Paduda: Comments on Conduent
Friday, September 24, 2021 | 0
As we march through the list of big, bigger and likely gonna-be-biggest workers' comp services entities, we are now at the single service providers.
This won’t take much time. Conduent is the leader in market share in workers’ comp bill review applications, followed by Mitchell and Medata. The company claims 50% market share, which sounds about right, although the claimed “savings” of $16 billion is just nonsense (as it likely reflects reductions below billed charges, which we all know are not “savings”).
Back in the day, there were lots more bill review applications and providers: PowerTrak, CompIQ, Smartadviser, Corporate Systems and CS Stars (can’t remember their applications’ names).
Strataware is Conduent’s application. Stratacare — owner of Strataware — was acquired seven years ago when Xerox bought ISG Holdings (ISG had previously acquired Stratacare).
Back in late 2018, we did a survey of bill review in workers’ compensation (Conduent’s predecessor came out pretty well; Conduent, not so much). I also conducted BR surveys in 2009 and 2012.
There have been rumors aplenty about Conduent potentially selling its BR application. The company has suffered through staff departures, ditched the CompIQ platform and gone through too many senior staff of late. While still the largest player in the workers’ comp bill review application space, it is apparent that Conduent has yet to figure out how to right the ship and set it on a steady and improving course.
The problems extend beyond work comp bill review.
Overall, Conduent’s revenue declined rather precipitously, from $5.4 billion in 2018 to $4.2 billion in 2020. Work comp bill review is included in the “commercial health care solutions” category, which saw a smaller drop from $445 million to $431 million over that period.
The CEO’s discussion of Conduent’s pretty poor results is a classic example of corporate-speak:
Going forward, we will assess our diverse portfolio and apply a differentiated investment strategy to optimize, enhance and expand our solutions as necessary based on the needs of our clients. We are focused on positioning Conduent for long-term success and driving value for clients and shareholders.
I don’t see Conduent adding to its workers’ comp portfolio. If anything, Stratacare may be sold if/when Conduent’s board decides it has had enough of poor results and restructures the company/changes leadership.
What does this mean for you?
Strataware’s future will be driven by larger issues — and, hopefully, resolution of those issues — at Conduent.
If/when Stratacare is sold off, expect the other big players in workers’ comp services to be the likely buyers.
Joseph Paduda is co-owner of CompPharma, a consulting firm focused on improving pharmacy programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.