I had two very different conversations yesterday.  One was with an entrepreneur and the other with a senior executive at a large WC services firm.  The entrepreneur heads up a relatively new entrant to a niche market, while the exec is looking to grow his company’s already substantial revenue.

The entrepreneur, who we shall call E, listens intensely, believes strongly in maintaining focus and avoiding distractions, and asks lots of questions.  The executive, who we shall call X, is enamored with his company’s approach to the market, loves to describe the wonders of their offerings, and can prattle on for quite a while, certainly longer than anyone  could care to listen.  It’s obvious X believes in what he does and is proud of it.

But no one cares about his company, their history, his product, or his “value prop.”

What E knows, perhaps intuitively, is that she doesn’t have a product or service or “value prop”, she has a potential solution to a potential customer’s problem.  But until and unless she understands that customer’s problem, she’s got nothing to offer.

In contrast, X has SOOOOOO much to offer, and the only reason people don’t buy is they don’t understand how great his offering is.  So, he’s got to tell them, in increasingly strident terms, about the wonders of his unique product offering. If they don’t get it, he’s going to spend lots of dollars “educating the market.”

To be crass, his approach is the legendary and all-too-common “show up and throw up”.

E’s is research, listen, ask, and understand deeply.

This being Vegas, I’m betting on E.

With the national work comp conference well underway, here’s what we saw/heard/learned yesterday.

The session on improving medical networks led by Mark Walls  included a rather blunt and direct Indictment of the work comp network business.  I wasn’t there, but heard from several who were that the panel criticized PPO network developers for failing to consider quality in network recruiting or management – despite their protestations to the contrary.  The reason, as we’ve been discussing here for oh-these-many-years is simple – good providers treating efficiently and effectively make for fewer bills at lower charges.  And that makes for lower revenues for networks charging on a percentage-of-savings basis. And some undoubtedly uncomfortable moments for network folks in the audience…

Kudos to Mark, Pat Venditti of BJC Health, Monica Lichtenstein of Aramark, and Anita Weir or Safeway for speaking the truth.

Deals are getting done.  Vendors are payers are using the conference to finalize agreements and nail down details on negotiations in progress. I”m aware of at least three business relationships that were consummated yesterday, and I’ve no doubt there were dozens more.  This is somewhat unusual, the conference is typically more for starting and continuing relationships than doing deals.

That said, there’s an ongoing demand for really good sales talent and sales leadership.  There just isn’t near enough supply.  The lack of professional, smart, polished sales talent has never been more evident.  Everyone is looking for A players, and finding they’re lucky to find Bs. I’ve been asked by three companies to send talent their way, but there’s not a lot of talent to be found.

Dr Gary Franklin, Medical Director of the Washington state fund, and Dr Sanford Silverman, pain management physician in south Florida, gave a great overview of the problems inherent in using opioids to treat musculoskeletal injuries/chronic pain.  Gary  – who is as passionate and blunt as he is knowledgeable and Sandy – who is terrific at describing the causes of and challenges with addiction treatment – didn’t always agree on specifics, but the 200+ attendees saw two experts talking about solutions.  It was a refreshing, and much-needed change from the usual report on “here’s-how-bad-it-is”.

There seem to be more and bigger booths here than before.  In what’s got to go down as one of the stranger sightings, there are no fewer than three separate booths for EXAMWorks.  There’s the big one at the front, the MES booth, and at least one more for another EXAM subsidiary.  For a “growth” company that has seen revenue from it’s US business increase by a whopping two percent this year one would think they’d be a bit more careful about spending marketing dollars.  Then again, if they are able to convince payers that MES is in fact a different company, EXAM will be able to meet some payers’ requirement/policy to always have at least two different IME vendors.

Which, of course, they’re not.

Finally, I must’ve had a dozen conversations that began with “this isn’t going to be in the blog, is it?”.  No, it isn’t.  If something is told to me in confidence, it doesn’t show up in MCM.  That said, if I subsequently hear the same rumor/report/tidbit from another non-confidential source, I may choose to write about it, but only while ensuing the original source can’t be identified.

So, the sun is coming up, and it’s time to get a workout in before wading once more into the fray.  See you at the Bloggers Speak roundtable this afternoon.

The annual gathering of the tribes has begun, with vendors and prospects flooding into Vegas. This year Nancy Grover reports attendance is up with only two cancelations due to Sandy.  Having lived thru that storm I understand why folks want to move on to some semblance of normal.

Here are a few random thoughts from yesterday.

Odyssey continues to build what has become the largest – and most interesting – collection of “assets” in the comp services business. The acquisition of Harbor Health gives them a very valuable view into provider performance, one that will certainly support their other service lines.

if there’s one predominant theme I’ve seen so far it is OPIOIDS. There’s a track devoted to the topic (I’m on a lead off session this am); Modern Medical announced a comprehensive, integrated approach last night; there are several booths with the word prominently featured, and Emil Bravo’s WorkCompWire piece this week addresses the issue as well.

There are a plethora of private equity industry folks here; investors, research firms, and attorneys and investment banks. With several companies currently “going thru the process”, one would be well-advised to be circumspect in comments and conversations about certain firms, as some folks are almost certainly here just to learn what they can about the companies in play.

There’s an upbeat feeling here. Whether its the improving work comp premium and loss picture, the sense that the economy is finally recovering for good, or something less obvious, people are more upbeat and positive Than last year and way happier than they were a couple years back.

There’s a LOT of this evident among the TPAs. I met with the CEO of one of the largest yesterday; there’s good activity and a good bit more likely coming as insurance rates continue to creep up.

Id be remiss if I didn’t acknowledge the continued strength of Sedgwick. As the first among equals, the giant TPA took a bold step at the Conference last year in committing to full transparency, offering to show their clients their contracts with vendors and details of financial flows. CEO Dave North is to be commended for that commitment.

Posts will be several and hurried over the next few days; lots to do and little time to proof so apologies for typos in advance.

It’s not the latest Odyssey/MSC/OneCall deal…

Nor is it the increasing profitability (if one can call what’s really just the absence of continuing losses “increasing profitability”) of the comp industry.

Sure there’s going to be talk about Sandy and her impact on insurance rates, but that’s not it either.

Nope, it’s the election, and more specifically what is looking increasingly like the re-election. Please spare me the nonsense about lousy Dem turnout and left-leaning pollsters and faulty methodologies and other memes that are rooted not in reality but desperation.

If I’m wrong (and Bob and Cy and T Don and Sandy and other dear friends and treasured colleagues are hoping and praying I am) I’m going to have a really miserable conference…

But back to the key issue – we’re going to have a continuation of a split government – President Obama in the White House, the GOP with a smaller but nonetheless significant majority in the House, and Democrats nominally in control of the Senate (altho the Dems proved they can’t even control the Senate when they have 60 Senators, so 52-54 isn’t nearly enough).

PPACA aka Obamacare is going to be (almost fully) implemented in 15 months.  There will be about 30 million more people with insurance.

The most important single impact is this – When injured workers have coverage, there is no need for WC to pay for non-occ conditions for injured claimants (whether the WC payer follows thru on this is a separate issue).

This is also the most significant short term impact, especially in states such as Texas and Florida where almost one in four working age people doesn’t have health insurance. Think of it this way – a claimant needs surgery for a rotator cuff tear, has diabetes and hypertension. If they don’t have coverage, the work comp payer will pay to treat the diabetes and hypertension – those conditions have to be addressed if the claimant is going to recover and get back to work. Now the comp carrier can send those bills over to the health insurer. 

And, the adjuster, case manager and UR function won’t have to engage in the back-and-forth with the provider over treatment, delaying treatment and extending disability duration.

Finally, with about 30 million more Americans with health insurance there will be a lot less need for hospitals and other providers to cost shift to work comp to make up for revenues lost due to treating the uninsured. Sure, Medicaid reimbursement is lousy and Medicare only a bit better but something’s a lot better than nothing.

Of course, there’s going to be a lot of people trying to get care from providers who just won’t have capacity; this will – inevitably – lead to delays in accessing care for work comp claimants, which is a bad thing indeed.

It’s going to be an interesting conversation.

The big workers’ comp conference is just a few days away, and now’s the time to finish your final preparations and make sure your schedule is set.  Once you’re there, it’s all about making the most of the three days.

Easier said than done.

First, make sure you’ve read – and followed – Sandy Blunt’s list of must-dos and don’t-evers.  I’ll add a couple other suggestions.

1.  Realize you can’t be everywhere and do everything. Prioritize.

2.  Leave time for last-minute meetings and the inevitable chance meetings with old friends and colleagues.

3.  Unless you have a photographic memory, use your smartphone to take voice notes from each meeting – right after you’re done.  Otherwise they’ll all run together and you’ll never remember what you committed to.

4.  Get the NWCDC app for your Droid or iPhone – there’s a web-based version too for tablets.  It has the schedule, exhibit hall layout, local map, and a bunch of other handy information and tools.

5.  Introduce yourself to a dozen people you’ve never met.  This business is all about relationships and networking, and no better place to do that than this conference.

6.  Wear comfortable shoes, get your exercise in, and be professional and polished.  It’s a long three days, and you’re always ‘on’.

Finally, I’ll echo one of Sandy’s points – in these day of YouTube, phone cameras, Twitter and Google+, what you do is public knowledge.  That slick dance move or intense conversation with a private equity exec just might re-appear – to your dismay.

 

The inestimable Maggie Mahar hosts the pre-election edition of Health Wonk Review; for those still thinking over their vote, a read may well help.

And they’re rather middling...

Q3 workers comp revenues were $188 million, down 3.6 percent from Q2’s $195 million and about the same from Q3 2011.  While the loss of ESIS’ pharmacy and other business in January was significant, Coventry has mitigated much of the loss with “client expansion and new sales.”

With the acquisition of Coventry (the entire company, not just the work comp division) by Aetna in the offing, we can expect more noise about the coming sale of the work comp division – but it’s just noise.

It isn’t going to happen.

Recall Aetna’s CFO Joe Zubretsky’s positive statements about work comp, and there’s this from a colleague with direct contact with Aetna and Coventry

“this [the CFO’s statement] is very consistent with Aetna’s outreach to us and a few other WC TPAs early this year to find partners for integrated plans. They don’t want to get into the WC TPA business (good for them) but they want to have good integration and smooth operating links with a few TPAs with whom they can put together WC/FMLA/AM/STD/LTD plans– and maybe loop in the healthcare as well.”

Also, you have to ask yourself why are they doing this?  My guess is that this pharmacy figured out that the margins are better if they process this as a repackaged drug than as a typical dispensed item.

It caused some of PMSI’s folks to wonder just how it works.  Are they squeezing out the gel and putting it into tiny tubes?  Turns out they are just putting a new label on it.  So the plan works like this:

Not crazy, just another day at the office in the work comp world…

What does this mean for you?

Check those NDCs now, stop paying the inflated prices now, demand refunds for any bills already paid, and get your SIU on this now.

Obamacare will not hurt employment, and it hasn’t.

Despite the misinformation campaign from folks who know better, all the evidence indicates health reform will not cost jobs.