Occupational Medicine Predictions: Facing Challenges

interventionalLast week, The Ambulatory M&A Advisor examined 2016 development predictions for the Occupational Medicine sector.  Although Occupational Medicine services can be often included under the umbrella of Urgent Care in discussions about the industry, it is important to note that Occupational Medicine specifically caters to the needs of companies seeking job-related healthcare services for employees.  That’s not limited to Worker’s Compensation for injuries at the workplace, but also encompasses  drug and alcohol testing, employment physicals, and more.

The first edition of Occupational Medicine predictions focused heavily on M&A and development within the space. This second piece touches on M&A, but focuses on how Occupational Medicine can overcome challenges the industry faces.

Anthony Sanzo, Chairman and CEO of Net Health says that as far as M&A, he  sees an expanded market for Occupational Medicine in the coming years.

“That expansion may be offset by consolidations or acquisitions.  However, I think probably the more important thread is the ongoing demand that we see in the sector for the uniqueand critical services that are delivered conveniently through Occupational Medicine centers,” Sanzo says.

“What we see is the trend toward assessing the health of employees holistically versus thinking of Occupational Medicine as simply Worker’s Compensation visits.  For employers, it’s part of an overall employee wellness campaign.  They’re looking for ways to provide not just work related injury care through Occupational Medicine programs, but also  primary care through on-site or near site clinics.  Today’s  market is driving  providers to look for ways to meet the needs of employers.” According to Sanzo, generally when you see industry growth, you do see an increase in the number of acquisitions because there is opportunity for larger organizations to grow  by acquiring smaller, independently run programs.

“We will see both a growth in the overall market and a continued trend toward consolidation through M&A,” Sanzo says.

Clayton Van Balen, MD, and occupational medicine physician with Sanford Health agrees that consolidation is a trend on the horizon.  Van Balen says occupational medicine is not only taking care of the injured individual, but it includes several other facets that consolidations will help provide.

According to Van Balen, combining urgent care and occupational medicine can also serve as a mode of generating more business for the industry because the hybrid model can lead to return patients when urgent care is needed outside of the workplace.

“By integrating service lines, you have the opportunity to provide more services,” Van Balen said. “If one line decreases, the other line picks up. It creates a more consistent year round business. If you want to have a diverse patient population with expanded service lines and continuous business, you integrate both,” Van Balen says.

As far as changes, challenges and opportunities go, J. Garth Stauffer, MD, Owner of Alabama Occupational Medicine says that he does not predict too many changes in 2016 in terms of challenges and opportunities for the field.

“We are going to keep treating workers compensation cases, and doing lots of physicals,” Stauffer says noting that there aren’t many changes to the field despite issues or opportunities that could arise.

However, Stauffer does predict a positive difference in operations when it comes coupled with the improvement of the economy. Stauffer says that with more people in work, they will be setting off potential chain reactions towards occupational medicine treatment.

Challenges and How to Stay Afloat

According to Sanzo, in 2016, he predicts that there is going to be a continued challenge of cost versus revenue generated.

“Every provider in Occupational Medicine needs to find ways to continue to improve the efficiency with which they deliver services.  This is exhibited in a number of different ways.  I see pressure from payors along with pressures from increased competition,” Sanzo says.  Sanzo goes on to explain that Occupational Medicine providers should be looking for various ways to streamline their practices to ensure that they are being paid appropriately for services delivered.  He says that astute providers are managing to expand their businesses in this increasingly competitive market place.

With the myriad of Urgent Cares, and Ambulatory Surgery Centers, both Sanzo and Stauffer give some advice on how Occupational Medicine can best position itself in a sea of competitors in 2016.

According to Stauffer, some tips for Occupational Medicine to stand out among the crowd of Urgent Cares and ASCs include showing dedication to the patients coming into Occupational Medicine offices and the employers who provide the contracts.

“Deliver the unique and sensitive service for the employer.  This includes good communication, knowing the companies that you work with, visit them so that what you deliver truly addresses the need of the employer,” Stauffer says.

“That is a little different than what you would get in an emergency room, or the urgent care centers.”

Sanzo says that Urgent Care has the ability to maintain a capacity and complementary visit flow.  What’s opportune about an Occupational Medicine practice is how well it fits within a clinic that’s already focused on Urgent Care.

“Urgent Care centers see the highest volume of clients in the early mornings, post-work and evening hours, and the weekend. That means there is unused capacity during the standard work week for scheduled Occupational Medicine visits.  Hence, why there is a big boost towards this so called “blended delivery” model where one can get Urgent Care or Occupational Medicine care at  the same site,”  Sanzo says.

“My advice is threefold; 1) Make sure that you understand the marketplace and your competition.  2) Make sure that you have the appropriate tools to provide the care and manage the financial and compliance business of Occupational Medicine.  You must capture all of the clinical documentation needed that supports appropriate coding, respond to all state-driven forms appropriately, and ensure your revenue cycle management practices are up to par so that you are receive the payments deserved. 3) Start looking for what may be a trend that we see in the future.  This is the greater use of telemedicine in the provision of Occupational Medicine.  Now we are talking about providers that can increase their volume of business by covering a larger geographic area and granting access to potentially under-served communities”

If you have an interest in learning more about the subject matter covered in this article, the M&A process or desire to discuss your current situation, please contact Blayne Rush, Investment Banker at 469-385-7792 or Blayne@AmbulatoryAlliances.com.


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