Latest / Becker’s Payer Issues Podcast / How Blue Shield of California Is Rethinking Care Delivery with Susan Mullaney

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How Blue Shield of California Is Rethinking Care Delivery with Susan Mullaney · Becker’s Payer Issues Podcast

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0:51
- Hello, everyone. This is Jacob Emerson with the
0:53
- Becker's Payer Issues podcast.
0:55
- Thrilled today to be joined by Susan Mullaney,
0:58
- who serves as chief operating officer at Blue
1:01
- Shield of California.
1:03
- Susan, thank you very much for taking the
1:04
- time to be with me on the podcast
1:06
- today.
1:07
- It's, it's great to be here with you,
1:09
- Jacob. Thanks.
1:10
- Likewise. And I'm glad you could take the
1:12
- time to be with us, Susan.
1:14
- And before we dive into everything we wanna
1:16
- talk with you about today, can you first
1:17
- tell us a little bit more about yourself,
1:20
- your background in health care, and a little
1:22
- bit more about your role today at Blue
1:24
- Shield of California?
1:27
- Sure. So
1:28
- I'll go way, way back. When I was
1:31
- growing up on the East Coast in the
1:32
- Boston area, I,
1:35
- had a mother who was always quite ill
1:37
- and in and out of hospitals.
1:39
- And I saw,
1:40
- the very best of health care. I saw
1:42
- the very worst of health care,
1:45
- and I knew at a young age that
1:47
- I wanted to be in health care to
1:48
- make it all that it, can and should
1:51
- be for
1:52
- 350,000,000
1:53
- Americans
1:54
- counting on us,
1:55
- to do just that. So,
1:58
- you know, I have a I have a
2:00
- hybrid background, Jacob. I spent the first half
2:03
- of my career in health care systems. So
2:06
- I've run hospitals. I've built new hospitals.
2:09
- I've,
2:11
- overseen and developed specialty care, primary care, you
2:14
- name it.
2:16
- And then I shifted after fifteen years of
2:19
- doing that, and I loved every minute of
2:20
- it to,
2:22
- the insurance
2:23
- side of things and really working predominantly
2:27
- in an integrated care and coverage
2:29
- system. And so I I really saw what,
2:32
- the the power
2:34
- of
2:35
- fully integrated care and coverage and what that
2:38
- would mean for,
2:40
- people's
2:41
- health and health outcomes.
2:44
- So that was that
2:46
- was foundational,
2:48
- for me.
2:50
- That that experience really shaped my perspective
2:53
- on
2:54
- where you could take health care. And then
2:57
- I was fortunate enough to join Blue Shield
2:59
- of California
3:00
- a couple years ago now,
3:03
- which is an amazing organization.
3:05
- And as the chief operating officer
3:08
- of the company, I'm responsible
3:11
- for bringing
3:12
- provider centric, member centric partnerships to life.
3:16
- I'm responsible
3:17
- for our pharmacy program. We can talk more
3:20
- about that.
3:22
- And I'm also responsible
3:24
- for our AI strategy, and it all moves
3:27
- together. So,
3:29
- so it's been we we have a lot
3:31
- on our,
3:33
- plate here, and we're all excited to move
3:36
- the agenda forward.
3:38
- Absolutely. Well, I appreciate the quick rundown there,
3:40
- Susan. And and you're right. There's been a
3:42
- lot,
3:43
- certainly from our end of things that we've
3:44
- heard about from Blue Shield
3:46
- over the years. And I know you've been
3:49
- there for nearly two years now, but like
3:51
- you mentioned, you you've had an impressive career
3:54
- before Blue Shield. You you've led both payer
3:57
- and provider organizations,
3:59
- a long career at Kaiser Permanente,
4:02
- and, of course, at Fairview before that. And
4:05
- so I
4:06
- wonder given
4:08
- the the the diversity of the organizations
4:09
- and and the sheer high quality
4:11
- of these organizations,
4:13
- in in your past and now in your
4:15
- present,
4:16
- how has that all shaped your approach to
4:19
- health care leadership today and and how you
4:21
- view some of the challenges
4:23
- currently facing the industry?
4:25
- Yeah. You know what it is, Jacob, is,
4:29
- you know, I have worked in just about
4:31
- every,
4:32
- part of the industry and for incredible organizations.
4:35
- And
4:36
- I can tell you this,
4:38
- everybody
4:39
- is working as hard as they can to
4:41
- take great care of patients and members.
4:45
- And
4:46
- what I see is the fundamental issue that
4:49
- we all have to come together on is
4:52
- the fact that if you take a couple
4:54
- steps back
4:55
- and look at the health of
4:58
- the American population,
5:00
- we have an explosion
5:02
- of chronic disease across the country. Think about
5:05
- the fact that in 1991,
5:09
- twenty one percent of Americans
5:12
- had three or four more chronic conditions.
5:16
- Fast forward to 2024,
5:18
- and it's forty seven percent.
5:21
- And,
5:21
- you know, and I don't know if you
5:23
- know the math on this or not, but
5:26
- it costs
5:28
- 21 times
5:29
- more
5:30
- to take care of a person with three
5:33
- or four or more chronic conditions than
5:36
- a healthy person who might have one or
5:39
- two chronic conditions or none. So
5:42
- so,
5:43
- you know, we're really in we're experiencing
5:47
- this chronic disease tsunami, which is really a
5:50
- cost tsunami.
5:52
- We're managing
5:54
- the crisis, but we're really not solving it
5:56
- in a traditional fee for service,
5:59
- system. So, you know, our our health care
6:01
- system, quote, unquote, was created in 1965.
6:05
- That was when Medicare and Medicaid was born.
6:07
- That was a very hospital centric model.
6:10
- That was a fee for service model, and
6:12
- it hasn't changed
6:13
- all that much or not nearly enough to
6:16
- keep up with,
6:18
- how do you support Americans
6:21
- in,
6:22
- managing their health and improving health outcomes. And
6:25
- so
6:26
- that that is significant. And I'll tell you
6:29
- what, the days of,
6:31
- it means that we all have to
6:34
- show up in very different ways together. What
6:37
- do I mean by that?
6:39
- The days of being a health insurance company
6:42
- alone,
6:43
- those days are over.
6:45
- The days of being a health care system
6:47
- alone and a fee for service model, those
6:50
- days are over.
6:51
- We have to come together
6:53
- as one
6:55
- to take care of the health
6:58
- of a population
6:59
- and to take care of the health of
7:02
- individuals and to drive health outcomes. And so,
7:06
- that is what we're building at Blue Shield
7:08
- of California.
7:10
- 100%.
7:11
- And and let's dive into the the cost
7:14
- trends.
7:15
- The the just the sheer high cost that
7:17
- the entire industry is facing right now, Susan.
7:19
- And and you mentioned part of that is
7:21
- this chronic disease tsunami,
7:24
- that is
7:25
- plaguing the country.
7:27
- And it's certainly not something that is expected
7:29
- to alleviate,
7:31
- anytime soon. And I'm I'm talking about the
7:33
- the the cost trend overall for for insurers,
7:36
- which, as you just mentioned, are are kind
7:38
- of becoming everything companies,
7:41
- to meet the demands of of this this
7:43
- era.
7:45
- We're we're seeing
7:47
- groups quotes or health plans quote
7:50
- AI,
7:52
- within coding tools on the provider side,
7:55
- consolidation
7:56
- on the provider side, the specialty drug spend,
7:59
- especially
8:00
- with GLP ones to to try to,
8:02
- address this chronic disease issue.
8:05
- Know some of the issues around the arbitration
8:08
- process with the no surprises act,
8:11
- all all driving the the cost trend higher.
8:13
- And so
8:14
- as we see the system become more complex,
8:17
- payers become,
8:18
- everything companies and more complex themselves,
8:21
- and then I just mentioned, some of the
8:23
- factors driving costs up.
8:26
- What needs to change? And I know that's
8:28
- a big question given everything I just laid
8:30
- out. But what what in your what in
8:32
- your mind is is top of mind to
8:34
- to try to,
8:35
- tackle some of these issues?
8:38
- Yeah. It's,
8:39
- you know, it it it's a big challenge,
8:42
- but there is,
8:43
- but the answer is simple. It's it's it's
8:46
- all about health plans and health care systems
8:48
- coming together as partners
8:51
- to take care of,
8:53
- of all of the people counting on them
8:54
- to to take great care of them. And
8:56
- and that is that's one of the agendas
8:59
- that I'm driving for Blue Shield to California.
9:02
- So what do I mean by that?
9:05
- We are working with health care systems throughout
9:08
- the state of California
9:10
- to step into holistically
9:13
- a very different model together where we have
9:15
- completely aligned
9:17
- financial incentives. We all win
9:20
- by making sure that the that the members
9:23
- and patients that we're caring for,
9:26
- are kept healthy and well, or if things
9:29
- go wrong that we're providing them with the
9:31
- very best care possible.
9:33
- And so we've we've structured it so that
9:36
- we've got aligned financial incentives.
9:39
- What's key though is,
9:42
- to really come together on evidence based clinical
9:46
- protocols to say, okay. That's that's how you
9:49
- health care system are going to take care
9:52
- of millions of people.
9:54
- We understand it. We support it. Now let's
9:58
- share our data so that we have one
10:00
- data set that we can understand
10:03
- and predict,
10:04
- where health is, how how one's health status
10:07
- is evolving and changing
10:09
- so that we can very proactively,
10:12
- take care of our members together.
10:15
- And so we're creating these partnerships.
10:18
- It takes a lot of work and it
10:21
- takes a lot of trust to do this
10:23
- together.
10:24
- And it's an exciting place to be because
10:26
- you can really then firmly get into the
10:29
- zone of
10:30
- you are
10:32
- driving
10:33
- health care outcomes. So personalized care at scale
10:36
- for millions of Californians,
10:39
- but tailored to each individual.
10:42
- And you can see what the data, technology,
10:45
- and AI capabilities
10:46
- that we have today,
10:48
- that actually gives you the platform that you
10:51
- can use to power
10:53
- a personalized care at scale model like you
10:56
- never have before.
10:58
- And done right and done well at scale,
11:01
- it eventually will
11:03
- get rid of the need to have prior
11:05
- auth. Because what you're doing is really tracking
11:09
- how well,
11:11
- we are all doing to take care of,
11:14
- chronic disease states,
11:16
- cancer care, heart care, you name it.
11:19
- And so that's that's what we're building with
11:22
- health care systems.
11:24
- And that that's the only way that you're
11:26
- really going to
11:28
- bend the cost curve in the country
11:32
- and show up in all the right ways
11:33
- for members and patients who are trusting you
11:36
- to do that, for them.
11:39
- Absolutely. And I know that Blue Shield has
11:42
- been one of the more,
11:43
- forward thinking organizations,
11:46
- around value based care, Susan, with your incentive
11:49
- programs.
11:50
- And I wonder
11:51
- what you would say to other health systems,
11:54
- other health plans listening in,
11:56
- on on finding those those opportunities to work
12:00
- differently together around improving care, around lowering costs.
12:04
- We we've heard from,
12:06
- leader health plan leaders,
12:08
- talking with us about some of the challenges
12:10
- right now with Medicare Advantage and and large
12:13
- health systems and some of the contracting issues
12:15
- and how that program specifically,
12:19
- is such a such a high promise of
12:22
- of what value based care can be and
12:24
- then some of the challenges of what we're
12:26
- seeing today.
12:27
- So what would your advice be to to
12:29
- the others leaders listening in on on how
12:32
- to move away from fee for service and
12:34
- and towards,
12:36
- some of the models that Blue Shield is
12:38
- clearly pioneering?
12:40
- Yeah. You know, it's,
12:42
- number one,
12:44
- work with health care systems
12:47
- that are like minded and that you have
12:49
- a strong partnership with, that that you together
12:52
- are you you both know that you're in
12:54
- it for the right things, which is to
12:56
- take great care
12:57
- of people, to take great care of the
13:00
- community,
13:01
- and start to have a really different conversation.
13:03
- I mean, this can't be about arguing over
13:06
- contracts and rates every two to three years.
13:08
- You know, put that aside and say,
13:11
- let's start here. You know, define an opportunity,
13:15
- and then really take the time to
13:18
- put all of your assets and capabilities
13:22
- together
13:23
- with the end outcome being, we want to
13:25
- design
13:27
- a seamless,
13:29
- frictionless
13:29
- experience for our members, your patients,
13:33
- and we wanna demonstrate
13:35
- that we're improving health outcomes at scale and
13:38
- at the individual level.
13:41
- So find ways to pull your data.
13:44
- Come together in a different structure where you're
13:47
- sitting side by side agreeing on evidence based
13:50
- clinical protocols,
13:52
- and that is something that you have to
13:53
- maintain at all times that you're also agreeing
13:56
- on what the right drugs are for the
13:58
- right conditions
14:00
- and and create a partnership
14:03
- that really focuses on that.
14:05
- And health care systems
14:08
- love that. I mean, that's what makes them
14:10
- thrive. They wanna take great care of people.
14:14
- And so as a health plan to create
14:16
- the kind of a climate and partnership,
14:20
- that gets you there,
14:22
- health care systems would love to work with
14:24
- you on that front.
14:26
- And I love to say too that, you
14:28
- know, relationships and partnerships, they move at the
14:30
- speed of trust. And so
14:33
- you really have to put the time into,
14:36
- align on the goals and to really listen
14:39
- to one another in terms of what the
14:41
- right solution sets will be, and then it's
14:43
- an ongoing partnership.
14:46
- So you you have to maintain that. But
14:48
- I encourage everybody to think about
14:52
- restructuring
14:53
- their provider partnerships
14:55
- to achieve that outcome.
14:57
- You don't flip a switch and step into,
15:00
- a completely different payment model and partnership model
15:04
- overnight, so it's a journey.
15:07
- And so you have to be patient and
15:09
- take the time with it.
15:11
- Certainly.
15:12
- It's great advice. And I wanna,
15:15
- keep on the topic of innovations
15:17
- we we've been hearing about from Blue Shield
15:19
- over the last few years, Susan, new models
15:22
- that the company has
15:23
- been, launching and seeing a lot of success
15:25
- around. We heard recently
15:27
- about,
15:28
- some of the latest metrics and adoption
15:30
- with your virtual first plan
15:33
- at the company,
15:34
- and then you mentioned
15:36
- a lot of the friction today around,
15:38
- insurers and and health systems being prior authorization.
15:42
- And so we we've heard from the company,
15:43
- from Blue Shield recently around your work with
15:46
- Google, with Salesforce
15:48
- on on making that process,
15:50
- more frictionless.
15:52
- So can you give us, some updates in
15:54
- this space in terms of how the company
15:57
- is using technology to reduce complexities,
16:01
- and like you said, create that better experience
16:03
- for the patients that you serve?
16:07
- Sure. Would love to. So so,
16:10
- we are far down the path of,
16:12
- having real time prior authorization
16:14
- capabilities, and you just referenced that, Jacob.
16:18
- We're also
16:19
- working
16:20
- to make sure that, eventually, you don't need
16:23
- prior authorization because you're coming together on the
16:26
- evidence based protocols that I just discussed. So,
16:30
- we are partnering with health care systems on
16:33
- oncology care and specifically on oncology
16:37
- drugs that's gonna drive 60%
16:40
- of the increase in pharmaceutical
16:42
- spending over the next five years.
16:45
- And we're enabling through technology,
16:47
- back to the technology piece,
16:50
- through our partnership with Gemini,
16:52
- Price Check MyRx,
16:54
- which is
16:55
- a way for our members and our providers
16:59
- to be guided in the moment at the
17:02
- point of care
17:03
- on what would be the best drug option,
17:07
- the best prescription medicine option for that patient
17:10
- and that specific condition,
17:12
- and what's the lowest cost option.
17:15
- And so we've had a lot of success
17:17
- with this over the past year and a
17:19
- half.
17:20
- We're saving members
17:22
- $33
17:24
- per script
17:25
- when this is used,
17:27
- and we're saving our, employer groups
17:30
- over $200
17:31
- per prescription
17:33
- because of the power of that model. So
17:35
- it's evidence based decision making in the moment
17:38
- in a provider's office, so to speak. And
17:40
- so
17:41
- that price check myRx and the Gemini technology
17:44
- behind it,
17:46
- has been very powerful.
17:49
- The the other thing that I'll mention, this
17:51
- could be a long list, but I'll keep
17:52
- it brief, is that, we created our own
17:55
- member health records that you as a Blue
17:57
- Shield of California
17:59
- member,
17:59
- we can pull all of your health information
18:02
- from
18:03
- electronic medical records throughout the state, throughout the
18:06
- country in one location so that you have
18:09
- a simple way
18:11
- to track all that you need to when
18:13
- it comes to your health and clinical
18:15
- care.
18:16
- So you're helping,
18:18
- disparate systems
18:20
- speak together better with this,
18:23
- one place virtual member health record, and you're
18:26
- prepping for even more expensive specialty medications
18:30
- coming down the pipeline. We've heard a lot
18:32
- of,
18:33
- pharmacy leaders within health plans really talk to
18:35
- us a lot about that recently, Susan, in
18:38
- terms of,
18:39
- trying to get everything ready for for that.
18:42
- And
18:43
- I think my my next big question for
18:46
- you is
18:47
- what else
18:49
- is your your your next big priority,
18:52
- when you're when you're thinking about the future
18:54
- of health care in this country? We talked
18:56
- about tackling chronic disease,
18:58
- getting rid of prior auth,
19:00
- expanding your value based incentive programs.
19:03
- What else is top of mind for you,
19:05
- and and what do you think maybe doesn't
19:06
- get enough attention?
19:08
- I would say that the other big priority
19:11
- and it all moves together is our,
19:15
- pharmacy care program.
19:17
- So
19:18
- we were far ahead of the industry in
19:20
- in,
19:22
- recognizing
19:23
- that the opaque PBM model where 85% of
19:26
- all drugs move through,
19:29
- three PBMs in the country,
19:31
- that that the opacity
19:33
- of that
19:35
- did not fulfill
19:37
- the goal of making sure that Americans
19:39
- have access to
19:42
- the highest quality prescription medicine at the lowest
19:45
- cost.
19:46
- And, you know, 50% of Americans use prescription
19:50
- drugs. This is
19:52
- it's central to Americans' lives. And so
19:55
- we created,
19:58
- we completely disrupted the PBM model, created our
20:01
- own modular program,
20:03
- launched it 01/01/2025,
20:06
- and we've had great results with that.
20:09
- It's a transparent
20:10
- model.
20:12
- It it drives providing
20:14
- our members with the lowest cost best prescriptions
20:18
- for them, and we're seeing terrific results from
20:21
- that. I mentioned a couple of them earlier
20:23
- with the Gemini Health,
20:26
- example,
20:26
- and we're able to demonstrate to,
20:29
- self funded employers that, here's the net cost.
20:33
- We are completely transparent
20:35
- with all pricing, all costs in that model,
20:39
- and we're very competitive
20:40
- with
20:41
- PBMs.
20:43
- We are now now that that model has
20:46
- launched,
20:47
- let's declare success in wave one.
20:50
- Now we're hard at work
20:53
- delivering
20:54
- a
20:55
- pharmaceutical
20:56
- care model
20:58
- that is woven together with medical care so
21:01
- that we can predict
21:04
- and,
21:05
- help support members with their pharmaceutical
21:08
- care,
21:10
- in all ways. And and it's interesting. It's,
21:13
- bifurcated in the industry right now. We're putting
21:16
- it all together. It's a pharmacist led clinical
21:19
- model,
21:21
- and we're bringing that to scale with AI
21:24
- technology and the provider partnerships that we're cultivating
21:27
- throughout the state. So think pharmaceutical
21:30
- care
21:32
- is my advice to health care leaders across
21:34
- the country would be pharmaceutical
21:37
- care needs to be central in your strategy
21:40
- to make sure that you are,
21:42
- connecting people
21:44
- with, with
21:46
- medication
21:47
- and making it far more affordable,
21:49
- especially with the
21:51
- incredible innovations that are happening in the biotechnology
21:55
- space.
21:56
- You have to
21:58
- embrace that and then
22:00
- figure out ways that you still keep access
22:03
- to those medications
22:04
- affordable for
22:05
- the average American. So
22:08
- that that would be,
22:09
- the last thing I'd mentioned today, and,
22:12
- and that for us has been a priority
22:14
- now for a long time.
22:16
- Absolutely. I'm I'm so glad you brought up
22:18
- the unbundled PBM program,
22:21
- Susan. It obviously made a big splash in
22:23
- the industry when you all announced it a
22:25
- few years back. So appreciate,
22:27
- you expanding a bit on on updates there,
22:31
- and a great last piece of advice to
22:33
- to leave our audience today on on focusing
22:35
- on pharmacy innovation
22:37
- moving forward.
22:38
- I can't thank you enough for taking the
22:40
- time to be with us here today and
22:42
- for sharing your insights,
22:44
- with our audience.
22:45
- And, yeah, just thank you for taking the
22:47
- time to do so. Really appreciate it.
22:50
- Thank you, Jacob.
22:51
- And to our audience, if you'd like to
22:53
- listen to more podcasts from Becker's Healthcare, you
22:56
- can visit beckershospitalreview.com.