Insider's Perspective

What Lies Ahead for Healthcare Solutions

Healthcare Solutions CEO Joe Boures answers R&I's questions on client service, industry consolidation and the best Philly cheesesteaks.
By: | April 13, 2015 • 4 min read
Joe Boures2

Change is afoot for Healthcare Solutions, the parent company of Cypress Care, Procura Management, ScripNet and Modern Medical. The company’s acquisition by Catamaran closed on April 8. Catamaran, in turn, will be purchased by UnitedHealth, according to a late March announcement. Risk & Insurance® discussed the implications of the Catamaran acquisition with Joe Boures, CEO of Healthcare Solutions.


Healthcare Solutions made a major announcement recently, how do you expect this change to impact your clients?

The acquisition will have a positive long-term impact on our clients but our primary focus right now is making sure that we continue to service our customers with the same discipline and focus as we do today. Our client service model is staying the same so clients should not feel a disruption in service upon close of the acquisition.

Some acquisitions result in the need to re-implement a program as changes occur to the company’s technology platform. In our case, since Healthcare Solutions’ technology platform is already integrated with Catamaran, there is not a need to re-integrate with our customers as a result of the acquisition. This will allow us to stay focused on current initiatives to make our delivery of medical management services as impactful as possible.

How do you see this change playing out for the future of the company?

Without a doubt, the acquisition will have a positive impact on the future of the company.  It provides Healthcare Solutions a stable ownership structure in a rapidly consolidating marketplace, along with access to the resources of a $20 billion company.

Catamaran has a long history in the workers’ compensation space and this is an area of investment for the company. Customers will benefit from the combined organization.

Do you expect your role to remain the same?

Yes, I’ll move over as a senior leader of the workers’ compensation business, with similar functions as I have today.

The last few years saw a lot of consolidation in the workers’ comp industry.  Do you think we can expect to see more consolidation going forward and why?

Short answer, yes. The primary reason is that there are still a lot of private equity-owned companies with needed exit strategies.  There’s also competitive pressures that will ultimately lead to a consolidated marketplace.

You talk to a lot of customers.  What are the key challenges your customers tell you they are facing?

Customers continue to be challenged by medical cost inflation coupled with appropriate utilization controls. Healthcare Solutions’ customers are responsible for coordinating appropriate care for injured workers. They are concerned about injured worker safety and outcomes while also being mindful of spend.


If you just look at pharmacy as a microcosm of medical management, customers are concerned about the increase in compound drugs and physician dispensed drugs, as well as the potential over-prescribing of narcotic opioids. These issues alone are concerning to our customers from both a cost and safety point of view.

At the end of the day, customers are looking for how to do more with less. As businesses operate in leaner environments, they are looking for partners and technology solutions they can leverage to have the greatest impact on their programs.

You’ve been in this space for more than 20 years.  What is the most significant advancement you’ve seen?

Technology as an enabler to create seamless business processing, which allows many of our products to truly become programs within our customer base. Though we’ve come a long way, there are more efficiencies to be gained.  Both claimant-centric and process-centric technology solutions will continue to evolve and add value for customers.

How has your training as an accountant benefited you as a workers’ compensation executive?

The workers’ compensation industry has and will continue to focus on bottom line results. Having an accounting background allows me to deeply understand relationships around how to drive outcomes-based programs in ways others without that experience are at a disadvantage.

But while an accounting background allows one to understand the language of business, there’s so much more to being an effective workers’ compensation executive. Financial spreadsheets don’t allow you to hear the voice of the customer. I believe that you have to spend a lot of time meeting with and listening to customers.  Our business is a people business and top leaders need to have both financial discipline and as well as connectivity with their customers.


We know you’re from Philadelphia Joe, so tell us…where do you get the best cheesesteaks?

Without a doubt, Joe’s Steaks + Soda Shop on Torresdale Avenue. Although this isn’t really a fair question, given that my brother-in-law owns the restaurant.

You don’t have to rely on my opinion though, Joe’s Steaks + Soda Shop is consistently acknowledged as one of Philly’s best cheesesteaks by locals.

The R&I Editorial Team may be reached at [email protected]
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Nurse Case Management

Early Case Management Speeds RTW, Report Says

According to a recent study, early case management was found to be a critical element of a successful RTW outcome.
By: | March 16, 2015 • 2 min read
leg injury

Workers’ comp payers need to develop their own tipping points when seemingly routine claims escalate to high-cost levels. That’s among the strategies suggested in a new white paper.

Genex, a managed care firm, analyzed 46,000 claims over 12 months to identify characteristics that may signal a rapid escalation into excessive costs. While admitting there is no magic formula, the company says there are indications that a claim may be one of the estimated 5 percent that will turn into long-term, chronic cases that may cost millions of dollars. Among them are:

  • Poor initial physician diagnosis
  • Doctor hopping (e.g., three or more specialty physicians)
  • Lack of modified work duty options
  • Poor employee/employer relationships
  • Psycho-social factors, including poor family support
  • Preexisting conditions
  • Alcohol or drug dependence

“One of the most important steps employers and carriers can take is to analyze claims and to engage telephonic case management for even routine injuries when two or more red flags are identified,” said Pat Chavanu, senior vice president at Genex. “As an industry we have to move away from setting arbitrary dollar figures for when to bring in case management; we need to utilize it earlier when it can make a difference in terms of costs, outcomes and the well-being of the worker.”

According to the analysis, delaying case management for a year can decrease the likelihood of the injured worker returning to work by nearly 20 percent. Claims that use case management in the first nine months are two times more likely to have a successful RTW as those referred three years after the incident.

“This does not mean, however, using case management for all claims,” the paper said. “Benchmarks, data, organizational culture and goals must be defined and incorporated into employer tipping point criteria.”

The company advises payers to hold case management programs accountable. “Look at their costs, how quickly they return employees to work, and whether they help to reduce litigation,” the paper said. “Does the organization also tell you when case management is not necessary? Ask claimants about their experience. Is it positive, negative?”

Payers should develop criteria based on the organization’s RTW goals, the paper advised. Also, they should make sure injured workers have access to a network of savvy workers’ comp providers, and give adjusters tools and resources to identify red flag claim characteristics.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]
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Sponsored: Lexington Insurance

Pathogens, Allergens and Globalization – Oh My!

Allergens and global supply chain increases risk to food manufacturers. But new analytical approaches help quantify potential contamination exposure.
By: | June 1, 2015 • 6 min read

In 2014, a particular brand of cumin was used by dozens of food manufacturers to produce everything from spice mixes, hummus and bread crumbs to seasoned beef, poultry and pork products.

Yet, unbeknownst to these manufacturers, a potentially deadly contaminant was lurking…


What followed was the largest allergy-related recall since the U.S. Food Allergen Labeling and Consumer Protection Act became law in 2006. Retailers pulled 600,000 pounds of meat off the market, as well as hundreds of other products. As of May 2015, reports of peanut contaminated cumin were still being posted by FDA.

Food manufacturing executives have long known that a product contamination event is a looming risk to their business. While pathogens remain a threat, the dramatic increase in food allergen recalls coupled with distant, global supply chains creates an even more unpredictable and perilous exposure.

Recently peanut, an allergen in cumin, has joined the increasing list of unlikely contaminants, taking its place among a growing list that includes melamine, mineral oil, Sudan red and others.

Lex_BrandedContent“I have seen bacterial contaminations that are more damaging to a company’s finances than if a fire burnt down the entire plant.”

— Nicky Alexandru, global head of Crisis Management at AIG

“An event such as the cumin contamination has a domino effect in the supply chain,” said Nicky Alexandru, global head of Crisis Management at AIG, which was the first company to provide contaminated product coverage almost 30 years ago. “With an ingredient like the cumin being used in hundreds of products, the third party damages add up quickly and may bankrupt the supplier. This leaves manufacturers with no ability to recoup their losses.”

“The result is that a single contaminated ingredient may cause damage on a global scale,” added Robert Nevin, vice president at Lexington Insurance Company, an AIG company.

Quality and food safety professionals are able to drive product safety in their own manufacturing operations utilizing processes like kill steps and foreign material detection. But such measures are ineffective against an unexpected contaminant. “Food and beverage manufacturers are constantly challenged to anticipate and foresee unlikely sources of potential contamination leading to product recall,” said Alexandru. “They understandably have more control over their own manufacturing environment but can’t always predict a distant supply chain failure.”

And while companies of various sizes are impacted by a contamination, small to medium size manufacturers are at particular risk. With less of a capital cushion, many of these companies could be forced out of business.

Historically, manufacturing executives were hindered in their risk mitigation efforts by a perceived inability to quantify the exposure. After all, one can’t manage what one can’t measure. But AIG has developed a new approach to calculate the monetary exposure for the individual analysis of the three major elements of a product contamination event: product recall and replacement, restoring a safe manufacturing environment and loss of market. With this more precise cost calculation in hand, risk managers and brokers can pursue more successful risk mitigation and management strategies.

Product Recall and Replacement

Lex_BrandedContentWhether the contamination is a microorganism or an allergen, the immediate steps are always the same. The affected products are identified, recalled and destroyed. New product has to be manufactured and shipped to fill the void created by the recall.

The recall and replacement element can be estimated using company data or models, such as NOVI. Most companies can estimate the maximum amount of product available in the stream of commerce at any point in time. NOVI, a free online tool provided by AIG, estimates the recall exposures associated with a contamination event.

Restore a Safe Manufacturing Environment

Once the recall is underway, concurrent resources are focused on removing the contamination from the manufacturing process, and restarting production.

“Unfortunately, this phase often results in shell-shocked managers,” said Nevin. “Most contingency planning focuses on the costs associated with the recall but fail to adequately plan for cleanup and downtime.”

“The losses associated with this phase can be similar to a fire or other property loss that causes the operation to shut down. The consequential financial loss is the same whether the plant is shut down due to a fire or a pathogen contamination.” added Alexandru. “And then you have to factor in the clean-up costs.”

Lex_BrandedContentLocating the source of pathogen contamination can make disinfecting a plant after a contamination event more difficult. A single microorganism living in a pipe or in a crevice can create an ongoing contamination.

“I have seen microbial contaminations that are more damaging to a company’s finances than if a fire burnt down the entire plant,” observed Alexandru.

Handling an allergen contamination can be more straightforward because it may be restricted to a single batch. That is, unless there is ingredient used across multiple batches and products that contains an unknown allergen, like peanut residual in cumin.

Supply chain investigation and testing associated with identifying a cross-contaminated ingredient is complicated, costly and time consuming. Again, the supplier can be rendered bankrupt leaving them unable to provide financial reimbursement to client manufacturers.

Lex_BrandedContent“Until companies recognize the true magnitude of the financial risk and account for each of three components of a contamination, they can’t effectively protect their balance sheet. Businesses can end up buying too little or no coverage at all, and before they know it, their business is gone.”

— Robert Nevin, vice president at Lexington Insurance, an AIG company

Loss of Market


While the manufacturer is focused on recall and cleanup, the world of commerce continues without them. Customers shift to new suppliers or brands, often resulting in permanent damage to the manufacturer’s market share.

For manufacturers providing private label products to large retailers or grocers, the loss of a single client can be catastrophic.

“Often the customer will deem continuing the relationship as too risky and will switch to another supplier, or redistribute the business to existing suppliers” said Alexandru. “The manufacturer simply cannot find a replacement client; after all, there are a limited number of national retailers.”

On the consumer front, buyers may decide to switch brands based on the negative publicity or simply shift allegiance to another product. Given the competitiveness of the food business, it’s very difficult and costly to get consumers to come back.

“It’s a sad fact that by the time a manufacturer completes a recall, cleans up the plant and gets the product back on the shelf, some people may be hesitant to buy it.” said Nevin.

A complicating factor not always planned for by small and mid-sized companies, is publicity.

The recent incident surrounding a serious ice cream contamination forced both regulatory agencies and the manufacturer to be aggressive in remedial actions. The details of this incident and other contamination events were swiftly and highly publicized. This can be as damaging as the contamination itself and may exacerbate any or all of the three elements discussed above.

Estimating the Financial Risk May Save Your Company

“In our experience, most companies retain product contamination losses within their own balance sheet.” Nevin said. “But in reality, they rarely do a thorough evaluation of the financial risk and sometimes the company simply cannot absorb the financial consequences of a contamination. Potential for loss is much greater when factoring in all three components of a contamination event.”

This brief video provides a concise overview of the three elements of the product contamination event and the NOVI tool and benefits:


“Until companies recognize the true magnitude of the financial risk and account for each of three components of a contamination, they can’t effectively protect their balance sheet,” he said. “Businesses can end up buying too little or no coverage at all, and before they know it, their business is gone.”

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Lexington Insurance. The editorial staff of Risk & Insurance had no role in its preparation.

Lexington Insurance Company, an AIG Company, is the leading U.S.-based surplus lines insurer.
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