PBM (and CompPharma member) myMatrixx is exiting the ancillary benefits market, turning their DME and home healthcare business over to long-time partner VGM HOMELINK.
According to the press release, myMatrixx will: “move the myMatrixx ancillary business to HOMELINK in an effort to allow both companies to focus on their core business. As a result, HOMELINK will begin servicing all myMatrixx ancillary business…”
This is in process now. HOMELINK’s Jim Nygren told me his company’s new direct clients:
“will have the option to use our electronic portal or contact us using phone, email and fax. Our systems has been in place and used by our clients for many years. As an example of our focus on service, HOMELINK has a live individual answer every call.”
Expect the company to move to firm up its presence in the workers’ comp space. HOMELINK has had a long standing relationship with Healthesystems that enables a few very large payers to access their services via Healthe’s Ancillary Benefit Management service; it will be selling direct as well in the future. To do that, Nygren said they will be
“doubling sales staff and investing in multiple national marketing campaigns…[this is our] First venture into anything other than organic growth. We will be more aggressive in sales and marketing, building on our relationship with existing clients and growing business through new ones.”
A myMatrixx transaction had been rumored for some months, but only recently had it become known that the Tampa-based PBM was just looking to spin off the ancillary business. Sources indicate the ancillary business’ annual revenues are somewhat less than $10 million; earnings are said to have been marginal.
A couple general observations.
- The ancillary benefits business – durable medical equipment, home health in particular – is fundamentally different from pharmacy. Pharmacy is the most standardized and automated type of care in the workers’ comp sector. Compared to pharmacy, DME and HHC are decidedly not standardized or automated.
- While some work comp service companies are looking to be one-stop shops, others are focusing on doing one (or perhaps two) thing(s) really well. Both strategies can work – if the overarching guide is customer service. However the one-stop shop strategy is a LOT more difficult to implement and even harder to maintain. A screw-up in one area almost inevitably taints the entire brand…
What does this mean for you?
Focus is a very, very good thing.
I’ve got to imagine this puts them in a better position to sell the company to a competing PBM in the future.
Hi Randy
Thanks for the comment. myMatrixx may have looked for investors or buyers a couple of times over the last several years: many companies have done this as prices have been high. I can assure you that investors and strategic buyers have expressed a lot of interest in the company. Perhaps myMatrixx’ owners decided they would be better off remaining independent.
GREAT call!
They have been on the market for years. Lots of transactions have occurred in the PBM space over the same period. Not sure why nobody wants them.
Lots of interest no doubt, but no buyer. Priced too high? Something not right?
Randy – thanks for the note. myMatrixx is a very well-run PBM with high customer satisfaction. As someone quite familiar with the industry and individual PBMs, I have never heard of anything “not right” with myMatrixx.
Joe,
Ancillary Sales, in our WC market has always been most successful when treated like a “hand to hand” transaction however myMatrixx and HOMELINK have always effectively maximized the automated approach therefore I expected HOMELINK to grow that $10 million very quickly.