On its third CEO in four years and facing a tough financial picture, it’s time to think thru the challenges facing OneCall in 2019.
First, workers’ comp is a declining business – claim counts continue to fall. When you’re as big as OCCM, structural factors tend to have a bigger impact than they do on smaller companies. The Net – Fewer claims mean fewer specialty services needed.
Second, the list and type of competitors is changing as firms including Mitchell/Genex diversify. With Genex buying PCS (Priority Care Solutions), it would be logical for Mitchell to switch customers from OCCM to Genex/PCS (where this is possible). This would make sense for two main reasons: a) increases Mitchell/Genex’ top line revenue as the entire service cost is counted as revenue (for most services); and b) increases M/G’s total margin. Word is M/G has moved/is moving specialty business from OCCM to Genex/PCS and this will continue over time. Other entities such as VGM/HomeLink, HomeCareConnect, Paradigm Outcomes, and MTI America (HSA consulting client) are also working aggressively to gain market share. The Net – OCCM will likely see additional loss of revenue and associated margin.
Third, the new CEO doesn’t appear to have any experience with or expertise in workers’ comp. Rone Baldwin’s last job was with Centene, a health plan company with deep expertise in Medicaid, Medicare and some individual marketplace business. He’s also had stints at other benefits and insurance firms, but nothing I saw in property and casualty insurance or claims. Mr Baldwin left Centene in 2016; I asked OCCM what he’s been doing since then; they weren’t able to respond. The Net – With the workers’ comp business flat to declining, OCCM owners have brought in a new CEO who is a healthcare guy.
OCCM has been trying to push into the non-workers’ comp sectors for some time now, with limited success. Come to think of it, I can’t name any work comp entity that has had any appreciable success moving into healthcare.
The Net – I’ll repeat what an investment firm asked me about OCCM – What’s the end game? And I’ll repeat my reply – Either it gets sold intact to a strategic buyer (perhaps Optum or Mitchell), gets broken up and sold off piecemeal, or creditors take it over if/when it runs out of cash.
Note – I sent several emails starting yesterday at 8 am to OCCM asking for comment. As of press time there’s been no substantive reply.