route and found it to be unsupportable.
Ralph – The issue, as you point out, is indeed data quality. Coventry’s data, and the data from Aetna, it’s network supplier in at least 17 states, is notoriously inaccurate. I am aware of several large customers who find the PA data in particular to be rife with errors; in many cases 40% of panel providers have incorrect data. PA is by no means the only state with problems, and these problems have existed for years and continue to plague Coventry’s customers.
In contrast, provider data in smaller networks tends to be much more accurate and current.
In re meeting timeliness standards for repricing, this is a technology issue that depends on building and maintaining EDI links; once these are built (and they are for Broadspire’s current network partners) there’s no additional workload or burden.
I disagree with your suggestion that Coventry’s history in any way parallels Broadspire’s new initiative. In fact, I’d say that in NO way are there parallels.
Paduda
It is lonely at the top of the food chain, but you eat better.