Friday catch up

Another deal goes down, more clarity around IMRs, more data on the impact of the Affordable Care Act – it’s been busy.

First up, Select Medical’s purchase of Concentra.

In what looks to have been a pre-emptive move, Select Medical announced its intent to purchase occ med clinic firm Concentra from parent Humana. (btw great reporting by BI’s Stephanie Goldberg; she has more detail than any other source.)  Concentra, which has about 300 stand-alone clinics and 240+ on-site clinics, claims it handles 14% of all occupational injuries (they refer the more complex ones to non-Concentra providers).

The acquisition makes strategic sense for Select as it adds primary care to its current portfolio of physical therapy, rehab, and long-term care operations.  It also expands Select’s geographic reach considerably, albeit in a different line of business.

We will track the integration of Concentra and Select going forward; expect to see more efforts on the part of Select to work directly with payers, and a stronger negotiating stance with networks now that they have more market clout.

ACA implementation

A big concern and one certainly noted by opponents of ACA was the purported cancellation of large number of employer-sponsored health insurance plans that failed to meet ACA coverage standards.  New data indicates less than 1% of employers surveyed reported cancellations due to coverage standards.

In contrast, somewhat less than 5% of individual policies were canceled due to coverage requirements.

A Robert Wood Johnson Foundation report (thanks to AthenaHealth) report indicates docs are not getting swamped with newly-insured patients seeking primary care.  Key findings include:

• New patient visits to primary care providers increased from 22.6% of all appointments in 2013 to 22.9% in 2014.

• The percentage of visits with patients with complex medical needs decreased from 8.0% of appointments in 2013 to 7.5% in 2014.

So far, doesn’t look like primary care providers are overwhelmed – HOWEVER that is national data, and things certainly vary from region-to-region.

While primary care isn’t being overloaded, the health care delivery system is undergoing wrenching changes – with small, safety-net hospitals probably the most affected. Expect to see closings, consolidation, and takeovers as these most-vulnerable providers lacking scale, resources, and brand find they can’t survive.  For a glimpse into the near-term future, track what’s happening in California.

Work comp

The California State Fund is growing, as the market hardens and rates increase in the Golden State.  California is a bit of an anomaly as the market appears to be softening somewhat in the other 49, but a 52% increase in earned premium indicates the State Fund’s moves to rationalize pricing via tiers along with other insurers pulling back from California is driving more business to the Fund.

Drugs

Finally, great piece from AIS’ Lauren Flynn Kelly on pharmacy’s biggest cost drivers – spoiler alert – the top two are Hep C drugs and compounds…

Enjoy your weekend!