Coventry CFP Shawn Guertin confirmed the company’s commitment to workers comp in this morning’s Morgan Stanley Global Healthcare Conference, noting comp is a : “[somewhat] different piece [compared to their medicare and commercial business] that has performed very well this year and will continue to perform well and [will likely] grow going forward.”
Guertin’s comment was in response to a question from the moderator about potential asset sales or acquisitions; he noted the sale earlier this year of a specialty Medicaid business before mentioning workers comp. Guertin also said observers should not look for Coventry to sell businesses, as their strategic overhaul under Chairman and CEO Allen Wise is pretty much finished.
I’d note that while there are practical reasons that make a sale of some of all of the work comp business unlikely, the financial returns generated by the business are quite attractive, and serve to balance out the Medicare/Medicaid/Commercial health businesses’ cyclical nature.
From a practical perspective, Coventry will own its bill review code within a couple weeks after an investment reported to be well north of $10 million; would find it very difficult to separate out its workers comp provider contracts from the other lines of business, and its case management and UR units have suffered from the decline in claims frequency. Thus even if Wise et al wanted to sell the work comp business – which they clearly do not – they would find it quite difficult to extricate it from the rest of their operations.
The twenty minute presentation also included comments on Medicare, medical loss ratios and factors affecting the MLR, and Coventry’s strategic thinking concerning health reform.
More on that to come…
Sep
14
