Latest / Becker’s Payer Issues Podcast / Affordability, Innovation, and Transforming Healthcare in North Carolina with Dr. Tunde Sotunde

Transcript

Affordability, Innovation, and Transforming Healthcare in North Carolina with Dr. Tunde Sotunde · Becker’s Payer Issues Podcast

0:00
Hello, everyone. This is Jacob Emerson with the
0:02
Becker's Pay Your Issues podcast. Thrilled today to
0:05
be joined by a very special guest, doctor
0:07
Tunde Satunde.
0:09
He joins me here from North Carolina, and
0:11
I'm very grateful to get the opportunity to
0:13
sit down with him today and give him
0:16
your insights to our wonderful audience.
0:18
So I'll let him take it away, introduce
0:20
himself a little bit more, and talk a
0:22
little bit more about himself and what he
0:24
does today at Blue Cross and Blue Shield
0:26
of North Carolina. So doctor Sutunde, thank you
0:28
very much for taking the time to be
0:29
with me here this morning on the podcast.
0:32
Great. Jacob, thanks for having me. Again, I'm
0:35
Tunde Sutunde,
0:36
president and CEO of, Curacost Solutions
0:40
and Blue Cross Blue Shield of, North Carolina.
0:44
Curacao Solutions is a not for profit holding
0:46
company
0:47
that includes Blue Cross and Blue Shield of
0:49
North Carolina
0:51
along with a portfolio of health services,
0:54
companies, including
0:56
care delivery assets.
0:58
I'm a physician, pediatrician by training,
1:00
though I've spent the past twenty five or
1:03
so years
1:04
in health care services,
1:07
administration.
1:09
Prior to joining Blue Cross of North Carolina,
1:11
I served as president of Medicaid
1:13
and state government related businesses
1:16
for Elephants Health
1:18
across 23
1:19
states, including the District Of Columbia.
1:22
I had the privilege of taking over the
1:24
helm
1:25
of Blue Cross back on 06/01/2020,
1:29
which you might recall
1:31
was at the height of the first wave
1:33
of the pandemic.
1:34
Since that time, we successfully navigated through the
1:37
pandemic,
1:39
And, also, we, rapidly advanced our signature
1:43
Blue Premier value based care
1:45
platform
1:47
that has
1:48
generated close to $1,000,000,000
1:51
in medical cost savings since inception.
1:54
And then more recently, we stood up, Curacao
1:57
Solutions,
1:58
not for profit parent holding company,
2:01
to better align
2:03
our
2:04
capital,
2:05
innovation,
2:06
and also our portfolio
2:08
of companies
2:09
around driving towards making
2:12
health care more affordable,
2:13
driving towards better care, better access,
2:16
better outcomes, and a better overall consumer experience.
2:20
Absolutely. And I actually that's where I wanna
2:23
start today, Tunde.
2:25
Better health outcomes, better access, better affordability.
2:29
You just said yourself, it's why you all
2:31
reorganized and you launched CoreCore Solutions.
2:34
And, you know, we we bring on leaders
2:35
like yourself from across the health care landscape
2:38
within the health insurance industry,
2:40
and within the Blue Cross system as well
2:42
here on the podcast
2:43
regularly. And you would be hard pressed to
2:45
find one nowadays,
2:47
when asked about the top issue they're looking
2:50
to tackle, and it is affordability,
2:52
for for their members.
2:54
Because as you know, health care costs are
2:56
rising everywhere. There is, of course, a variety
2:59
of reasons for for why that is, and
3:01
it's different across different companies, different markets. But
3:04
I wonder from from where you your perspective
3:06
and where you sit in North Carolina,
3:09
what are some of the biggest drivers right
3:10
now of why health care costs are rising
3:13
the way they are? And and how do
3:15
you frame that in a way where you're
3:17
not just pointing fingers at another part of
3:19
the system?
3:21
Yeah. It's a great question,
3:22
Jacob.
3:23
So
3:24
first of all, let me start off by
3:25
saying this, that regardless of where you sit
3:28
across the health care ecosystem, whether you're a
3:30
payer,
3:31
whether you're a provider,
3:33
whether you're a policymaker,
3:36
big pharma,
3:37
or even a patient.
3:39
We're all in this together.
3:41
And
3:42
the fact of the matter
3:45
is that there is no one party or
3:47
individual
3:49
to blame for health care affordability crisis.
3:53
There is no one
3:55
individual,
3:57
group of individuals or party
3:59
that can
4:00
solve this alone. It's gonna take all of
4:03
us coming together
4:05
in what I describe as a coalition of
4:07
the willing.
4:08
Right? To fix the structural
4:11
flaws that exist
4:13
across our health care ecosystem.
4:16
The fact of the matter is that the
4:17
gap
4:19
between
4:20
what
4:21
health care costs
4:23
and what consumers
4:25
can afford
4:26
to pay
4:27
is only
4:29
widening
4:30
at
4:31
an increasingly
4:33
exponential
4:35
or frankly speaking, an alarming rate.
4:38
And there's several factors in play.
4:41
One is lack of transparency.
4:44
What other
4:46
services
4:47
or goods
4:48
do you purchase
4:50
where you do not know
4:51
the price or the cost of the goods
4:53
or services until after the fact. It's only
4:56
healthcare.
4:57
So, that's one.
4:59
Secondly,
5:00
is misalignment of incentives.
5:04
Our
5:04
reimbursement
5:05
system
5:06
in healthcare is predominantly fee for service.
5:10
As I often
5:11
say, if you pay for volume,
5:13
you're more likely to get more volume. However,
5:16
if you pay for value and outcomes,
5:18
then you probably stand a better chance of
5:20
getting better value and outcomes
5:22
for your healthcare dollar.
5:25
And then
5:26
the fact of the matter is that our
5:28
system
5:29
is complex,
5:31
is fragmented,
5:33
and is inefficient.
5:36
The fact that we're still using fax machines,
5:39
I said it. You heard me right. Fax
5:41
machines
5:42
as one of the primary mechanisms of communicating
5:46
with ourselves across the health care ecosystem should
5:49
tell all of us something.
5:50
And then, of course, you have the health
5:52
status of the population. You have,
5:55
the aging demographics,
5:57
issues with access to
5:58
care, social drivers of health. And then, unfortunately,
6:03
oftentimes,
6:04
regulatory or legislative mandates that inadvertently
6:07
type of costs
6:09
due to the complexity or
6:11
requirements that are not add adequately funded for.
6:15
So these are all factors or general themes
6:17
that are in play across
6:20
the country as a whole.
6:22
Say that
6:25
North Carolina,
6:27
unfortunately,
6:29
is ground zero
6:31
for a lot of these things.
6:32
It turns out that we're one of the
6:34
most expensive,
6:36
states in the country
6:38
for health care.
6:40
From my perspective, there are a couple of
6:43
things that has or dynamics that are unique
6:46
here in North Carolina.
6:48
One is
6:49
we have one of the most fastest growing
6:52
populations of individuals over the 65.
6:57
I believe
6:58
that
6:59
according to the Department of Aging,
7:03
if I recall correctly, that by 2031,
7:07
there'll be more people 64
7:11
than below the age of 18 years of
7:14
age.
7:16
As you know, as we all get older,
7:19
we have more complex health care needs,
7:22
and
7:23
it's more expensive
7:24
to treat, you know, complex chronic conditions. That's
7:28
just the nature of life.
7:29
Secondly,
7:31
is our rural footprint.
7:33
We have the second largest
7:35
rural footprint per capita. I think that's the
7:38
right metric.
7:39
Second only to the state of Texas.
7:42
78 of our 100 counties are rural counties.
7:45
92 of our 100 counties are designated health
7:48
professional shortage areas
7:51
where there is a lack of access
7:54
to to basic primary mental health care services.
7:57
A lot of our safety net hospitals, rural
7:59
health hospitals
8:01
have gone under.
8:02
Right?
8:03
So those are just
8:06
increasingly
8:07
challenges
8:09
to the system. And then, last but not
8:11
the least, you have the health status of
8:13
the population.
8:14
High prevalence of diabetes,
8:16
obesity.
8:17
Right? And and even cancer,
8:20
in North Carolina compared to the national averages.
8:22
So just, again, general themes across the country,
8:26
but
8:28
somewhat unique or exacerbated
8:30
here in North Carolina.
8:32
Absolutely. Absolutely. So the the complexities you're facing,
8:35
it's not just,
8:37
what
8:38
a lot of the other insurers across the
8:39
country are facing. The the issue of transparency,
8:42
a sick population, the regulatory
8:45
the regulatory issues to navigate for you all,
8:47
but you have a very unique state.
8:50
Large urban areas, but large rural areas as
8:53
well, very quickly growing population, especially among seniors,
8:57
and very expensive health care overall when you
8:59
compare it to other states. And so
9:01
I think the the natural question there, Tunde,
9:04
then is in this very complex environment for
9:06
you both locally and then, of course, in
9:08
the context nationally,
9:11
How do you how do you bend this
9:12
cost curve as a not for profit company?
9:15
You're you're facing some very unique challenges. Clearly,
9:17
you've laid them out for us, but you're
9:19
a different kind of insurer when you also
9:21
look out across the landscape as well. So
9:23
so how do you how does that
9:25
how does that blend?
9:27
Yeah. Yeah.
9:29
So to this day, we're still the only
9:31
North Carolina
9:33
domicile,
9:34
mission purpose driven, fully taxed,
9:37
not for profit health insurer that is statewide
9:42
in all lines of business
9:44
and across all 100 counties here in the
9:46
state.
9:47
Why is that important? Well, first of all,
9:50
over the past nineteen or so years of
9:53
our existence,
9:54
we have built a strong reservoir of trust.
9:58
We are the trusted brand
10:01
here in the state of North Carolina.
10:03
While others have come and gone over the
10:05
years,
10:07
we have always stood by the side of
10:09
North Carolinas.
10:11
In fact, last year in 2025,
10:16
our customer satisfaction,
10:18
our,
10:19
brand strength, reputation scores,
10:22
Our Net Promoter Scores or NPS scores were
10:25
the highest that we have ever reported
10:28
going back in recent memory.
10:30
So that's one.
10:32
Two
10:33
is we're local.
10:35
We live and we work in the same
10:37
communities
10:39
as our provider partners,
10:42
as our local and states,
10:46
legislators,
10:47
regulators,
10:47
policy makers, and so on,
10:50
community organizations,
10:51
employer groups, and even our patients,
10:54
our members.
10:55
They are
10:57
our neighbors,
10:59
or as I often say, oftentimes
11:02
a phone call away.
11:04
That allows us the ability
11:07
to develop and forge very strong relationships,
11:11
stakeholder relationships,
11:13
right,
11:13
that allows us to collaborate
11:16
across a broad array of stakeholders
11:19
to address some of this
11:21
system issues
11:23
that exist
11:24
across our state.
11:26
And then, last but not the least,
11:29
we are
11:31
a not for profit.
11:33
Our shareholders,
11:34
our stakeholders
11:36
are the people and communities we serve.
11:38
It's not Wall Street. It is not retail
11:42
or institutional
11:43
investors.
11:44
It's the people and communities that we are
11:46
privileged to serve here in North Carolina.
11:49
Yeah. Right?
11:51
Our pretax earnings expectations as a not for
11:54
profit
11:55
is four to 5%
11:57
in a good year. Right? Just enough
12:00
to pay our bills,
12:02
keep the lights on,
12:04
make investments in asset solutions and capabilities to
12:07
do what?
12:08
To drive towards making health care more affordable,
12:10
better care, better access, better outcomes, better consumer
12:13
experience. And then what do we do with
12:15
what's left over?
12:16
We give it back
12:18
to the people in communities that we're able
12:20
to serve. So those are unique
12:24
advantages,
12:25
I would
12:26
say,
12:27
is
12:28
a competitive advantage
12:31
that nobody else has. Nobody else can say
12:34
what I just said or do or or
12:37
or does what we do. Why? Because all
12:40
our competitors
12:42
are all original
12:45
publicly traded or privately held
12:49
multistate
12:50
insurance. Yep. Yeah. Absolutely.
12:53
I I know. And, you know, I will
12:54
say,
12:56
I I've had the privilege of being able
12:57
to
12:58
speak with your leaders at Blue Cross of
13:00
North Carolina for,
13:02
several years now. And I will say it's
13:04
interesting to hear you talk about the commitment
13:07
to being in business across the entire state,
13:10
across all 100 counties
13:12
of North Carolina consistently like other insurers do
13:15
not.
13:16
That is a theme that we've heard from
13:18
your other leaders before in the past, Tunde,
13:20
even going back years. And so it's very
13:22
clear that this is a a company wide,
13:25
mission and and commitment, and it's it's great
13:27
to hear you, of course, espouse that as
13:29
well.
13:30
You you mentioned earlier on in terms of,
13:33
some of the challenges that you you all
13:35
face in terms of a,
13:38
providing
13:39
coverage to a sick population
13:41
oftentimes. And, you know, we hear that from
13:44
large health systems as well from leaders,
13:46
talking about a lot of the challenges they
13:48
face. They're often responding,
13:50
to to the chronic disease issues that that
13:53
that the population faces. And I know you've
13:55
publicly talked about,
13:57
making the case that affordability is ultimately one
14:01
upstream, that you have to make investments in
14:03
access,
14:04
investments in prevention,
14:06
so that the things that we're talking about
14:08
today can be alleviated in the future. And
14:10
so
14:11
I wonder how how do you evaluate those
14:13
investments with the same rigor as
14:16
core business decisions, the ones that keep the
14:18
lights on, as you said.
14:20
How do you how do you weigh those
14:22
decisions?
14:24
Yeah. You know, the math is simple in
14:26
in my mind. To the extent,
14:28
you can prevent
14:30
conditions from happening.
14:32
You can slow down the progression of,
14:35
chronic health conditions
14:37
and or avoid complications altogether.
14:40
Not only is it cheaper
14:41
in the long run,
14:43
but you also,
14:44
as importantly, drive towards better health outcomes and
14:47
a better
14:49
overall quality of life.
14:52
A few years ago, we came to the
14:54
realization
14:55
that
14:57
we needed
14:58
to
15:00
focus our efforts
15:02
around what I'll describe as a whole person
15:05
approach
15:07
to health.
15:08
Right?
15:09
Not just addressing
15:10
the physical and mental
15:13
health conditions,
15:14
but also addressing
15:17
the social drivers of health.
15:19
Access to proper food and nutrition.
15:22
Right?
15:23
Access to transportation,
15:26
which now you you mentioned access. Right? Okay.
15:31
To care.
15:33
Access
15:34
to
15:35
affordable,
15:37
I would even say workforce housing,
15:40
right, okay.
15:41
I've often said, if you have a
15:44
a a diabetic who's homeless,
15:47
How far do you think they're gonna get
15:49
in controlling
15:50
their diabetes or getting them to control or
15:52
manage their diabetes effectively
15:55
if they don't have adequate shelter? That's what's
15:57
gonna be top of mind. Right?
16:00
So
16:02
we made the decision to realign
16:05
our corporate social responsibility
16:08
effort,
16:08
including
16:09
our foundation. We have a separate five zero
16:11
one(three)
16:13
foundation
16:14
efforts
16:16
in such a manner where the investments that
16:18
we're making
16:21
in our communities
16:23
with our nonprofit
16:24
partners and so on
16:26
is aligned
16:28
with our business priorities.
16:31
Through that
16:32
effort,
16:33
we identified
16:35
three areas of focus
16:38
for the enterprise
16:39
as a whole.
16:41
Right?
16:42
One,
16:43
youth mental health.
16:44
I think it's fair to say
16:47
people don't know this. We're in a pandemic
16:49
when it comes to the mental health of
16:50
our youth. Right?
16:52
That's one.
16:53
The second was
16:55
health through food. Food is medicine.
16:59
And then the third
17:01
is access to care.
17:03
Again, going back to some of the challenges
17:04
that we we we referenced earlier on, particularly
17:07
in the rural parts and underserved parts of
17:10
our state.
17:11
We
17:12
have now marshaled
17:14
the entire
17:15
might of our organization,
17:17
our enterprise, our family of companies
17:20
around these three signature initiatives.
17:23
So, for example,
17:25
through our work
17:27
through
17:28
health, through food,
17:30
we launched
17:32
a program last year
17:34
called Feed Your Health.
17:37
It is a core medical benefit,
17:41
a medical benefit
17:42
that we are providing
17:46
to individuals,
17:48
our members
17:50
with poorly
17:53
Lee controlled
17:54
or uncontrolled
17:56
type two diabetes,
17:59
where they have access
18:01
to medically tailored meals
18:04
and also
18:06
nutritional
18:07
counseling
18:09
and wellness and a wellness coach
18:11
for a period of time. This is a
18:13
core benefit
18:15
for those individuals.
18:16
Why?
18:17
Because
18:19
chronic conditions, as you referenced earlier on, one
18:22
of the leading drivers of healthcare costs.
18:25
Diabetes
18:26
is up there in terms of prevalence.
18:29
Almost a million,
18:31
North Carolinians
18:32
are living with type two diabetes. That's just
18:34
shy of ten percent of our population, give
18:36
or take. Right?
18:38
It's costing the state, all of us,
18:42
billions of dollars
18:44
a year.
18:45
Through those efforts or through that program
18:48
already, we just,
18:50
published the first year results last week, actually.
18:55
We are already seeing
18:57
tighter or better management
18:59
of diabetes for those enrolled in the program,
19:02
participating in the program,
19:04
a reduction in overall total cost of care,
19:08
improvement in health outcomes.
19:11
Also,
19:12
the participants
19:13
are reporting a better overall satisfaction
19:16
with their health and well-being,
19:20
better quality of life, productivity,
19:23
and other activities of,
19:25
daily living.
19:27
The unique approach
19:29
that we're taking to philanthropy is not philanthropy
19:31
in the traditional sense.
19:34
What is really around advancing our business priorities,
19:37
and we believe, and we're already seeing it
19:39
in the numbers,
19:41
that it's a very powerful lever in driving
19:43
growth, retention,
19:44
reducing the overall total cost of care. And,
19:47
also,
19:50
it's turning out to be,
19:52
a tool that's driving
19:55
employee engagement
19:57
because people are more passionate. Our boys are
19:59
more passionate
20:01
about what we do and seeing the impact
20:04
of what we do each and every day.
20:08
Absolutely. And it's fascinating to hear you talk
20:10
about
20:11
expanding youth mental health access, food as medicine
20:14
programs,
20:15
rural care access,
20:18
initiatives.
20:19
It seems like these things are all such
20:20
a major focus around the country,
20:23
for insurers now. They're trying to go over
20:25
after those things that,
20:27
that 80% that that affects your health outcomes
20:29
outside the walls of of the care provider.
20:32
And, you know, I know you you were
20:34
talking earlier a little bit about,
20:36
North Carolina's rural makeup being a significant driver
20:39
of the health care costs that you're all
20:41
experiencing.
20:41
I think that's,
20:43
something that everyone forgets about about your state
20:45
sometimes is how rural it can be. Everyone's
20:48
moving to North Carolina. We all know it's
20:50
booming there, but people I think sometimes forget
20:52
about the rural makeup of the state. And
20:54
so I wonder where where do you see
20:56
the greatest opportunities for collaboration to deliver
21:00
better solutions,
21:01
for individuals living in rural areas? And then,
21:04
of course, to build the infrastructure
21:06
that's necessary to sustain
21:08
a health care system in these areas that,
21:10
you know, is disappearing in a lot of
21:12
places.
21:13
Yeah.
21:15
So the good news
21:16
is that the state of North Carolina was
21:19
recently awarded,
21:20
I think it was about a little bit
21:21
over 200,000,000. Maybe about 213,000,000,
21:24
if I have my numbers right in my
21:25
head,
21:26
by CMS
21:28
as part of the,
21:29
rural health transformation,
21:32
initiative.
21:33
So that not that all not only
21:36
provides us with
21:38
seed funding
21:42
to build out or strengthen our rural health
21:44
infrastructure,
21:46
but it also provides us
21:49
with
21:50
a golden opportunity
21:52
to do so
21:53
in a coordinated manner,
21:56
bringing together public private sector partnerships,
21:59
again, a coalition of the willing
22:04
of diverse stakeholders,
22:07
payers,
22:08
providers,
22:10
policymakers,
22:12
nonprofits,
22:14
and other interested parties
22:17
to build
22:19
a sustainable
22:21
live for generations
22:23
to come.
22:25
Addressing
22:26
everything
22:28
from health care workforce
22:29
shortages.
22:31
Right?
22:33
And when I say health care workforce, I'm
22:35
not just talking about doctors and nurses,
22:38
allied health personnel,
22:40
social workers,
22:42
mental health workers,
22:45
community health workers, and so on. The essential
22:47
fabric,
22:49
right, to any rural health care program.
22:52
Two,
22:54
building out a robust
22:57
telehealth infrastructure
22:59
so that we can connect
23:02
the rural health ecosystem.
23:05
But not only that,
23:07
also connect that system
23:09
to tertiary care, which unfortunately,
23:12
a lot of tertiary care tends to be
23:14
mostly available or limited to the urban parks,
23:17
right, of any state of the country.
23:20
Right?
23:21
And then also,
23:23
in parallel,
23:25
addressing what you had referenced earlier on, which
23:27
is the social drivers of health. Right? Access
23:30
to proper food and nutrition. I mean, a
23:32
lot of rural areas, you might only find
23:34
one grocery store.
23:35
Right? Or thirty, forty, 50 miles, you know,
23:38
and so on. So access to proper food
23:40
and nutrition, transportation,
23:43
you know, affordable workforce housing,
23:46
even childcare.
23:48
You know? These these are issues that tend
23:50
to be more exacerbated
23:52
or manifestable more so in the rural parts
23:54
of our state. So
23:56
I'm extremely,
23:58
excited and I'm extremely bullish
24:02
about the opportunity that
24:04
we're now presented with
24:06
to build a sustainable
24:08
system for the future. And I and I
24:10
I would hope one that could be an
24:12
example
24:13
for other states to replicate,
24:15
across the country.
24:17
Yeah. Absolutely. And I I mean, you really
24:19
do put your money where your mouth is
24:21
because I know Blue Cross of North Carolina
24:23
was right there during the pandemic expanding telehealth
24:27
services to your members.
24:29
And you'll have to keep us posted on
24:31
how things go with the rural health transformation
24:33
program. It's it's of a lot of interest
24:35
to to leaders across the country. I I
24:37
could talk with you all day. Tunde, you
24:39
have a great way of humanizing what are
24:41
very complicated issues.
24:43
But before we go, I do wanna make
24:45
sure to give you the floor one last
24:47
time, share any final thoughts with our audience,
24:50
or any bits of advice you wanna share
24:53
leaders across the country
24:54
navigating
24:55
the similar issues that that we talked about
24:58
today.
24:59
Yeah. So, Jacob, let me, put it this
25:02
way, that I I truly believe that
25:06
in health care, we all have the same
25:08
ultimate goals and objectives,
25:11
which is to improve the health and well-being
25:13
of
25:15
our members,
25:17
our patients,
25:20
our customers,
25:22
the people and communities
25:24
that we're privileged to serve
25:26
across the country.
25:28
There's no question about that in my mind.
25:32
Having said that, though, we all have to
25:35
acknowledge
25:36
and and be real with ourselves
25:39
that
25:40
our system, as it currently exists today,
25:44
practically is broken.
25:46
It is too damn expensive.
25:49
It is so complex,
25:51
fragmented,
25:53
inefficient.
25:55
Access to just basic primary and mental health
25:58
care services
25:59
is a challenge across the nation,
26:03
and
26:04
the
26:06
consumer
26:07
or the member or the patient experience
26:11
is underwhelming,
26:12
to say the least.
26:14
And not any one of us is to
26:17
blame,
26:18
and not any one of us can fix
26:19
it. We all have to come together.
26:22
And if we're able to come together,
26:25
put the consumer,
26:27
the member, the patient at the center of
26:29
health care decision making,
26:32
we will not only be able
26:34
to drive towards building a better health care
26:38
ecosystem,
26:39
right, that will improve the health and well-being
26:42
of the people that we're privileged to serve,
26:44
but also
26:46
I truly believe that our respective
26:49
organizations,
26:50
institutions,
26:51
companies, and so on
26:52
will thrive
26:54
even more so and even exceed
26:58
our own expectations in that regard.
27:01
Wonderful. Doctor Satunde, I can't thank you enough
27:05
for both your candidness
27:06
and for your time and for sharing
27:09
your leadership insights with our audience. We we
27:12
truly appreciate you doing so. So thank you.
27:14
Great. Thanks for having me.
27:16
Absolutely. Anytime. And to our audience, if you'd
27:18
like to listen to more podcasts from Becker's
27:20
Healthcare, you can visit beckershospitalreview.com.