Latest / Becker’s Healthcare Podcast / Tackling Healthcare Affordability and Chronic Disease at Blue Shield of California with Mike Stuart

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Tackling Healthcare Affordability and Chronic Disease at Blue Shield of California with Mike Stuart · Becker’s Healthcare Podcast

• 0:00
  Hello, everyone. This is Jacob Emerson with the
• 0:02
  Becker's Payer Issues podcast.
• 0:04
  Thrilled today to be joined by a special
• 0:06
  guest. Mike Stewart serves as the president and
• 0:09
  CEO of Blue Shield of California.
• 0:12
  Mike, thank you very much for taking the
• 0:13
  time to be with me on the podcast
• 0:15
  today.
• 0:16
  Of course. Thank you so much for having
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  me. I appreciate it. Absolutely. And before we
• 0:20
  dive in everything we wanna talk with you
• 0:21
  about today, Mike, can you first tell us
• 0:22
  a little bit more about yourself, your background
• 0:25
  in health care, and what it is that
• 0:27
  you do today at Blue Shield of California?
• 0:29
  Perfect. Yeah. Happy to. So, again, Mike Stewart,
• 0:32
  president and CEO of Blue Shield of California.
• 0:35
  Just a bit about Blue Shield.
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  We are a nonprofit mission based, health plan
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  headquartered here in California. We serve a little
• 0:42
  over 6,000,000 members,
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  in all lines of business. So commercial,
• 0:47
  individual and family plan,
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  Medicare, Medicaid,
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  as well as specialty products like vision, dental,
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  and life.
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  And we were formed in 1939,
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  and so we're coming, up on ninety years
• 1:01
  of operations here,
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  as a help plan.
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  A little bit about,
• 1:06
  me and my background.
• 1:08
  I've been in the CEO role here now
• 1:10
  for a little over a year. Part of
• 1:13
  that was an interim period of time until
• 1:15
  the board
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  appointed me in August.
• 1:18
  Prior to that, I was serving as the
• 1:20
  chief financial officer, for the health plan,
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  but have been here now for, twelve years
• 1:26
  and served in a number of finance roles
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  before I was the CFO,
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  which was terrific because allowed me to really
• 1:33
  learn, really end to end,
• 1:35
  how the organization and how a health plan
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  works.
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  But I didn't, start health care on the
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  health plan side. I actually came first, from
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  the provider side of it or the delivery
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  side of of the industry
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  and spent, coincidentally about twelve years at a
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  nonprofit health system here in California.
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  The more majority of those years serving as
• 1:53
  their chief financial officer.
• 1:55
  And prior to that and actually how I
• 1:57
  found health care was I was working for
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  Deloitte, and one of my clients ended up
• 2:00
  being in health care.
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  That client,
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  was that health system I ended up going
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  to work for for for close to twelve
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  years. So that's a little bit of a
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  background on Blue Shield and and me.
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  Fantastic.
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  So you've had a long career just at
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  Blue Shield alone, but you've also been on
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  the provider side. And you you're a CFO
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  before this, and so and I know you
• 2:20
  held a few other financial leadership positions before
• 2:22
  that at the company. Talk to us a
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  little bit about that perspective and how it
• 2:27
  shaped your decisions
• 2:28
  now over this past year or so at
• 2:30
  Blue Shield now leading the entire company.
• 2:33
  Sure.
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  I think maybe pulling first from the finance
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  background that I have, I have found and,
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  certainly, it's helped me in in my current
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  role, but even even in the finance roles.
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  I feel like you are you're
• 2:48
  in finance, you gain a real
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  appreciation
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  for how interconnected
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  things are,
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  And I I find that to be really
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  important in particular
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  when you're making decisions to understand that decisions
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  truly cannot be made in in isolation. So
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  if you think about it from a health
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  plan perspective,
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  making a decision that impacts a clinical area
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  without considering the impacts on operations or financials
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  or even from other stakeholder perspectives. So how
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  a decision or change may impact members or
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  employers or providers
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  is is really important. And I found that
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  in the finance roles that I have had,
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  and experiences is you get to see that
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  interconnectedness
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  quite well, and and that really helps in
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  terms of making making decisions.
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  The second, I would say,
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  is it coming out of the finance discipline?
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  In in finance, you you certainly get a
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  lot of training
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  to balance, I'll call, near term execution with
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  longer term stability
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  and sustainability.
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  So really trying to balance
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  balance the here and now with what needs
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  to be true longer term for the organization
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  and its stakeholders to be successful.
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  And then what has been effective for me
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  then is layering on this provider experience. So
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  understanding that interconnectedness within a health plan, balancing
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  near term and short term,
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  and then balancing understanding
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  both provider and health plan dynamics,
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  from a decision making perspective
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  really allows you to take a true systems
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  perspective.
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  And I think that's incredibly important right now
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  when you're trying to solve a tough problem
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  like affordability in health care.
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  That problem is not gonna get solved,
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  piece by piece. It's gonna be solved by
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  connecting all the puzzle pieces together, and that's
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  been really a systems perspective is pretty critical.
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  Absolutely. And I know you you've held a
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  leadership role at a health system in the
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  past, like you mentioned, when we first started
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  talking. What about that? I mean, that's not
• 4:40
  necessarily a typical
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  background of of somebody in your position.
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  So how does that influence
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  your your leadership perspective today?
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  In terms of having the provider background prior
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  to coming to the health plan? Correct. Yeah.
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  I find it to be incredibly helpful.
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  As I go out and talk with our
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  our network of provider partners,
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  I think having although it's a a bit
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  dated now, twelve years,
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  understanding
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  how difficult their jobs are, because I I
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  did that job for a long time and
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  the realities of the headwinds that that they're
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  facing,
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  how difficult it is to care for for
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  a community and and do it well, year
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  after year, It really gives me, I'd say,
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  a good appreciation
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  of of what a partner needs to be
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  successful and perhaps how a health plan,
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  can help them in doing so and what
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  our obligation is is to those provider partners
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  to deliver for them. So it gave me
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  a real grounding of,
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  again, from a systems perspective, to be successful
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  to ultimately improve health outcomes and make health
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  care affordable,
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  why things need to be done together as
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  opposed to an isolation.
• 5:45
  Yeah. Absolutely. That makes a lot of sense.
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  And, you know, coming back to your your
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  current role, you've you've now been in this
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  for just over a year.
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  What would you say has been your proudest
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  moment so far leading the company?
• 5:58
  Yeah. I'd say
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  probably start with this, which is at Blue
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  Shield, we have some just incredible people and
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  a great culture,
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  and and that's been true for a very
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  long time. You know, the question I asked
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  when I actually I interviewed twelve years ago,
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  and I still find it true to be
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  here. I I asked everybody what got you
• 6:16
  to Blue Shield and what keeps you Blue
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  Shield, and and everybody I interviewed with at
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  the time said the same thing, and it
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  was the mission.
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  So
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  what I'd say is,
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  one, I'm incredibly honored to be the steward
• 6:27
  of that mission and and that culture. And
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  and what I'm most proud of getting back
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  to your question
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  is based on the culture that's been built
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  and that that I have really got the
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  honor to preserve,
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  health care is really hard right now, and
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  to watch our people
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  lead and work through that in what's a
• 6:44
  very challenging time and keeping our our members
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  and your patients front and center all the
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  time. Just incredibly proud proud of that, but
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  more than anything, I'd say, I'm just humbled
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  to be able to be in that leadership
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  position to to be the next one to
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  steward that.
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  Yeah. Absolutely. And and and you're right. It
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  is a tough time right now.
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  We've seen the earning roots reports from insurers
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  all over the country. We all know what's
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  going on in Washington and, of course, in
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  your in your home state, the largest state,
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  a lot of different policies,
• 7:11
  happening and a lot of membership changes.
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  So
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  what are your priorities for maintaining the mission
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  for the for this year ahead, but also
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  even, you know, insurers operate on in the
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  long term in the in the years to
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  come? How are you setting up,
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  a sustainable
• 7:28
  Blue Shield?
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  Yeah.
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  I think just to get grounded on our
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  our mission, which is in ensuring
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  access to all to high quality health care
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  and affordable price.
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  We spent a fair amount of time
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  last year reflecting on what is what is
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  our role as a health plan,
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  in achieving that mission, not just for us,
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  but
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  nationally as well.
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  And where we landed, and this is where
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  I think in particular in my role and
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  going back to
• 7:58
  the people here at Blue Shield and and
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  our culture is is clarity of purpose and
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  being very clear about that. And so with
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  that mission in mind,
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  there are three things that we are focused
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  on
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  as health plan.
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  And think of this as a Venn diagram
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  that they all they all overlap.
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  First is,
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  we're here to improve health outcomes. Hard stop.
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  So
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  get our members healthy and keep them healthy.
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  That is the durable path to making health
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  care affordable.
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  The second is to be the plan that
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  members love,
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  and I recognize that's an incredibly high bar
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  in particular
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  in for a health plan, in particular,
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  in today's environment.
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  But we're being very deliberate about setting that
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  bar that high because we think that's what's
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  needed,
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  to achieve our mission.
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  If we're going to be improving health health
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  outcomes, we need our members to trust us,
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  to engage with us, and we need to
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  deliver for them the moments that matter most.
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  And then the third is we recognize we
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  can't do this alone. So the third thing
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  that we are focused on is being the
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  champion of patient and member centric provider partnerships.
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  We do not deliver care.
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  We rely upon tight coordination integration with our
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  network of high quality providers,
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  And that is how in working with them,
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  we're gonna achieve better health outcomes, become the
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  plan that members love, and ultimately achieve the
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  mission of making health care affordable. But you
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  need all three of those pieces and that
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  clarity of focus as an organization of these
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  are the things that are most important to
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  achieving that mission.
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  Sure. And you mentioned, you know, the environment
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  that you're operating and that we're all living
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  in. Health care costs continue to go up.
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  You you know it. It's something I'm sure
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  you're dealing with every single day in terms
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  of how to bring costs down or how
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  to even just maintain them as they are
• 9:44
  year to year.
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  Being that plan that members love, I imagine
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  that's a pretty tough
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  tough thing to bridge there. Costs going up,
• 9:53
  keep being the plan that members love.
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  So what is Blue Shield doing right now?
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  Your your top priorities for making sure that
• 10:00
  you're driving more affordable care for your membership
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  given everything that's going on right now.
• 10:07
  Yeah. Few things there.
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  Certainly, the things that you would you would
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  expect,
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  you know, most you know, almost any company
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  in any industry, but certainly in this environment
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  right now with health plans. You know, how
• 10:19
  do we we be more efficient? How do
• 10:21
  we innovate?
• 10:22
  It's certainly things around automation,
• 10:25
  eliminating frictions between,
• 10:27
  plans and providers.
• 10:29
  We've done a lot around,
• 10:31
  reform and changes to,
• 10:34
  I'll call it, the the pharmacy value chain
• 10:36
  or supply chain to bring down, cost and
• 10:40
  pass those savings along to our members. So
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  a lot of those things you you would
• 10:43
  expect, for plans to be doing, and we're
• 10:45
  certainly doing doing that and more.
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  Introducing new things like our virtual first,
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  product for our members, which they love. It's
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  deliver delivering higher quality at at lower cost,
• 10:56
  and it's more convenient.
• 10:58
  But we've also spent a lot of time,
• 11:00
  getting really focused on root cause here of
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  what is causing health care to be so
• 11:05
  unaffordable.
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  And, again, it it's an equation. It's you
• 11:09
  have your unit cost, which is how much
• 11:11
  does a service, a procedure, a drug cost,
• 11:14
  multiplied by utilization. So how much care, how
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  many how many services do do members or
• 11:19
  patients need? And that's your total cost.
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  And, certainly,
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  we and providers are working really hard on
• 11:25
  the the unit cost side of things, and
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  that's been pretty challenging
• 11:29
  recently with with the inflationary pressures that we're
• 11:32
  all we're all seeing.
• 11:33
  But if you really dig in and say,
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  well, you know, even if we do a
• 11:37
  remarkable job there,
• 11:39
  health care still will not be affordable. And
• 11:42
  when you look at utilization, what the data
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  tells you is is members of patients certainly
• 11:46
  do need a high level of care right
• 11:47
  now.
• 11:48
  And the driver there when you when you
• 11:50
  dig into it is is chronic disease and
• 11:52
  the prevalence of chronic disease.
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  If you look at that, you take chronic
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  disease including behavioral health, it's ninety percent,
• 11:59
  nine zero,
• 12:00
  of health care expenditures in this country.
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  And then you dig in more and say,
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  well, has that been constant for a while?
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  The answer is no. It it's the issue
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  is is increasing. It's growing.
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  We right now have roughly half of Americans
• 12:13
  are living with two or more chronic diseases.
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  That's up from about forty two percent in
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  2020
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  in just just a few years, and that's
• 12:22
  up from twenty seven percent in the year
• 12:25
  2000.
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  So you have a
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  population that is increasingly needing more care because
• 12:31
  of this chronic condition issue, needing a very
• 12:34
  high cost
• 12:35
  system of care.
• 12:37
  And that's where you get this,
• 12:39
  unaffordable this this affordability crisis that we're all
• 12:42
  facing right now.
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  And what what is a little,
• 12:47
  striking in where and why we are so
• 12:49
  focused on improving health outcomes with our provider
• 12:52
  partners,
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  is if you look at younger
• 12:55
  age cohorts,
• 12:57
  the prevalence of chronic disease in those age
• 12:59
  cohorts are higher than they've ever been,
• 13:02
  which tells you that if this continues
• 13:05
  without interruption
• 13:06
  and years from now when, let's say, somebody
• 13:09
  who's age 18 to 34 is age 50
• 13:11
  to 60,
• 13:13
  more likely than not right now without change
• 13:15
  or intervention, they'll be living with more chronic
• 13:17
  diseases than individuals in that age cohort right
• 13:20
  now. That means more cost as well.
• 13:23
  So we believe that as a health plan,
• 13:25
  as a broader industry with the provider partners,
• 13:27
  we have an obligation to address that, and
• 13:30
  that's why we're so heavily focused on the
• 13:31
  health outcome side of things.
• 13:34
  Absolutely. And I'm so glad you brought that
• 13:36
  up that not only are are is chronic
• 13:38
  disease increasing in this country, twenty seven percent
• 13:41
  you said since the the start of the
• 13:43
  century,
• 13:43
  but that young people,
• 13:45
  are are getting sicker as well. And we've
• 13:47
  heard we're we're hearing this from health plans,
• 13:50
  the largest health plans all over the country
• 13:51
  and how they're trying to
• 13:53
  intervene with employers,
• 13:54
  to help employers intervene,
• 13:57
  on on their younger and sicker employees.
• 14:00
  It's a fascinating
• 14:02
  I don't wanna say new trend, but just
• 14:04
  a new challenge that you all are having
• 14:06
  to tackle.
• 14:07
  And as you mentioned, in terms of your
• 14:08
  mission, you can't do it alone. So I
• 14:10
  wonder
• 14:12
  where do you see
• 14:13
  the value of partnerships overall right now
• 14:16
  at Blue Shield? I we've we've we've heard
• 14:18
  a lot of buzz throughout the industry,
• 14:20
  with you all specifically in in your your,
• 14:24
  unbundled
• 14:25
  pharmacy model. And so
• 14:27
  what kind of inroads has has the company
• 14:29
  made with other key players across The States,
• 14:33
  unique care models overall?
• 14:35
  What's the latest there, Mike?
• 14:38
  Yeah. So you gave one example, which is
• 14:39
  what we had we had kinda coined as
• 14:41
  pharmacy reimagine, which was,
• 14:43
  a modular solution
• 14:45
  to to a an alternative to a pharmacy
• 14:48
  benefit manager. And so we've got some great
• 14:50
  partners that make up various components
• 14:52
  of what those services that would typically be
• 14:54
  done in under a pharmacy benefit
• 14:57
  manager. We're now doing them with different partners
• 14:59
  and saving a lot of money there that
• 15:01
  we pass along to our members in the
• 15:03
  form of lower lower rates.
• 15:05
  So that that's one area. Where we're spending
• 15:08
  a a significant amount of time and, again,
• 15:09
  this goes back to those three areas I
• 15:11
  said that we're we're focused on as an
• 15:13
  organization.
• 15:14
  And from a partnership perspective, which can be
• 15:16
  a word that's often
• 15:17
  overused or defined in different ways.
• 15:20
  Sitting down with provider partners around,
• 15:24
  how do we see the world? Do we
• 15:26
  both agree that addressing
• 15:28
  the chronic disease
• 15:30
  burden or prevalence issue is is a burning
• 15:33
  platform type issue?
• 15:35
  And if so, what are the best ways
• 15:37
  to solve that problem? And what we're finding
• 15:39
  is, in particular, through digital and clinical integration
• 15:43
  and things like bidirectional data sharing to make
• 15:45
  sure that we both or collectively have our
• 15:47
  arms around the patient and the member at
• 15:49
  all times,
• 15:50
  get them the right care at the right
• 15:51
  time and to intervene earlier,
• 15:54
  and ideally to keep them healthy. There's a
• 15:57
  lot of traction we're making there. Not just
• 15:59
  with our accountable care organization partners,
• 16:01
  but others. Because a lot of the work
• 16:03
  that we're talking about here in chronic disease,
• 16:05
  providers have been very focused on that, in
• 16:07
  particular, on the management side and working upstream
• 16:09
  on prevention for a while.
• 16:11
  We can do more together, and that's what
• 16:13
  we're focused on in terms of clinical and
• 16:15
  digital integration to achieve that.
• 16:18
  Certainly. And I know on our end, we've
• 16:20
  been definitely following Blue Shield these last few
• 16:22
  years with what you just mentioned,
• 16:24
  really pushing for the portable digital health record,
• 16:26
  your work with Salesforce,
• 16:28
  your prior authorization,
• 16:30
  work. We we've been following it along. So
• 16:32
  it's it's great to hear this is a
• 16:33
  top priority, under your leadership as well.
• 16:36
  To close us today, Mike, I wanna
• 16:39
  offer you the floor in in frame it
• 16:41
  as you're talking directly to other health plan
• 16:44
  leaders from all over the country facing
• 16:47
  very similar, if not the same challenges that
• 16:50
  you've laid out during our conversation today.
• 16:53
  What advice would you offer them
• 16:56
  in terms of trying to tackle these affordability
• 16:58
  and access challenges that really seem to be
• 17:02
  very difficult to to get a grapple on?
• 17:04
  I would imagine
• 17:06
  most, and as I talk to my counterparts
• 17:08
  and and others
• 17:10
  about the industry, about health plans and providers,
• 17:13
  it's it's addressing this issue around the the
• 17:16
  disease burden in this country,
• 17:18
  and that's that's hard work. And, there's only
• 17:21
  so much of that that is within the,
• 17:23
  quote, unquote, direct control of providers or health
• 17:26
  plans, but we need to be doing everything
• 17:27
  we can,
• 17:28
  together to be addressing that.
• 17:30
  In parallel, we're gonna need other support of
• 17:33
  a policy, etcetera, to go upstream on those
• 17:36
  on on those diseases to truly get to
• 17:39
  the root cause of various social determinants of
• 17:41
  health,
• 17:42
  food, housing insecurity,
• 17:44
  you name it. A lot of factors here
• 17:46
  at play. So while we focus on what
• 17:48
  we can control, we also need to be
• 17:49
  making sure that other efforts, other stakeholders
• 17:52
  are playing their role here in addressing what
• 17:54
  is,
• 17:55
  yes, it's an affordability crisis. It's really a
• 17:58
  public health crisis in this country as
• 18:01
  well. And then the other, other words of
• 18:03
  of encouragement, what I find to be very
• 18:05
  helpful is spending considerable time with with your
• 18:07
  provider partners in the network. And because the
• 18:09
  what I find is, like, health plans and
• 18:12
  provider organizations are really working hard to achieve
• 18:14
  their missions,
• 18:16
  trying to address this chronic disease burden and
• 18:19
  affordability.
• 18:20
  But the reality is the opportunities
• 18:23
  to address most of this actually sits between
• 18:26
  organizations,
• 18:26
  not solely within them.
• 18:29
  So how do you find those opportunities that
• 18:30
  sit between organizations,
• 18:32
  that sit between patient visits?
• 18:35
  That's where the real opportunity comes in. Real
• 18:37
  progress is gonna happen when we work together,
• 18:40
  focusing on improving health outcomes. So I know
• 18:42
  that's a goal that's shared by many and,
• 18:45
  I I hope that they stick with it.
• 18:47
  Wonderful. Well, I I think that's a really
• 18:49
  good place to leave things. So, Mike, I
• 18:51
  wanna thank you for taking the time to
• 18:52
  chat with us and for sharing your expertise
• 18:55
  with our audience. We really appreciate it.
• 18:58
  Well, likewise. I really appreciate your time and
• 19:00
  and the the time talking with you. Take
• 19:01
  care. Absolutely. And to our listeners, if you'd
• 19:04
  like to listen to more podcasts from Becker's
• 19:06
  Healthcare, you can visit beckershospitalreview.com.