Insight, analysis & opinion from Joe Paduda

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Jun
3

Which work comp service entities are most affected by COVID?

That’s one of the questions I asked 36 payers and service providers; here’s a snapshot of their responses along with some interpretation…

Service types

Briefly, those services that happen earliest in the claim and/or require face-to-face contact have seen the greatest impact as new claims volumes dropped overnight.

Initial visits to occ med clinics, transportation, imaging, PT and rehab, IMEs, Field Case Management, surgery and management thereof have taken the biggest hit to date. Network revenues are suffering as a result, as is UR.

As the shutdown and peoples’ reluctance to expose themselves to infection continue, there have been significant reductions in bill review and network business volume.

Less  – but still somewhat – affected are sectors that get most of their revenue from longer-duration claims. Think home health care and DME, Pharmacy Benefit Management.

Business models

Cash-rich companies with manageable (or no) debt are in far better position to weather the crisis than highly leveraged firms. This generally benefits founder-owned companies and those with solid cash reserves.

Networks may well weather the crisis as they are generally high-margin businesses with relatively low staffing requirements.

Companies that have kept more of their business functions on-shore are in far better shape than those that outsourced critical functions  such as turning paper into pixels (processing documents), clinical support, provider relations, and call center operations.

There’s a lot of nuance to this; thanks to the 36 respondents for their insightful and sometimes surprising views.

What does this mean for you?

Cash is king. On-shoring is critical. 

Note – A public version of the report will be available in 2 weeks; respondents will receive a detailed version. A third version with additional interpretation will be available for purchase.


Joe Paduda is the principal of Health Strategy Associates

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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.

 

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© Joe Paduda 2020. 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.

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