Dallas’ American CareSource sees stock jump 120% in 2008
By Jason Roberson
The Dallas Morning News
January 2, 2009
American CareSource is the nation’s first publicly traded ancillary care network company. The company basically serves as a middleman, connecting payors, such as insurers, with the providers of such services as lab work and diagnostic imaging.
Ancillary services now represent 30 percent of health care expenditures, valued at $574 billion annually, according to U.S. Center for Medicare and Medicaid Services.
While most insurers can handle the 70 percent of health care dollars that go to hospitals and physicians, the largest insurers form networks with ancillary services. That’s where American CareSource comes in.
American CareSource targets smaller insurers, unions and employers that aren’t able on their own to purchase ancillary services in bulk.
(American CareSource) bills itself as a cost-saver to both payors and ancillary providers. It acts as the providers’ advocate by collecting hard-to-get payments from insurance claims; it serves as the insurers’ advocate by offering lower costs than they could get on their own.
“In some ways, we want to be the Wal-Mart or Target of health care,” said David Boone, CEO of American CareSource.
He maintains a small-company management style. Whenever a new client is secured, an old ship’s bell is rung in celebration. When the company hit $1 million in profit, Boone, as promised, strutted in the middle of the office and proceeded to do a “money dance,” wearing a Donald Trump wig, a comical green jacket and hat of dollar bills.
http://www.dallasnews.com/sharedcontent/dws/bus/stories/010309dnbuscaresource.38426b8.html
As long as we insist that health care continue to be financed through our dysfunctional, fragmented multi-payer system, we will continue to see more innovative middlemen organizations capturing and siphoning away dollars that should be directed to health care instead.
Now we have a for-profit, publicly-traded entity that adds an additional, expensive administrative layer between the health plans and the providers of ancillary services. American CareSource provides no health care products or services – only more administrative waste.
I don’t know about you, but I’ve grown weary listening to those who say that single payer advocates have failed to demonstrate that a single payer system would bring us more than only nominal, one-time savings in administrative costs. Go to the PNHP website (www.pnhp.org) and type in “administrative waste” in the search window at the top of the opening page, but be prepared to spend a lot of time.
Massive, middlemen administrative waste permeates our entire health care system. It is not limited to the excesses of the private insurance industry, though that industry is a major contributor, both directly in its own costs, and indirectly by the burden placed on the health care delivery system. There are a great many other innovative administrative organizations involved, often subsidiaries of the insurers.
These same individuals who discredit the potential for recovering administrative waste also fail to mention the other benefits of single payer such as true universality, equity, efficiency, improved value in health care purchasing, and humane methods of cost containment.
But I have to hand it to David Boone, CEO of American CareSource. What could be more appropriate for this entrepreneurial middleman organization than celebrating success with a ship’s bell, a Donald Trump wig, and a hat stuffed with dollar bills? How fitting!
This should inspire the insurance industry’s AHIP. When Congress passes health care reform based on private health plans, AHIP can pass out the Donald Trump wigs with the hats stuffed with money. But the bell? Shipping in that bell from Philadelphia won’t do since it has a crack in it. That’s okay. Piping in the opening bell of the NYSE would much more befit the occasion anyway.