Insight, analysis & opinion from Joe Paduda

< Back to Home


OneCall’s latest numbers

Two faulty assumptions and a big change in fee schedules have combined with management missteps to make OneCall Care Management’s brief history a painful one.

The latest financials indicate things have deteriorated significantly over the last few years.

How did OneCall get here?

The original One Call was focused solely on the WC imaging space. Under Kent Spafford’s able leadership, the company was highly profitable, very creative, and pretty much without any significant competition. One Call was purchased by Apax, then merged with other companies in transactions valued at around $3 billion (some equity and a lot of debt financed the transactions).

The fee schedule change noted above was California’s switch to the CMS fee schedule in 2014, which occurred simultaneously with CMS’ significant cut in reimbursement for imaging. The result was a dramatic drop in margins in California; other states followed suit and the result was a significant decline in earnings.

Faulty assumptions

While the fee schedule change was an unpredictable event, other problems have been self-induced.

Founded in its present form 2013, OCCM struggled since its inception to validate investors’ belief that A) the whole is greater than the sum of the parts, and B) there is lots of “whitespace” open to service providers (not so much).

(I’ve written extensively about these challenges; previous posts are here.)

Fact is most payers don’t see added value in buying everything from one entity – unless each service line is itself best-in-class. Rather, most buyers want to be able to pick and choose the networks, specialty networks, UR and CM providers they work with – and change them when they find better options.


At its height, OCCM’s earnings were reported to be around $280 million. Those days are long past: sources indicate EBITDA has dropped by almost a third, and my take is it will continue to decline.

2018 has been a tough year; an investment industry source indicated Q3 EBITDA was down 15% from the prior year’s quarter, while revenues actually increased 3%. Annual EBITDA saw a smaller decrease of about 10% for the 12 months ending 9/30/18.

Reports indicate total debt is just shy of $2 billion, and debt service (the interest OCCM pays to its creditors) is about $160 million annually.

Here’s the important stat – with Pro Forma EBITDA (EBITDA increased by management adding stuff that isn’t normally accepted by accountants) of $190 million, there’s not a ton of free cash (about $30 million) available for investments in staff, marketing, and other expenses.

Reportedly total leverage is 10.3x based on total debt just shy of $2 billion.

A big chunk of expense is for Polaris, the much-anticipated platform solution that saw an initial “rollout” of what was described to me as an abbreviated version a couple months ago. Evidently, full rollout is scheduled for 2020, when the company will realize the majority of the costs of the project.

While the company is looking to Polaris to improve efficiencies and reduce costs, my opinion is Polaris is intended to address investors’ problems – not customers’.

This from a post on MedRisk’s resurgence a couple years back [MedRisk is a consulting client}:

One Call is all-in on a technology solution, investing millions in a customized application intended to deliver on the “One Call” promise (currently the seven different services offered by OCCM have separate systems and processes). “Polaris” is slated to be “fully implemented” in Q1 2018, although it’s not clear what “fully implemented” means.

don’t believe “automating” and off-shoring key customer-facing functions is the right answer, not in a high-touch business where adjusters, therapists, physicians, and patients all are key parts of the rehabilitation process.

Cost cutting is a necessity if the firm is going to continue to invest in technology and other critical areas; a staff reduction in 2016 significantly reduced client-facing staff.  Four sales reps were let go last week, a move company representative said was in keeping with OneCall’s intention to shift account management and related functions from the field to internal staff.

So, getting more efficient may be at the cost of improved customer service. If it is, that’s the recipe for further trouble.

Investors may take heart from one very successful turnaround. PMSI was teetering on the edge of the abyss when Eileen Auen took over. Several years later it sold for about ten times what it was worth when Ms Auen started. The company then became the core of what is now OptumRx’s work comp PBM.

That said, the situations are quite different, the changes needed even more dramatic, and executives with Eileen’s talent and abilities are rare indeed.

What does this mean for you?

For investors, listen to people who actually understand the business before spending your gazillions. Many saw this coming.

This also brings to the fore the issues inherent in private equity investors’ fascination with work comp services over the last decade, chiefly what happens when things don’t go perfectly. High debt loads can choke off critical investment in customer service and product development, especially when revenues start to decline.

17 thoughts on “OneCall’s latest numbers”

  1. The problem with One Call is they thought that cutting out competition and acquiring anyone in their market was the answer to their problems. The competitors that they purchased were competitive in that space because they had superior customer service and technology. Unfortunately One Call was short-sighted by not taking the proprietary technology that was acquired with those companies and using it to their advantage. Some very poor decisions were made at high levels which is now trickling down to the bottom line.

  2. Kim, I agree with you. What was once a strong hand of services is now a hand of mediocrity. How do they wind it all back now?

  3. I called this a couple of years back, everything in this blog has come out of my mouth in different conversations. I have 25 years in this industry, owned a full suite national ancillary service company, sold to MCMC in 2012 and remained on to date as VP. We are now York who I feel is following some of the same bad moves OCCM has tried. Kent, who I have known for some years had the right idea but they grew to fast, paid too high multiples for acquisitions and are now paying the price.

  4. Their Customer Service is a complete mess and getting worse…service delays, missed orders, etc. The “Lip Service” is their Polaris program is supposed to correct this but highly unlikely. It’s the old Coventry days when they were the Big Guerrilla before being acquired by Aetna…customer service isn’t the top priority. Then there is Harbor Health under their umbrella that claims to have Data Analytics….been 4 years and still waiting…

  5. When One Call was One Call Medical, it was a great company. The leadership was first-rate with Kent Spafford, Don Duford, Pamela Landefeld and some others. Unfortunately, when the acquisitions started happening, they “acquired” new leadership and new ideologies. Some of the best left their positions and moved on, and some tried to stick it out in different positions, but the leadership changes coupled with less than stellar technology (an unadapted platform) resulted in a big change for their customers. The sales team was enormous, people were let go left and right, and some really great folks ended up leaving on their own accord (reading tea leaves, perhaps). The team that was left was ill-equipped to handle such a large portfolio of services. Lack of training, lack of communication, and a culture that made people feel really, really undervalued, tends to lead to a whole lot of disappointment (for the internal team and many customers). OCM (prior to the additional C) was a successful family of folks who knew their customers and found real solutions to problems in the imaging landscape. OCCM doesn’t check either of those boxes.

    1. I totally agree with you Michael. I worked for One Call for many years (2002-2016). Kent, Don and Pamela were top notch, along with others, and I truly loved going to work. Then the acquisitions started……things just weren’t the same. At first there was an uptick, but it didn’t last long, When One Call merged with MSC, the writing was on the wall. The GA office that I worked in closed, my position was sent “off shore”. I have moved on but have always wondered what would have happened had they chose not to do that.

  6. Hi Joe,

    Happy Holidays!

    I’d like to add one more important issue why many payers aren’t seeing added value anymore of using scheduling networks such as OneCall and others >>> Low medical provider pay.

    In order to maintain enough profit margin to make their investors happy, these networks need to pay therapists and physicians, who as you agree are all key parts of the rehabilitation process, very low rates. In many states, like California, these networks re-sell medical services to payers and employers at a 75% – 100% profit. In these cases, 40-50% of so-called “medical payments” do not reach the provider who cares for the injured worker.

    Such low provider pay leads to less access to top quality care, unhappy providers, scheduling delays, potential overutilization and much more.

  7. 100% correct and on point! Customer Service is no longer a motivation to be a business partner with One Call Care Management on that variable itself.

  8. Nice piece. OneCall grew too fast. The computer problems were supposed to be solved two years ago. You have a management team that knows very little about what their clients actually do. A nice lunch does fix the problem when supplies for CAT don’t arrive. One C suite Sales Exec sold manufacturing parts. Other than that it is a well oiled machine.

  9. Joe, great article. I think we actually forget that the acquisitions started much earlier in 2008 when MSC began purchasing transport companies to grow their numbers (and sold off their pharmacy to Express -what a disaster); fast forward 9-12 company acquisitions later no, synergies, and more importantly there was never any intent to create a platform for combined “one-stop shop” referral source. This shows you that early on folks had no idea/intention to create a real solution for the comp industry – Just get in/get out ASAP; think Monitor Clipper – and some of the folks that headed the company at the time around 2008-2012; where are they now – ? Made lots of money, but left a trail of destruction….. recover has been slow

  10. Dick Turkanis nailed some great points! In addition to this you now have to pay a call center rep an avg of $15 per hour to coordinate the care for the claimant between the payer and the actual provider. Which takes a total of about 1 to 1.5 hours spread over a few days. The only way to make this model profitable is through hard metrics and lean staff with a highly-skilled leadership team that knows this space. Managing the expectations of the PE firm out of the gate would do wonders making them aware that a P&L with a 20% or higher EBITDA is not so much reality when you are processing DME, Translation, Transportation referrals with up to 40% below SFS rates. Eileen along with other executives at PMSI like CFO, Steve Palmer and Lori Daughtery are some of the best I have worked with when I was with PMSI. I keep hearing the last 2-3 years people using the buzz words “Amazon” model. Wanting to automate this space to “choke” out the customer service, to use Joe’s perfect term. This is the complete opposite of our entire value add prop in the industry, SERVICE! Another great article on service. Hope those reading are taking this to heart.

  11. Having been there for most of OC’s mergers and acquisitions, OC was once a great service-oriented company, lead by solid leadership team, focusing on doing the right thing. Working at OC for 13 years was a rewarding experience, and I value the relationships that were cultivated during those years.

    Unfortunately, the culture, society and purpose that once was has deteriorated in recent years.

  12. Price transparency and service. In a working environment that is increasingly complex getting the details right with a smile makes the difference. If you want better outcomes don’t be afraid to treat your medical professionals as partners.

  13. Arrogant leadership that made decisions based on personal preference rather than financial consideration drove this company into decline. As a former exec, I speak from a place of truth. Such a shame. It must be killing Kent Spafford to see what he worked so hard to build up be torn down so quickly.

  14. Joe….you can see with all the comments this is a “hot” topic. I worked at One Call for 9 years and started with the Diagnostic company under the leadership of Kent Spafford & Don Duford. We worked hard and had fun with amazing results. I was there under the mergers and witnessed OCCM go from a “customer driven” company to a “commodity driven” company. It started with Joe Delaney taking over and moving forward to current leadership. Companies succeed or fail due executive management and establishing proper culture. For the last several years, the morale has been terrible. Sadly, the customers suffer and move their business!

  15. Joe, having just read the excellent WSJ article on GE’s fall* (I’ll paste a link below), there is some similarity with One Call’s saga. These involving management, culture, transparency, and operational challenges of getting away from being excellent in one business to becoming a sub-optimal jack of all trades. Wishing you and your readers blessed holidays and health and success in 2019, Marc *If the WSJ link works please know that it is a very long article.

Comments are closed.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



© Joe Paduda 2024. We encourage links to any material on this page. Fair use excerpts of material written by Joe Paduda may be used with attribution to Joe Paduda, Managed Care Matters.

Note: Some material on this page may be excerpted from other sources. In such cases, copyright is retained by the respective authors of those sources.