Highmark Health's new executive vice president and market president for Western Pennsylvania discusses his unique role bridging two sides that don't always see eye-to-eye.
Editor's note: This conversation is a transcript from an episode of the HealthLeaders podcast. Audio of the full interview can be found here and below.
"The enemy of my enemy is my friend."
That proverb should be on the minds of payers and providers alike as both sides continue to battle economic challenges in the wake of the COVID-19 pandemic from their respective positions.
Putting aside differences and working together is the best path forward, says Dr. Bruce Meyer, Highmark Health's new executive vice president and market president for Western Pennsylvania.
In his new role, Meyer is bridging the payer side of Highmark Health and the provider side of subsidiary Allegheny Health Network, giving him a unique perspective on the issues facing the two groups.
Meyer recently sat down with HealthLeaders for a podcast interview to talk about the opportunity at Highmark Health, what specific challenges payers and providers are grappling with, and why the "adversarial relationship" between the sides needs to be left in the past.
This transcript has been edited for clarity and brevity.
HealthLeaders: What is your new role affording you and how are you finding it so far?
Meyer: It gives me the opportunity to really think about how we have to redesign the economics of healthcare from the payer and provider perspective to create a sustainable model. Because right now, we are pretty much in a semi crisis mode, particularly for hospitals and healthcare systems in terms of the economic dynamics of the significant increases in expenses and a flattening of the revenue stream over the last 18 months or so as we've been through the pandemic. We've seen these dramatic changes in economics for hospitals and health systems that is an unsustainable situation. So I feel like I'm in a unique opportunity to try to find a much better future that gives us an opportunity to create more sustainability.
HL: You mentioned that hospitals and health systems right now are in a semi crisis mode and the economic challenges are plenty. What specifically have you found to be of the most concern?
Meyer: I think the biggest concern is really workforce. Between burnout issues and the rise of the nursing workforce shortage, that's profound. And what that has led us to is to have a significant increase in travelers and even foreign nurses coming in just to be able to provide the appropriate care at healthcare sites, particularly in hospitals and health systems. And that's led to very significant increases in costs in patient settings and facility-based settings, but also in doctors' offices because you just have to pay a premium in order to get the staff to be able to take care of patients.
I think second to that is supply chain. Inflationary costs in the supply chain are no different and actually at some level worse than what we've seen in food and housing and other kinds of pricing in this country. In terms of inflation, we've had double-digit inflation in those arenas over the last three years. In healthcare, the same kind of thing with pharmacy costs having had double-digit inflation over the last three years. And those three things combined have just led to a dramatic rise in the expense equation for the facility-based side of the healthcare world.
Pictured: Bruce Meyer, executive vice president and market president for Western Pennsylvania, Highmark Health.
HL: On the payer side, how do you see these problems trickling over?
Meyer: On the payer side, we face a similar dramatic issue, which is that employers and the federal government pay for the vast majority of care in this country. And we've been shifting costs of care onto employers in one way or another, whether they're self-insured or commercial. Employers have reached a point where that continuing inflationary cost of healthcare has simply become unsustainable for them. Employers have said 'I can't sustain this continued increase' and so there is incredible pressure on plans to find ways to plateau the inflationary increase or just cap off increased costs in terms of healthcare.
That's why we've seen a dramatic shift from commercial insurance to self-insured insurance because that's a way for people to help control their costs a little more. Then the onus entirely becomes on the individual and health literacy in this country has not reached a point where individuals really understand cost of care and can make good decisions on their own. Yet that's obviously a goal for us.
HL: What strategies do you feel payers can utilize right now to deal with these challenges?
Meyer: Without tooting the horn of Highmark and what Highmark is trying to do in our catchment area, I think there's got to be a much better partnership between payers and providers. We, for the most part in this country, have had relatively adversarial relationships between payers and providers in which payers kind of view providers as folks who are just spending money unnecessarily and providers look at payers as folks who have a giant pool of money sitting somewhere in a vault somewhere that they're simply not giving to providers for the work that they are doing. And although that's simplistic, it's very real. And that adversarial relationship has been going on for 40 years in this country. It's just accelerated significantly through the pandemic because with significantly less spending for healthcare, payers were able to do well because they still received the payments from the government and from the businesses, but providers struggled mightily because they weren't seeing volumes and getting revenues in.
I think that the solution is that we've got to find a way to partner. We've got to find a way to work together to find a better future for the economics of healthcare in this country. Because our current economic trajectory is truly unsustainable. And what we cannot do is say that there's a winner and a loser in that economic equation. Because ultimately, the loser is the public who need healthcare, and particularly the disadvantaged among us who have poor access or poor health literacy in terms of being able to live their best lives.
Jay Asser is an associate editor for HealthLeaders.