Can AHIP Adapt to Healthcare's Shifting Landscape?

A former health insurance industry executive turned critic likens the new CEO at AHIP to the captain of the Titanic, with daunting challenges ahead as the trade association fights to remain relevant.

America's Health Insurance Plans announced this week that industry insider Matt Eyles will become the next CEO when Marilyn Tavenner retires on June 1.

The change in leadership comes as the trade association for the healthcare industry adjusts to a shifting healthcare landscape. In the past three years AHIP has seen the departure of three of its biggest members, UnitedHealth Group, Aetna, and most recently Humana.

Eyles, whose resume includes jobs at the Congressional Budget Office, Pfizer, Eli Lilly, and Coventry Health Care, has been with AHIP since 2015, and now serves as its COO. 

Wendell Potter, a former health insurance industry executive turned ardent critic, likens Eyles' new job to "steering the Titanic." He said the new AHIP leader will face daunting challenges in his tenure as the trade association fights to remain relevant.

Potter spoke with HealthLeaders Media. The following is an edited transcript.

HLM: What do you think about the choice of Eyles?

Potter: Given his background, I wasn't surprised that they went with someone like him. He is going to have a very challenging job. He clearly knows his way around Capitol Hill and that is what is most important. At the end of the day, it’s mainly a lobbying and PR job. He is trying to continue to sell the relevancy of the health insurance industry going forward and he is going to have his job cut out for him. I wouldn't want Matt's job. He is steering the Titanic.

HLM: What sort of challenges do you foresee?

Potter: First of all, the health insurance business is changing quite a bit and AHIP has lost some of its biggest dues-paying members. They are not seeing that organization as relevant as it used to be. Many have decided they can do their own PR and lobbying just fine and their interests are not aligned with the remaining members of AHIP, whose base is not as big as it once was. It no longer includes some of the biggest players, so their revenues are not what they used to be.

Plus, the industry itself is changing. In the past several weeks we have seen news of CVS and Aetna wanting to combine, and Cigna and Express Scripts too. So, you've got middlemen insurance companies and PBMs looking to tie-in and become different kinds of companies, not just health insurers.

That said, there may remain a number of traditional health insurers in AHIP, but that is a world that is not going to be around much longer.

HLM: Do you see the traditional role of the health insurer as an anachronism?

Potter: Exactly! When I saw the CVS/Aetna deal and the Express Scripts/Cigna deal I was thinking about different dinosaurs morphing to try to perpetuate their existence a while longer. PBMs and health insurers as we've known them are dinosaurs that will both be disintermediated. Those mergers are a way for those companies to get bigger and extending their relevancy for a while longer.

You've got people like Warren Buffet, Jeff Bezos and Jamie Dimon looking at healthcare and they have come to the realization – and most business will come to it a bit later on – that the system doesn't work. Employers are waking up to the fact that they've been served a bill of goods by these middlemen. They are not necessary, and so the big employers are already direct contracting with healthcare providers and using health insurers for back-end operations.

HLM: What do you make off Marilyn Tavenner’s tenure at AHIP? She seems to have kept a low public profile.

Potter: It's interesting. It may have been because of what was going on in Congress. Karen Ignagni seemed to be more willing to be a visible spokesperson for the industry and she was quite effective.

I didn’t see Marilyn playing that role. She probably worked behind the scenes meeting with members and staffers on the Hill and the administration in a nonpublic way, which may have been her way of doing things. What we saw with her and what you are seeing with Matt is the typical Washington revolving door: Marilyn coming out of CMS to a trade association to make a few more bucks before calling it quits.

HLM: Can AHIP adapt to this changing landscape?

Potter: That's their biggest challenge. I don't know how they are going to remain relevant as they once were. They've got a shrinking base of potential members. There will probably be more consolidation in the industry. Cigna and United and the other companies have different business lines and different profit centers. In fact, health insurance is becoming less important to these big companies.

Maybe there could be a tie-in between the Blue Cross Blue Shield Associations and AHIP. I don't know if that can be done, but AHIP is a combination of different organizations that have come together in the past. AHIP's predecessor was the Health Insurance Association of America and when I first started working in the insurance world, HIAA’s predecessor was the Group Health Association of America. That gives you an idea of how things have evolved over the past 20 years. AHIP is the third name of the organization that I am aware of. They may have to re-invent themselves again.