Aetna and Coventry are negotiating a deal whereby Coventry’s WC customers would gain access to the entire AWCA network thru Coventry. While parameters could change (or the thing could fall apart entirely), multiple sources indicate the AWCA network would replace most or all of the Coventry network offering (in those states where AWCA is viable).
This would represent a sea change for many payers, and yet more consolidation of power at Coventry.
While many payers may howl at the loss of competition in the network space, they only have to look in the mirror to ID the guilty party.
Despite lots of rhetoric about the need for an alternative to Coventry’s First Health, it is now 2007 and precious little has changed since the mid-nineties — most payers are still buying their health care as cheap as they can, most network directories might as well be the yellow pages, and FH continues to dominate the market. The Concentra deal further consolidated the WC PPO business, with Coventry’s share now likely above 60%.
The rationale for the deal is compelling for both parties. While Aetna has made inroads, notably at industry giants Liberty Mutual and the Hartford, other large payers continue to suffer from paralysis by analysis. And, Aetna’s largest customer has been Concentra (the managed care entity bought by Coventry, not the clinics). If Aetna and Coventry aren’t able to strike a deal, Coventry may choose to cancel the Aetna-Concentra contract. Conversely, if the two parties are able to work together, the arrangement could rapidly accelerate AWCA’s growth.
As for Coventry, this may be a ‘if you can’t beat them, join them’ strategy. As noted above, AWCA has been enjoying some success, at Coventry’s expense. Rather than continue their efforts to block AWCA’s growth, Coventry can now profit from it.
What does this mean for you?
Less choice, less bargaining power, and fewer other options means leverage is shifting to the other side of the table.
The good news – Aetna, the 3rd largest health plan in the US, has an excellent NCQA accredited quality management program and superb data analysis capacity in its informatics company that could be brought to the Work Comp provider space. The bad news – Work Comp payers do not understand quality and will not ask for it! As you note, Work Comp payers (and their like-minded vendors) cannot get beyond looking for the cheapest care – the heck with quality and quantity – just continue to show those discounts and rake in the percentage of savings dollars! Quality? “NCQA-like” is seems to be good enough – but is it really? The recent reports have shown that not to be the case!