No, I’m not obsessed. At least not with the Concentra-FirstHealth merger. But information keeps popping up about various aspects of the deal that a few readers actually find very interesting.
The latest concerns the IME business.
In November, 2001 Concentra bought NHR, a big provider of Independent Medical Exams in the work comp world. An IME is an exam of a work comp claimant by an independent physician, with the objective being an objective determination of causality, treatment progress, suitability for work, and/or myriad other issues.
After the NHR acquisition, Concentra’s IME business had $92 million in annual revenue. Sources indicate it is now about $28 million.
That represents a 69% decline in revenue over a five year period.
Sources indicate that among the remaining $28 million are several blocks of business that may move to other vendors in the near term. And, Concentra has at least one large IME customer (auto insurance in MA) that they want to keep out of the deal.
Joe: Suggesting that sources “indicate” ;leads the reader to assume the “sources” to could very well be competitors of Concentra’a IME program.
One would hope your obsession with the whole Concentra/Coventry deal doesn’t let your well known and respected blog become a dumping ground for giving credibility to 3rd parties who would hope to benefit by planting such “factual data” .
Part of the resizing of the Concentra IME book was done with a strategy of exiting non-profitable or juris unfriendly states.That gives at least one factual reason for a smaller scaled revenue base.I am sure there others if you looked to other sources.
Usually when competitive forces decide to play the rumor game they are the weaker of the two.Like the big bully in grade school, insecure and loud mounthed.
Alex – I’m well aware of the importance of credibility. I’m also very careful about sources, having been burned in the past. In this case, I know the history of Concentra’s problems in the IME business well. NHR had a viable and highly profitable IME operation, which Concentra took over, and over time fired the management and installed their own. Two months after that manager was installed he too was fired, in large part due to the rapid decline of the business. The IME business never recovered.
All that said, the point remains, revenues declined by 69%. That’s a fact, not a rumor.
Joe,
I suspect the decline in IME’s could stem from concerns about just how independent these exams actually were in practice. Consider for instance that a well known disability insurer was on 60 minutes for its claim practices, including IME’s. There has also been a shift to FCE’s–functional capacity exams which when done right produce a clearer, more objective measure of true functional capacity as it relates to an actual claimant occupation.
Joe:
Good to hear that the message being delivered is based in something other than inuendo and competitor bantor.
Revenue decline might be a good thing if there is logic to a smaller top line driving a desire for more margin.Lets face it..this “business” only exists because claims professionals have to much on their plates so they transfer and adjuster function to a 3rd party who gains thier revenue from “admin fees”.
Its a business that should be examined closely to evaluate ROI.Not once have I seen any IME company anywhere talk about ROI.Likely if they did most would be embarassed..IME’s create resolution friction ,are in many cases set-up as a strategy when none other exists..and if objective exams are not the game..then its a hired gun outcome with litigation likely the next step in protracting an outcome.
Concentra’s AIS ( Auto Injury Services ) , a NHR spin-off has an IME delivery model as well..perhaps the revenues across the board have shrunk..but that alone doesn’t address profitibilty..Sometimes smaller is better.
What do you think about MES? These folks seem to be on a hunt..and Concentra team members seem to their targets..must say something about what talent does reside in Concentra’s fold.??
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