Thanks to ongoing mergers and acquisitions, there are fewer managed-care options than ever. That just may make this RIMS the best time to look for new partners.
In his 2004 book, "The Paradox of Choice: Why More Is Less," Barry Schwartz makes a persuasive argument for the notion that having too many options from which to choose actually decreases buyers' satisfaction levels. To support this hypothesis, Schwartz highlighted a study by Columbia and Stanford University researchers that found that, when participants were presented with a smaller selection of chocolates, they were actually more satisfied with their taste than when presented with a wider array of choices.
Although it seems at first somewhat counterintuitive, based on our recent experiences reviewing a host of RFPs for several large workers' compensation claims payers, the theory definitely seems to apply directly to our market.
Thanks to an unprecedented number of mergers and acquisitions, buyers in the workers' compensation managed-care space are now getting an opportunity to test Schwartz's theories and decide for themselves whether the "chocolate" now tastes any sweeter with fewer options to choose from.
Over the last 18 to 24 months, there has been a significant and dramatic contraction of players in the workers' compensation managed-care marketplace. The bill-review market shrunk with StrataCare's purchase of CS Stars and Mitchell's acquisition of Ingenix's PowerTrak offerings. The case management arena narrowed with Genex's purchase of Intracorp. And then ExamWorks acquired every peer review/IME company known to mankind. So there is no denying the reduction in buying choices available to employers and claims management organizations.
Fewer options are definitely not necessarily a bad thing in this case. With fewer competitors, more opportunity exists for each remaining player to differentiate themselves from the rest of the field. As differences between each company's offering become more pronounced, it becomes easier for potential buyers to identify the solution that will best match their needs. It is much easier to see one positioning itself as a generalist, one-stop shop for all your managed care programs while another is focused on becoming the best-in-class option for case management.
For example, as little as five years ago, at least a half-dozen generalist, managed-care firms all vied for employer and claims payer business. It was extremely challenging to discern meaningful differences between the programs offered by national companies like Coventry, Genex, Intracorp, CorVel, MCMC and Bunch & Associates. A proposal written by one could just as easily been written by any of the others. As mentioned before, however, this market has contracted (with Genex acquiring Intracorp, CorVel trying to morph into a third-party administrator and Bunch being acquired by StrataCare's parent company) and it is suddenly much easier to differentiate between the remaining firms.
BETTER VIEW OF BILL-REVIEW OPTIONS
This same scenario is playing itself out across the entire workers' comp managed-care spectrum. In medical bill review, where there used to be nearly a dozen different bill-review software platforms to choose from, buyers today are realistically "limited" to four. While all four platforms offer solid functionality across all aspects of the bill-review process, it is increasingly easy to see how one is seeking to differentiate itself based on efficiency and bill throughput, while another is focused on automated workflow management and a third appears to be differentiating itself as the low-cost option willing to enable and integrate a wide variety of specialty networks and services.
For potential buyers, the decision comes down to answering a few simple, high-level questions such as:
-- Would you rather have a single PPO with big inpatient hospital discounts or the flexibility to assemble a direct-contracted "mosaic" of different (potentially stacked) networks in each jurisdiction?
-- Do you want the vendor to provide integrated specialty review programs, or do you want to assemble your own "best-in-class" collection?
-- Is it more important to maximize bill reductions or minimize operational expenses?
Then they can quickly gain clear guidance on which platforms and partners will provide the best potential fit to their program.
PBM CHOICE
Perhaps nowhere is the dramatic benefit of fewer purchasing options more evident than in the arena of workers' comp prescription benefit management. At the Risk and Insurance Management Society (RIMS) conference several years ago, literally dozens of cookie-cutter workers' comp PBM options were on display, all seemingly leasing the same Restat pharmacy network.
This year's conference during the first week of May in Vancouver should provide significantly fewer, but dramatically better, PBM options from which employers and payers can select.
Once again, as the remaining PBMs seek to differentiate themselves, a few basic questions about the goals and nature of your PBM program can help narrow the field of potential partners dramatically, such as:
-- Which is more important to you, the average price per prescription or the number of prescriptions per claim?
-- Is it more important to capture a higher percentage of first fills or limit the number of claims continuing to receive prescriptions after the first 12 or 24 months?
-- Do you want to partner with or fight against third-party billers to capture more first fills?
-- How comprehensive and aggressive should DUR interventions with prescribing physicians be?
-- How tightly do you want your PBM program to integrate with bill review or case management operations?
GAINING HAPPINESS
In "The Paradox of Choice," Schwartz recommends the following basic process be used by purchasers to maximize their "happiness" or satisfaction with their buying decisions:
1. Identify your goal or goals.
2. Prioritize the importance of those goals.
3. Array your purchasing options.
4. Evaluate how likely each option will be able to meet your goals.
5. Select the best option.
6. Modify your goals.
In the rapidly shrinking world of workers' comp managed care, Steps 3 and 4 are becoming increasingly straightforward as fewer competitors become easier to differentiate and align with the goals identified in the first two steps.
Even though there may be fewer booths in the exhibit hall, this year's RIMS conference will provide a perfect opportunity for risk and claims managers to "taste the available chocolate" and decide whether different managed-care partners might better align with their goals.
DAVID HUTH is a senior partner in the Chicago-based Maddy Bowling Consulting Inc.
Read more at the WORKERSCOMP Forum homepage.
View the original article here
In his 2004 book, "The Paradox of Choice: Why More Is Less," Barry Schwartz makes a persuasive argument for the notion that having too many options from which to choose actually decreases buyers' satisfaction levels. To support this hypothesis, Schwartz highlighted a study by Columbia and Stanford University researchers that found that, when participants were presented with a smaller selection of chocolates, they were actually more satisfied with their taste than when presented with a wider array of choices.
Although it seems at first somewhat counterintuitive, based on our recent experiences reviewing a host of RFPs for several large workers' compensation claims payers, the theory definitely seems to apply directly to our market.
Thanks to an unprecedented number of mergers and acquisitions, buyers in the workers' compensation managed-care space are now getting an opportunity to test Schwartz's theories and decide for themselves whether the "chocolate" now tastes any sweeter with fewer options to choose from.
Over the last 18 to 24 months, there has been a significant and dramatic contraction of players in the workers' compensation managed-care marketplace. The bill-review market shrunk with StrataCare's purchase of CS Stars and Mitchell's acquisition of Ingenix's PowerTrak offerings. The case management arena narrowed with Genex's purchase of Intracorp. And then ExamWorks acquired every peer review/IME company known to mankind. So there is no denying the reduction in buying choices available to employers and claims management organizations.
Fewer options are definitely not necessarily a bad thing in this case. With fewer competitors, more opportunity exists for each remaining player to differentiate themselves from the rest of the field. As differences between each company's offering become more pronounced, it becomes easier for potential buyers to identify the solution that will best match their needs. It is much easier to see one positioning itself as a generalist, one-stop shop for all your managed care programs while another is focused on becoming the best-in-class option for case management.
For example, as little as five years ago, at least a half-dozen generalist, managed-care firms all vied for employer and claims payer business. It was extremely challenging to discern meaningful differences between the programs offered by national companies like Coventry, Genex, Intracorp, CorVel, MCMC and Bunch & Associates. A proposal written by one could just as easily been written by any of the others. As mentioned before, however, this market has contracted (with Genex acquiring Intracorp, CorVel trying to morph into a third-party administrator and Bunch being acquired by StrataCare's parent company) and it is suddenly much easier to differentiate between the remaining firms.
BETTER VIEW OF BILL-REVIEW OPTIONS
This same scenario is playing itself out across the entire workers' comp managed-care spectrum. In medical bill review, where there used to be nearly a dozen different bill-review software platforms to choose from, buyers today are realistically "limited" to four. While all four platforms offer solid functionality across all aspects of the bill-review process, it is increasingly easy to see how one is seeking to differentiate itself based on efficiency and bill throughput, while another is focused on automated workflow management and a third appears to be differentiating itself as the low-cost option willing to enable and integrate a wide variety of specialty networks and services.
For potential buyers, the decision comes down to answering a few simple, high-level questions such as:
-- Would you rather have a single PPO with big inpatient hospital discounts or the flexibility to assemble a direct-contracted "mosaic" of different (potentially stacked) networks in each jurisdiction?
-- Do you want the vendor to provide integrated specialty review programs, or do you want to assemble your own "best-in-class" collection?
-- Is it more important to maximize bill reductions or minimize operational expenses?
Then they can quickly gain clear guidance on which platforms and partners will provide the best potential fit to their program.
PBM CHOICE
Perhaps nowhere is the dramatic benefit of fewer purchasing options more evident than in the arena of workers' comp prescription benefit management. At the Risk and Insurance Management Society (RIMS) conference several years ago, literally dozens of cookie-cutter workers' comp PBM options were on display, all seemingly leasing the same Restat pharmacy network.
This year's conference during the first week of May in Vancouver should provide significantly fewer, but dramatically better, PBM options from which employers and payers can select.
Once again, as the remaining PBMs seek to differentiate themselves, a few basic questions about the goals and nature of your PBM program can help narrow the field of potential partners dramatically, such as:
-- Which is more important to you, the average price per prescription or the number of prescriptions per claim?
-- Is it more important to capture a higher percentage of first fills or limit the number of claims continuing to receive prescriptions after the first 12 or 24 months?
-- Do you want to partner with or fight against third-party billers to capture more first fills?
-- How comprehensive and aggressive should DUR interventions with prescribing physicians be?
-- How tightly do you want your PBM program to integrate with bill review or case management operations?
GAINING HAPPINESS
In "The Paradox of Choice," Schwartz recommends the following basic process be used by purchasers to maximize their "happiness" or satisfaction with their buying decisions:
1. Identify your goal or goals.
2. Prioritize the importance of those goals.
3. Array your purchasing options.
4. Evaluate how likely each option will be able to meet your goals.
5. Select the best option.
6. Modify your goals.
In the rapidly shrinking world of workers' comp managed care, Steps 3 and 4 are becoming increasingly straightforward as fewer competitors become easier to differentiate and align with the goals identified in the first two steps.
Even though there may be fewer booths in the exhibit hall, this year's RIMS conference will provide a perfect opportunity for risk and claims managers to "taste the available chocolate" and decide whether different managed-care partners might better align with their goals.
DAVID HUTH is a senior partner in the Chicago-based Maddy Bowling Consulting Inc.
Read more at the WORKERSCOMP Forum homepage.
View the original article here
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