Can Blue Cross of North Carolina Help to Reshape Its State’s Healthcare Landscape? | Mark Hagland | Healthcare Blogs Skip to content Skip to navigation

Can Blue Cross of North Carolina Help to Reshape Its State’s Healthcare Landscape?

July 31, 2018
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Remarks made by Patrick Conway, M.D. this spring point to some of the opportunities—and profound challenges—facing the shift towards a value-based healthcare system in North Carolina

One of the more fascinating discussions of this spring that I was able to report on took place at the HLTH Conference, held at the Aria Resort in Las Vegas in early May. On Monday, May 7, I was able to attend a session that included Patrick Conway, M.D., the president and CEO of the Durham-based Blue Cross and Blue Shield of North Carolina (BCNC), and who had previously served as the Chief Medical Officer, Deputy Administrator, and Director of the Center for Medicare and Medicaid Innovation (CMMI), a division of the Centers for Medicare and Medicaid Services (CMS). Dr. Conway was interviewed onstage by Annie Lamont, managing partner at Oak HC/FT, a Greenwich, Conn.-based venture capital fund.

In addition to discussing his accomplishments at CMMI, Dr. Conway discussed at some length the payer-provider landscape in North Carolina right now. “Isn’t it true that five large multi-hospital systems dominate the state?” Lamont asked him. “Yes,” Conway responded, “five systems have the vast bulk of the market. And we’re looking at a new model, where” patient care organizations can partner more fully with Blue Cross North Carolina. “We’re saying, you can take this alternative pathway with us. And we’ll jointly be accountable for the total quality and cost of care. And we want you to go into two-sided risk. And we’re wondering, should we turn off all prior authorization? And documentation other than for risk coding and STARS measures, we won’t worry about how you document. And for people in the audience, those kinds of partnerships are very exciting, because you’ve now got a provider and payer that are no longer locked into rigid rules, but where you can innovate on quality and customer experience,” he added.

Meanwhile, Lamont asked, “How might the Blue Cross and Blue Shield Association be able to help facilitate healthcare system change among all the Blues plans, and beyond?” “I think the Blues system has a lot of potential, if we move past the traditional health insurance system,” Conway said. “The beauty is that we insure 100 million people—nearly as many as CMS. does And it’s mission-driven. And we have leaders like Mark Ganz [CEO of the Portland, Ore.-based Cambia Health, the parent company to four regional health plans] and Paul Markovich [president and CEO of the Sacramento-based Blue Shield of California], who really want to drive the system. The question is how you think about innovation, data and analytics, the customer experience, investments beyond the traditional ones, and think beyond being a traditional insurer.”

Later on in the interview, Lamont said, “You come in quickly and want change to happen fast in North Carolina. As you think about the things that can make the most change, I know you want to influence primary care. What are your thoughts about that” “I’d say a few things,” Conway said. “First, I’d reference our high-level goals as an organization: we talk about better care and outcomes, at lower cost, and with better service and experience. Buckets: working deep partnerships with providers, risk, etc. Second,” he said, “I’d talk about convenience: 24/7 access, telehealth-enabled, a real focus on higher quality and lower cost. And we’re like Medicare: we spend less than 10 percent of our costs on primary care, yet primary care physicians control most of the costs.”

“How do you do that—incent patients to show up in primary care?” Lamont asked. “First, there’s basic segmentation that has to take place in terms of Medicare, Medicaid, and commercial plan members,” in terms of thinking about how best to manage care and services for distinct populations, Conway said. And then, the providers who want to focus on discrete populations, are a factor as well, in planning, he said. “Some providers are involved in concierge-type care, which we’re looking at; other potential partners want to care for the sickest of the sick. There are different enablement capabilities,” and different levels of interest among different providers in terms of seeking to serve specific populations and sub-populations, he said.

“How do you define healthcare quality?” Lamont asked. “I was responsible for most of the measures from the federal government,” Conway said, “and always tried to move towards true outcomes measures rather than process measures, including patient-reported outcomes—process measures only if they have a real tie to outcomes measures. And then experience measures. I think healthcare, like other services, should have experience measures. And then I think about the total cost of care.”

Meanwhile, what about the proposed mergers and/or business alliances involving CVS and Aetna, Walmart and Humana, and Amazon/Berkshire Hathaway/JP Morgan Chase, that have emerged in the past few months? Lamont asked. “What’s your perspective?” “North Carolina is an interesting market, we’ve got every major health insurer,” Conway noted. “On the integration point, they all vary a bit. CVS-Aetna—can you actually integrate well and get the full value out of that relationship? But it’s got a PBM play and an integration play to it. Interesting. Walmart-Humana—is it actually real? But I view all of these things as overall positive; [the very creation of disruptive new alliances] forces change. In terms of the Amazon/Berkshire Hathaway/ JP Morgan Chase announcement, my biggest take with that is, they’re so upset with the current system that they want to disrupt it; and my reaction is, we should listen. Because they’re identifying a real problem.”

Rethinking market change in a health system-dominated state

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