International private equity firm CVC Capital Partners will acquire a majority stake in workers’ comp physical management company MedRisk.
The Carlyle Group is the current majority shareholder and will retain a “significant stake” along with MedRisk senior management.
I could not be happier for my many friends at MedRisk; they built a company from a start-up in 1994 to it’s current position as the dominant provider of physical medicine management in work comp. The speciality network business essentially started with founder Shelley Boyce’s idea that grew from a business school paper (that earned a less than stellar grade). In 27 years, Shelley, Mike Ryan and their colleagues grew Medrisk to a company with hundreds of employees ensuring almost 400 thousand injured workers have received the best possible rehabilitative care.
I know the CVC people well; they are thoughtful, incredibly smart, understand healthcare, and have the resources to ensure MedRisk has whatever capital it needs to continue its growth.
Focus – While pretty much every other work comp services company (except for PBM myMatrixx) was diversifying, MedRisk stuck to its business. The work comp physical management business is a big one at almost $5 billion, offering plenty of opportunity for growth. This focus enabled MedRisk to concentrate on doing one thing very, very well, instead of distracting management with ventures into “potential opportunities.”
A relentless focus on service also paid off very well. I wrote this some years back:
For years, MedRisk had the niche almost to itself, focusing its sales and service attention on corporate buyers. Along came Align Networks, a start-up that concentrated on the desk-level user, delivering stellar service to each and every adjuster and case manager. Align was quite successful, eventually becoming the largest vendor in the PM management space.
A misstep by MedRisk helped Align. Some years ago, MedRisk chose to outsource key functions, including some aspects of IT, billing, and outbound call center functions including patient scheduling. This did not go well, and the resulting dissatisfaction among desk-level users led some customers to switch from MedRisk to Align.
Confronted with the loss of business, MedRisk got back to basics. The lesson was apparent; a dramatic change in customer service was critical. That involved a major shift in understanding about the central importance of the desk-level customer, the provider and the patient, and a recognition that those customers required, above all, personalized service.
Management – Investors invest in management. MedRisk’s management team is second to none, and has only gotten better with the addition of Danielle Lisenbey as President. CEO Ken Martino stays on as does Executive Chair Mike Ryan and most of the great people who made MedRisk what it is today.