Work comp services
the consolidation (probably) continues.
What’s coming is quite clear – there will be more consolidation in the work comp services industry, much of it likely in the next 12 months.
Workers’ comp is a shrinking industry; while there may well be occasional increases in premiums, claims counts, and spend, in general the long term trend is crystal clear – the only way to sure way to grow is to acquire other companies.
Back then, The big players in the service sector were Mitchell/Genex/Coventry (now Enlyte), Paradigm, Conduent, Optum Workers’ Comp, OneCall, ExamWorks and one step down, MedRisk (HSA consulting client).
Today, the 6 is now 4.
Enlyte and ExamWorks the largest by revenue
Paradigm growing after multiple acquisitions and new product launches
MedRisk is well placed in the top tier after acquiring Medata and Conduent Work Comp Services.
Meanwhile OneCall remains stagnant, handicapped by what appears to be a lack of consensus on the way forward and an inability to hold onto customers
and Optum Work Comp has gone thru multiple management changes, possible declining revenues and a lack of attention from its overseers. (which was bad enough before the huge problems of the last few months at parent UHG).
The investment community’s growing interest in work comp services makes it possible there will soon be more consolidation although I don’t see any of the Big Four merging with a fellow member.
What does this mean for you?
Consolidation - well done - will benefit owners and customers alike.
Poorly done, you get…OneCall.
Let’s hope organic growth in this sector doesn’t take a leap forward triggered by weakened OSHA, relaxed safety oversight and heightened worker risk taking by those at the margins (new hires, probationary employees, independent contractors).