One of the potential side effects of the Concentra-First Health deal relates to Aetna’s workers comp network. Concentra is one of, if not the, largest customers for AWCA (Aetna acronym for their network). Concentra re-sells the Aetna network to its bill review customers; these deals may now be at risk.
Several larger payers and more mid-tier insurers and TPAs access the AWCA network through Concentra’s bill review system. Their reason? AWCA has very strong hospital, ancillary provider, facilitiy, and physician discounts. Many in the WC world equate discounts with “savings” (the connection is not that direct), thus the best-in-class discounts achieved by AWCA are starting to translate into strong market share.
Sources indicate Coventry’s management is quite concerned about Aetna, viewing them as a much more serious competitor in the WC network business than Concentra or CorVel. Now that Coventry’s First Health unit owns (or more accurately is going to own) Concentra, it would not be surprising if the merged company’s management decided to terminate the Aetna relationship.
This is not a forecast or prediction, but rather an attempt to point out a business risk for those payers accessing AWCA via Concentra.
What you write is correct. However, you did not mention that the Aetna PPO has a superb provider credentialing program, and for that reason, many organizations have selected its network. Now the proverbial “rubber hits the road.” Carriers and TPAs will have to determine which is more important – the convenience of connecting to a network through the medical bill review organization (primarily to access discounts) or selecting a top tier network for access and quality as well as discounts and that is, coincidentally, the network contracted by employers for their group health coverage. Remember, Aetna has 14 million covered group health lives – Coventry has 3 million.
Joe: I agree the First Health/Concentra merger is going to take some time to see the full extent of fallout that will occur. Clients are realizing that no longer is this arrangement “payor” neutral now that Coventry owns this lot of companies. TPA’s rightfully should be concerned about using these networks because of the ownership of an insurance company who can (and will) compete against the clients they are trying to work with.
I’m also concerned about your portrayal of Aetna’s network as an alternative to these. In my opinion, since Aetna backed out of the work comp business several years ago, and now is trying to re-emerge in the work comp market, that there should be concerns on the part of those who would use them as well. I’m not sure in their present state that they are able to truly offer coverage nationally.
A better recommendation would be for those interested in looking for alternatives to look at the newer players on the block, those networks that have emerged to be national players over the last 5-10 years. There are several available who offer sound coverage.
What I see for sure is that while the “old boy” networks are struggling to re-invent themselves and are caught up in the intricacies of combining organizations, these “new networks” are sweeping in and winning business away. There is a dynamic here that is going to refresh the industry to some degree, and might I say “It’s about time”!
If Derrence can name some examples of these new networks I and other might appreciate that.
I’m not sure what networks Derrence was thinking of but we us Prime Heatlh. They are based in Tennessee and have very good coverage in all 50 states. They are newer to the market and therefore have not had the time to establish the name plate that First Health, Focus and Aetna (who isn’t national) have but they are just as good from a coverage and savings standpoint. They are also good at the customer service side of things, which in my opinion Focus and First Health had lost site of. I think the industry needs to be careful about giving one or two networks all the power. We don’t need them to be able to call the shots and I believe that is what First Health is going for.
I appreciate that there may be alternatives however, in looking at California, one of the largest consumers in the work comp industry, more and more employers are looking at what they are getting for their dollars. Just as Liberty Mutual was evaluating outcomes with the providers it was using {and thus the network} so are other carriers and employers themselves. This will lead to a change in the Networks and may be their downfall.
Hi all. I’ve been following this trail since PPO development and access is my passion. I am the Director of Business Development for Prime Health Services (aka. Prime Health), Bethany Cook. Thanks for the nice comments, Andrew. One of the many things we do pride ourselves on is the customer service side of PPO. Also, you are correct in saying our name is newer to the market. We have been building our PPO for the past six years and are now in a marketing mode in order to establish the Prime Health name throughout the industry.
In response to Susan, I agree that provider outcomes are becoming as important if not more important than discounts, etc. Gone are the days of giving a client access to the network and saying “this is who you have to use”. Prime Health wants to know who our clients want to use and then if they aren’t already in our network, we will work dillegently to get them in.