Few companies have as much reason to root for a better picture on jobs as Irvine-based healthcare software maker StrataCare Inc.
“We are driven by employment, so we’d love to see more employment turn up because that (gives us) more access,” Chief Executive Paul Glover said.
Access means taking on customers who count on StrataCare to make sure that bills for treating workers injured on the job are accurate.
The company provides what’s known as software as a service to free up customers from maintaining servers and other technology tasks that come with workers’ compensation.
StrataCare expects to have sales of more than $100 million this year, said Glover, who’s also chairman and chief executive of ISG Holdings, StrataCare’s Hartford, Conn.-based parent company.
The company’s software helps workers’ compensation insurers and large companies that take on insurance risks themselves manage medical bills of injured employees. It also connects them to doctors and hospitals and tracks and verifies treatments and billings.
“We would link into Anthem Blue Cross or other big networks,” Glover said.
Work for Disney
StrataCare also designs return-to-work programs for large, self-insured customers, including Burbank-based Walt Disney Co.—one of the largest employers in Orange County with about 20,000 workers at its Disneyland Resort in Anaheim.
StrataCare’s work for Disney includes a provider network it created and maintains to ensure that employees get appointments, appropriate services and a regimen on getting back to work at the proper time.
After a workers’ compensation health service is delivered, StrataCare verifies the treatment and the bills to see if “it’s good to go” and meets regulatory standards.
StrataCare then places bills in a data repository and reports information on workers’ compensation medical costs to regulatory agencies.
“We check off the boxes to make sure that everything is accurate as it relates to that bill,” Glover said.
The company uses a sales force and trade shows in order to get workers’ compensation insurer customers.
“It’s a very long sales cycle, and the implementation process takes a month, or even a year, to get this software deployed,” Glover said. “We have a set of national salespeople (but) they’re not out doing cold calls.”
Acquisitions have played a major role in StrataCare’s growth, including a deal last year for MedBillPro, which was owned by CS Stars LLC, a unit of New York-based insurance brokerage Marsh Inc.
The company intends to remain independent and privately held, according to Glover. It generates sufficient cash and has access to financing it needs to make deals without tapping Wall Street, he said.
“We’re not thinking of selling,” he said. “We are not, right now, evaluating an IPO because we don’t need to.”
The company makes about 1,000 changes a year to its software, including updates to fee schedules and workers’ compensation regulatory environments in various states.
The updates are driven by the different rules and regulations across states—with the challenge increasing as the company has expanded outside California.
StrataCare recently finished a five-year project that saw it establish pilot accounts outside California to make sure it had the proper software for other markets.
StrataCare is a peripheral competitor to CorVel Corp., a workers’ compensation management company based in Irvine, according to Glover.
“They do some of the same things we do but they really are a different market,” Glover said.
The company’s business model also bears some resemblance to Quality Systems Inc., an Irvine healthcare software company that helps doctors and dentists manage their practices.
“We’re working on the workers’ comp side as opposed to group health. We don’t do anything in group health,” Glover said.
Mitchell International Inc. of San Diego provides similar services to automobile insurers.
Local Operations
StrataCare has about 650 workers in total, with some 300 of those in Irvine.
About half of StrataCare’s Irvine workers are “software and product people,” such as engineers, Glover said.
Top StrataCare officials based here include Skip Creasey, chief operating officer, and Michael Josephs, chief information officer.
Other locations are in Amarillo, Texas, and Lakeland, Fla.
The company was started in 1998 and mainly operated in California until about eight years ago when it branched out into a wider, more national market.
“One of the big challenges was to enhance the technology so that the company could move national,” Glover said.
Future plans include adding more workers’ compensation insurance carriers as clients, as well as bringing in more self-insured companies as clients as the job market improves, he said.
