Is the WC PPO marketplace becoming a monopoly?
Managed care execs at WC payers are getting increasingly nervous, and well they should be.
There are major changes afoot in the WC managed care market. The consolidation at the top means that changes in policy and practice by the industry leader(s) is likely to have much more impact today than last year. And if that consolidation continues, customers and providers alike may find themselves with even less bargaining power.
Coventry is consolidating its industry leader position, and looks to be ready to use that leverage on customers and competitors alike.
At this point they have no national PPO competitors; AWCA is building as fast as they can, but market acceptance has not been as rapid as hoped.
On the bill review side, Coventry continues to struggle with their 4.0 application; while some users (AIG) seem to be operating reasonably well, others are not having as much success.
But the bill review piece is an adjunct, a loss leader. The revenue and profit driver is the network. And if Coventry is able to consolidate it's position as the market leader, and no other alternatives present themselves in the near (12-18 month) future, their customers may well find themselves landing on the bright blue squares.
Comments
Joe,
The missing link with all of the national WC PPOs such as Coventry and AWCA is that they fail to offer a management tool to assure referrals are made within their networks. It's another loss leader, but one that would allow the WC PPO networks to increase network participation and marketshare. Otherwise, providers quickly realize they are taking discounts on existing work. The old backdoor discount approach which providers despise. When this occurs, the networks lose credibility with their network providers as they easily figure out that they can get out of the networks and still obtain the work. If and until the networks begin earning their revenue by providing a service to increase the volume to their network providers, their network participation and PPO revenue will continue to decline.
Linda
Posted by: Linda | September 5, 2007 1:14 AM
I agree with both Joe and Linda. The reality is that there aren't many other PPO options. Those clients that were banking on leveraging the Aetna option over Coventry lost real big. However, there is a new solution in the market that is gaining momentum. Check out VIIAD at VIIAD.com.
Posted by: April | October 3, 2007 2:19 PM