Latest / Becker’s Payer Issues Podcast / Rob Hitchcock, President and Chief Executive Officer of Select Health

Transcript

Rob Hitchcock, President and Chief Executive Officer of Select Health · Becker’s Payer Issues Podcast

• 0:02
  This is where health insurance leadership comes together.
• 0:05
  Becker's fourth annual spring payer issues roundtable brings
• 0:08
  together over 400 payer and health plan executives
• 0:12
  and more than 100 speakers to Chicago April.
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  This year's event includes keynote conversations with the
• 0:19
  industry's top leaders and former president George W.
• 0:23
  Bush. For the full agenda and event details,
• 0:25
  visit beckershospitalreview.com
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  and click on the events tab in the
• 0:29
  upper right. We're looking forward to hosting you
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  here in Chicago.
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  Hello, everyone, and welcome to Becker's Health Care
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  Podcast. I'm Scott King, thrilled today to be
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  joined by Rob Hitchcock, president and chief executive
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  officer of SelectHealth. Rob, how are you? Thanks
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  so much for joining us.
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  I'm good. Thank you very much. It's a
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  pleasure to be here. Of course. Yeah. I
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  know I know we have a lot of
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  of big topics,
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  in health care, especially with health plans to
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  get to. But before we jump into the
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  the topic, can you please just kinda tell
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  us a little bit about your your background
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  and your career journey?
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  Sure.
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  I, I'm currently the president and CEO of
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  SelectHealth as you as you said. I've been
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  a a health insurance executive for,
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  many years. Been with companies like Humana and
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  Centene and some of the Blues plants.
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  Moved out to Salt Lake about three and
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  a half years ago and have been the
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  CEO of SelectHealth for about three years now.
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  And, what's interesting about SelectHealth is it's it's
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  a little different than the the national players
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  in that it's owned by Intermountain Health. So
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  SelectHealth is a wholly owned
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  subsidiary of Intermountain Health,
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  and, so we're what's known as a community
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  health plan or a provider owned health plan,
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  which which makes us unique
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  in the ecosystem of health insurers. And,
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  I can say it's just been a pleasure
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  to be part of an organization like that.
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  Thanks thanks a lot for the background and
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  further, Rob. Yeah. Certainly a a unique position
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  to be in
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  in this space. And let me ask you,
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  getting on the first topic, how are your
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  relationships with providers changing as both sides face
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  cost pressure and workforce shortages?
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  That's a great question. I you know, being
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  a provider owned health plan has put us
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  in a unique situation where our default
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  as a health plan at SelectHealth is to
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  work very closely with providers. And so,
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  we were founded in 1983,
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  so we've been operational now for about forty
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  three years and in our forty three year
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  journey,
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  our first thought is how do we work
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  very closely with our providers
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  and how do we take care of our
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  providers and how do we work collaboratively
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  with them. And so,
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  from that perspective, I do appreciate that there's
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  a lot of cost pressures, not only for
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  health plans but for our physician and hospital
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  providers as well. And I have a great
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  amount of appreciation for that. But
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  I also think that the way that we
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  work
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  together with providers and with hospitals is together
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  rather than as,
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  I call it the enmity model
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  where each side is just trying to protect
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  their own interests.
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  And so we kind of default to that.
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  I think a great example of that is
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  something that we all had to live through,
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  especially providers,
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  was the change healthcare,
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  incident that happened a little over a year
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  ago.
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  And the way we handled that was we
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  were getting a lot of outreach from our
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  provider partners saying, hey, look, I'm in danger
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  of not being able to make payroll
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  because I'm not I'm not getting my claims
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  paid due to this this issue with Change
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  Healthcare. And so what we did is we
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  advanced
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  money to our provider partners so that they
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  can make payroll, keep the doors open,
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  and
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  we were a little nervous about that. We
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  felt it was the right thing to do,
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  but we're a little nervous because we weren't
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  sure
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  that that money was gonna be paid back.
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  And in reality, what happened was all that
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  money was paid back.
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  And
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  our our relationships with the providers, although I
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  I would like to think was good before
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  that, was even better after that.
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  And so I think
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  I think we've always defaulted to that. But
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  the other thing I would say is
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  the way we get through these cost pressures
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  that we're that everybody's facing
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  is is, again, we have to do that
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  together. And I think that's gonna require a
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  lot of operational
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  changes.
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  And the only way that that can be
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  done, I think, is working together and being
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  collaborative and
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  just being open and honest with each other,
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  which I think
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  in a lot of ways in the industry
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  doesn't happen very often.
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  And so that's what we're focused on is
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  really how do we how do we be
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  open? How do we be have authentic conversations
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  with our provider partners? And how do we
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  work through these challenges together rather than
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  rather than independently?
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  Yeah. You know, it doesn't happen very often,
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  Rob, and and hopefully, you'll start to see
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  more. But I I think that was a
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  great example of, you know, reaching across the
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  aisle, so to speak, and advancing those funds.
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  And I'm glad to see they Yeah. Got
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  paid back. But, yeah, just a great example
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  of kinda going out of your way to
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  make sure everyone can can work together effectively.
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  What do you what do you see the
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  biggest gap today?
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  Excuse me. Where do you see the biggest
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  gap today between
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  payer strategy
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  and operational execution?
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  Well, I think I think there's a few
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  things. One is,
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  oh, there's a lot of external pressures, I
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  think, on health plans today. And
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  the one example
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  I'll I'll give you on that is some
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  there's a lot of regulatory
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  pressures that are that are put on us,
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  and I think regulatory
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  changes and and,
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  are always
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  have positive intent behind them,
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  but it it does put some pressure. The
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  greatest example is on our individual product.
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  The federal government through
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  the one big beautiful bill actually increased premium
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  taxes. So for SelectHealth, that impact was about
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  $14,000,000
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  a year.
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  And that puts enormous pressure on us
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  to keep premiums low
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  and to benefit our communities that we serve.
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  So that's that's something that we're always cognizant
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  of of the regulatory changes that are that
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  are happening.
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  I think also our
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  our ability to change and to adapt, and
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  and let's face it, with the the changes
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  in the in the one big beautiful bill
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  or HR one, I'm not sure what people
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  are calling it, but,
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  that I think has changed
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  a lot of realities for people, not just
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  on the health plan side, but
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  for providers as well. I mean, when you
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  take a trillion dollars out of the healthcare
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  industry through specifically on the Medicaid side,
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  that changes things. And and I think from
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  an operational perspective,
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  what we're gonna have to become very good
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  at, and again, I think this goes back
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  to working with our our hospital partners and
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  our physician partners is, okay. Well, when you
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  when you take a trillion dollars out of
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  the ecosystem,
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  what do we have to do differently?
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  And and I think we are all going
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  to be doing things differently. And I think
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  I think some of the different changes that
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  are gonna happen
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  from the hospitals, from the physicians, and even
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  the health plans
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  is gonna be,
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  I think it's gonna be significant.
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  And so how do you how do you
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  do that? How do you change that? How
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  do you change your mindset? How do you
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  change the culture of
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  American,
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  the way health care is delivered in America?
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  And and to me, that's that's the biggest
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  challenge we got coming up in the next,
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  I would say, three to five years,
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  is how do you change the mindset of
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  how health care is delivered?
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  How do you how do you operate in
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  a in a in an environment where where
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  revenue has been decreased by such a significant
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  amount?
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  Those are really difficult challenges.
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  Well, that that's incredibly interesting thoughts there, Rob.
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  Let me let me ask you about that.
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  What do you think the first step is
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  towards changing that mindset? What do you think
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  that would be?
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  Well, if you think if you think about
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  the I I reference culture of of how
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  health care is delivered in America. The the
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  culture is and and this is a bit
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  of a history lesson, so, you know, forgive
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  me. This is not my personal opinions. This
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  is kinda just reality.
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  But
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  America,
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  back in the early foundations of the country,
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  decided that healthcare was a purchased service.
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  That the only way that an American can
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  get healthcare is if you purchase that service,
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  right or wrong.
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  And so I think the mentality
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  of of hospitals with physicians
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  and even health plans is that, okay. Well,
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  that we're gonna do this pay for services
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  or fee for service environment. You know? You
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  you get a
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  a procedure done or or a visit to
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  the physician that you have to you have
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  to pay for that, and you pay for
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  that on a on a on a on
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  a, you know, as incurred basis, so to
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  speak.
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  I think when you take a trillion dollars
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  out of Medicaid,
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  that mindset has to change.
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  And that means that you have to start
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  the way you treat
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  a Medicaid patient or a Medicare patient or
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  a commercial patient may may change.
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  So if if I'm a physician and you
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  think about physicians and how they think, they're
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  they're like, well, I'm gonna treat every patient
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  the same.
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  Well, that may not be
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  that may you may not be able to
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  do that
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  going forward. Right? You you may have to
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  change
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  how you treat a Medicaid patient, how you
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  treat a Medicare patient, how you treat a
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  commercial payment, and even the site of care.
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  So perhaps
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  a Medicaid patient is is not treated in
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  a hospital. Perhaps there's an alternative site where
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  a Medicaid patient receives care.
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  And and by the way, I know I'm
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  I'm saying some things that might, be disagreeable
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  to some folks, but I think that is
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  the reality.
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  And I think that is what providers are
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  struggling with and even what health plans are
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  are struggling with. It's like, if my reimbursement
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  on Medicaid is going down so dramatically,
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  how then do I change the delivery of
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  health care
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  to that population so that they still are
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  able to get the services they need, that
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  they're still able to live a healthy lifestyle,
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  but I do it in a way that
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  is 50%
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  less
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  expensive than it is today?
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  And and by the way, I don't have
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  the answers to that, which I think the
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  important thing is is that health plans and
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  providers, physicians and hospitals
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  have to work together to redefine that.
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  And I think even government is gonna have
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  to be involved in this. Because,
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  for example, if I'm successful at really reducing,
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  the cost of delivering care to a Medicaid
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  recipient,
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  either through reducing utilization or through working very
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  collaboratively
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  with
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  a provider partner, the government
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  should not,
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  punish me
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  for doing the right thing. So in other
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  words, if I really do that and I
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  really reduce the cost,
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  government is gonna have the tendency to come
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  and say, well, okay. Well, you've reduced that
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  cost, so I'm gonna reduce your re reimbursement
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  even more.
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  That can't happen.
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  You have to be able to reward health
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  plans and providers and hospitals for for doing
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  the right thing,
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  for reducing the cost, for keeping people healthy,
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  and not
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  strip them of their ability to to make
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  a living.
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  And I think that's gonna be very tempting
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  for government to do. And so I think
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  I think we're gonna have to work very
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  collaboratively, not just with our provider partners, and
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  I I say that term generically, but our
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  physician partners and our hospital partners, but also
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  with government agencies
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  and entities to say, hey, look,
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  We're we're gonna try to do the right
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  thing here, but you can't punish us for
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  doing that.
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  No. Absolutely. I think a lot of people
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  would certainly agree with that, Rob. And let
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  me ask you, what's one investment or initiative
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  you believe will most reshape how health plans
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  operate over the next two to three years?
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  I I think I think it is this
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  concept
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  of,
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  of culture.
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  And and I I use that term a
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  little bit loosely. But the culture of of
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  the way medicine is delivered in America is
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  is this concept of if I provide more
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  services, then I get paid more.
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  And that just that just has to change.
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  And what what's interesting about it is I
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  you know, I've been in this business for
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  a long time, and I I would say
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  that I've been I've been working on you
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  know, at Intermountain and SelectHealth, we call it
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  proactive care, but the industry calls it value
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  based care. So so I'll just use the
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  term proactive care.
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  I've been working on this for twenty five
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  years of my career. Kid you not. So
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  but I think now it it it there
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  is no other option. We have to figure
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  out a way
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  where you change the culture of of the
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  American the way America delivers health care to
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  say
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  that less is more, not more is more.
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  So how do we keep people healthy? How
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  do we keep them out of the hospital?
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  How do we
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  deliver services, health care services,
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  culture to home rather than in a bricks
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  and mortar setting?
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  And how do we do that in
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  a way
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  that's effectual,
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  maintains quality,
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  and improves the health
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  of the members and patients that we serve.
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  I think that is the biggest
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  challenge that we're gonna have as as an
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  industry.
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  And there's no way we get through that
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  unless we we figure that out
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  together.
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  Along the lines of changing the culture, if
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  you could change one
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  regulatory or industry practice tomorrow to improve affordability
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  and access,
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  what would it be and why?
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  Well, to me, you know,
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  not Medicaid is not only under the on
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  the the spot
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  light, but Medicare and Medicare Advantage is under
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  the spotlight. And
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  to me, the way the way health plans
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  are reimbursed on risk on this risk adjustment
• 13:53
  basis is is just a fascinating thing. I
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  think initially when
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  when CMS came out with a risk adjustment
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  model, I I can't remember when I was
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  I think it was, like, 02/1934,
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  somewhere around there. Is there early two thousands
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  where they changed that?
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  Again, I think the intent was very positive.
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  I think it's become this
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  this this
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  process whereby
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  health plans are encouraged to to make sure
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  they capture all these codes, and there's really
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  not a quality or a outcome,
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  measure that's tied to that. And so I
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  think risk adjustment has has gotten to a
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  point where it was never the intent.
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  The the way it's operating now was never
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  the intent of how it should operate. And
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  so
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  what what we're trying to do is we're
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  trying to work with CMS and and some
• 14:40
  really thoughtful people to say, how how can
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  our risk adjustment
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  the way we get paid for Medicare Advantage,
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  how can that
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  how can that be changed so that that
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  that we are we are paid
• 14:52
  in a way
• 14:54
  that encourages,
• 14:56
  us to make sure that members and patients
• 14:58
  are healthier,
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  not paid on a on a basis of
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  how many services that they get. Because, again,
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  I think it's this culture of America where
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  less is more rather than more is more.
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  And then and so so then how do
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  we work with a government entity like CMS
• 15:16
  to say, how do we get paid
• 15:18
  for making sure that that that that patients
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  and citizens of this country actually get the
• 15:24
  appropriate service at the appropriate setting. And that
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  mean may mean that they get they get
• 15:30
  less services, but it's it's more effectual and
• 15:32
  it's more, timely. And it's
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  the outcomes
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  are better rather
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  than this kind of focus on
• 15:42
  generating more services,
• 15:44
  if that makes sense. So I think if
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  there's one thing I could change, and we're
• 15:49
  trying to change that, is how
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  how do we make sure
• 15:53
  we're we're paid in a more efficient, more
• 15:56
  effective way than what the current risk adjustment
• 15:58
  process is,
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  with Medicare.
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  And the last question I have for you,
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  Rob, what issue is putting the most pressure
• 16:06
  on health plan margins right now,
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  and how are you gonna respond differently in
• 16:10
  2026?
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  I I I'm gonna say three. One is
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  is the regulatory pressures are real. They've always
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  been real.
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  So that's one. And I use one example
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  on the premium tax going up.
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  I think our
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  pharmacy spend is just out of control.
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  I think we're the only country in the
• 16:30
  world or one of
• 16:31
  one or two countries in the world that
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  do direct to consumer marketing,
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  and that just creates this perverse incentive. So
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  even though that you know, CMS today has
• 16:42
  done some wonderful things on negotiating drug prices,
• 16:45
  drug prices are still going up.
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  And not just going up, but going up
• 16:48
  in a dramatic way. We got to get
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  control of that. We got to figure that
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  out. It's just unsustainable.
• 16:54
  And then I think the other thing is
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  behavioral health.
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  On the one hand,
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  the pandemic was wonderful because I think it
• 17:03
  destigmatized
• 17:05
  mental health. And I think that's a wonderful
• 17:07
  thing.
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  But behavioral health spend
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  and is really,
• 17:13
  is really out of control as well. And
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  so we have to figure out how do
• 17:16
  we get people the help that they need
• 17:19
  because mental health is just so important.
• 17:22
  But how do we do that in a
• 17:23
  in an affordable way and in a way
• 17:25
  that, again, that gets the patients and the
• 17:27
  members the the help that they need, but
• 17:29
  in a more affordable way?
• 17:32
  Rob, thanks so much for joining us on
• 17:33
  the podcast and for a great conversation. Look
• 17:35
  forward to you speaking with us at the
• 17:36
  April event. Yeah. Thank you so much. Appreciate
• 17:39
  it.