Anthem's Joe Swedish believes providers and payers are ready to cooperate on creating a new healthcare system focused on customer service and moderated cost.
"Collectively, we're creating a renaissance period in healthcare."
Those are bold words. But if anyone is qualified to make such a sweeping statement, it's probably Joe Swedish, president and CEO of Anthem Inc., the nation's second-largest health insurer, headquartered in Indianapolis and operating Blue Cross and Blue Shield plans in 14 states. By "collectively," he's talking about cooperation between providers of healthcare (in this sense, the full gamut of healthcare services) and the payer side, all pushed by value-minded government payers.
Joe Swedish |
His prediction parallels a bold move in Swedish's own career, which was centered on the healthcare services side prior to being named Anthem's top leader just two years ago. From 2004 to 2013, he led Trinity Health, which had 47 hospitals when he departed to take the Anthem post.
If he didn't think a renaissance was in the offing, he wouldn't have made the switch, he says.
Two weeks ago at a Nashville Healthcare Council luncheon, former U.S. Sen. Bill Frist sat down for a one-on-one with Swedish in front of a roomful of many of the top healthcare executives in the country. Swedish articulated a vision of a future of better customer service and moderated cost mandated by a system that is morphing toward greater patient responsibility for healthcare costs.
Renaissance or dark ages?
However, Swedish's contention that healthcare is headed into a renaissance period, and all the positive vibes that image brings to mind, is highly debatable. While healthcare costs are indeed growing at a much slower rate than in recent years, the rate of growth still outpaces the rate of growth in incomes. On top of that, patients are expected to pay more of their healthcare out of pocket, so premium growth trends are far from truly capturing how healthcare costs are squeezing many, particularly the employer-sponsored class, who are being asked to cover a much larger portion of their costs in coinsurance and deductibles. Drew Altman, president and CEO of the Kaiser Family Foundation, has written that the amount that people with employer-based insurance pay for premiums has risen 212% in the past 15 years. Let that rate of growth sink in for a moment.
If a renaissance is indeed in its early stages, then we're definitely still in the latter stages of the dark ages for accountability and value. But there's no way to verify that contention. The sample size is too small and the time period is too short. Statistics could support either argument. Renaissance or not, what is certain is that healthcare is changing dramatically as players attempt to get a handle on value.
Swedish says that in the provider world, his focus was on infection rates and cost structure—things where his organization could make a difference internally. As a health plan leader, he says he is focused on managing total cost of care. Anthem's data repositories hold promise in that they can help effectively analyze individual markets, systems, and physicians to manage and reduce variation. And it will happen because the federal government, which "controls the gold," is pushing it, he says.
That means to stay relevant, health insurers need not only to develop shared value partnerships with providers (Anthem has 120 ACOs that Swedish says are critical to that effort) but they also need to build a more consumer-centric model. Insurers should help patients choose the right plan, with clarity of benefit structure, help in emergencies, and give straight answers to patients about their medical condition.
Again, it's a fine vision, but given history, not many patients would think of their health insurer as an institution that is looking out for their best interests. Swedish concedes that point, saying the industry's "net promoter score," a tool to gauge the loyalty of customer relationships, is "dead last."
Anthem will have to fight those perceptions in order to succeed, he says. But with customers making choices on a variety of deductibles and plan designs, health plans have to be responsive in engaging and communicating with customers.
Now that really would be a Renaissance. With a capital "R."
Risk and total cost of care
Swedish anticipates lots of competition, saying he believes about half of healthcare delivery systems are reporting they will create some type of insurance product, with some such as North Shore-LIJ Health System going "all-in" with licenses and risk-bearing products in the markets they serve.
"I'm no big fan of that, no secret. I lived through the '90s and saw the damage that it put on delivery systems that didn't know how to take risk, manage it, or come up with the reserves," he says.
Though he's biased, he says Anthem's partnerships with health systems to create "integrated health systems" offer more incentive for both sides to get value mechanisms right, and less risk, than the alternative, captive health plan. Anthem has such partnerships in primary care with Aurora Health Care in Wisconsin and has launched Vivity, an "integrated health system" in Los Angeles with seven hospital systems in the area. Anthem shares both upside and downside risk with those organizations.
Swedish says regardless of their strategy to deliver value, healthcare organizations need to develop and maintain a focus on what he calls "total cost of care," a concept that means taking responsibility for coordinating as well as providing care.
He explains: "After that patient left your office, did you know they went to CVS and picked up four meds? I've got claims data that shows total cost of care. If you are going to play in population health, you have to engage in this, too."
Healthcare leaders should celebrate creation of innovations like telehealth and other new models, he says.
"That's the revolution and renaissance," he says. "Healthcare is lagging other industries but the speed of change is picking up amazingly fast."
Philip Betbeze is the senior leadership editor at HealthLeaders.