Kevin Conlin, who announced his retirement as chairman of Horizon Blue Cross Blue Shield of New Jersey on Monday morning, has seen the health insurance landscape make dramatic changes in his nearly four decades in the industry.
But, for all that has happened, especially since the passage of the Affordable Care Act in 2010 — a watershed moment for the industry, he said — Conlin feels the sector still is adjusting its spot in the national landscape.
The biggest reason: It’s no longer about just health insurance.
“I think we’re going to continue to see the blurring of lines between the roles of health insurers and those who have traditionally been the delivers of health care,” he said.
“Health insurers have figured out that we’re not going to be able to be competitive with other large health insurers if we don’t collaborate more closely with providers in order to produce the different results we’re all looking for — lower costs; higher, objectively measured quality; and an enhanced member or patient experience.”
Conlin said he sees four key trends:
- More collaborations: Conlin feels there will be more integration between providers and payers. Either as equal partners (he notes this is the approach favored by Horizon) or by acquisition (he points to Optum Care, which is run by UnitedHealthcare, acquiring Riverside Medical Group. And, on a larger scale, CVS acquiring Aetna);
- Telehealth adaptations: Conlin feels it’s the genie that has been let out of the bottle. “I think it’s been shown to be effective, and physicians now see it is a viable alternative,” he said. “And, because of some changes that we and other insurers have made with regard to coverage, the adoption has been very strong.” Conlin feels this will lead to more patient monitoring in the home, too.
- Integration/acquisition of payers and pharmacies: Conlin notes the recent purchase of a specialty pharmacy by UnitedHealthcare — as well as other acquisitions. “This hasn’t gotten a lot of visibility yet, but more of it is coming,” he said.
- Integrated behavioral and social health: The idea of developing care around social determinants of health will continue to grow, he said. “Payers are essentially providing various strategies to address the social determinants of health,” he said. “We’ve had some very encouraging results in New Jersey. I think this is something that’s going to be replicated by others here and around the country.”
Conlin, prior to announcing his retirement, talked with ROI-NJ on a number of subjects. Here’s more of the interview, edited for space and clarity.
ROI-NJ: There’s so much we could go into here. Let’s start with more from the current state of the industry — it’s an industry that is being bombarded with outside money, not only from private equity and venture capital firms, but big tech companies, such as Amazon and Apple. How is that impacting the sector?
Kevin Conlin: There’s definitely much more big money finding its way into health care. It was not that long ago that most of us only concerned ourselves with what our direct competitors were doing in terms of their strategic development. Now, we find ourselves concerned about, what’s Amazon doing? What’s Apple up to? What’s Uber thinking about? Very nontraditional players in the health care space.
I think if you were to talk with (RWJBarnabas Health CEO) Barry Ostrowksy, (Hackensack Meridian Health CEO) Bob Garrett or (Atlantic Health CEO) Brian Gragnolati, they would tell you the very same thing. They’re concerning themselves now with these nonconforming competitors that they weren’t dealing with before.
And, just beyond those companies are enormous private equity and venture capital firms who are ready to make money available to entrepreneurs who are developing some solution. They will have impact, either for the good or the bad, on both health care providers and health insurers.
ROI: How did that change the way Horizon operated?
KC: We have gotten much more diligent at scanning the horizon with regard to what is going on in all of these various sectors. Where is the money getting invested from publicly owned companies? Where’s the private money going? We think this is a sign of where things are going to be heading. And then, we evaluate all of that in the context of what our strategic direction is — and we make decisions as to whether we need to be concerned about something. And, if so, how quickly do we need to respond?
ROI: This sounds like the pace of change only is going to accelerate. Is that true — and is that good?
KC: The amount of money that’s flowing into health care certainly is not going to cause the pace to slow down. It usually has the effect of accelerating your decision-making and the actions that you go about taking.
In the short term, it’s not a lot of fun to have to deal with that. But, I think, when you take two steps back, it’s probably a good thing for health care to have this type of disruptive investment that’s taking place, because I think it’s making everybody that’s a current player in the health care field stand up and pay attention to some of these new developments.
ROI: New developments — that seems to be all we’ve gotten in health care in the past decade or so, starting with the passage of the ACA. That was supposed to completely disrupt the industry. Looking back, did it?
KC: Absolutely. Health insurance stopped being about just having the broadest network of providers and driving to the lowest unit cost that you can negotiate with other providers. It forced significant changes on the part of health insurers with regard to how they participated in the exchange. This required a significant amount of change for virtually every health insurance company.
It also, bluntly, affected earnings potential in several of the business lines by essentially requiring a minimum amount of the premium that had to be dedicated to medical costs — thereby, the amount of profits that could be made in the in the area.
It created a new form of competition. The ACA fundamentally changed the entire industry.
ROI: Of course, no matter how much change comes, people still clamor for more — still say our health care system is broken. As someone who has spent a career in the industry, is that difficult to hear?
KC: It would be, if I only listened to the criticism. We honestly take an approach where we have a way of benchmarking the satisfaction of our members. So, we have the ability to put the criticisms in the appropriate context: These are opportunities for us, and even challenges for us, to fix whatever caused this particular issue that the member might have had.
It also permits us to differentiate between areas where we have made an error, we missed the opportunity to serve a member effectively, as compared to just the fact that, maybe there was something in the policy that they didn’t like — and they were not completely familiar with at the time that they bought the policy.
So, we try to segregate between the type of criticism that that we should accept and respond to, from that which may not be the result of something that we, per se, have failed to do.
ROI: Speaking of criticisms, many people say New Jersey is a tough place to do business. As the head of one of the state’s premier companies, what’s your take on that?
KC: I’ve got two thoughts. For starters, there’s something that the governor (Phil Murphy) always mentions, with which I agree strongly. We’ve got an enormous base of talent in this state, with widely represented areas of focus and very deep raw intellectual talent. That’s something that we benefit from.
I’ve spent a lot of time in many other states with other companies. The talent pool here is remarkably strong. And that’s a sentiment that is shared not just by myself, but by many others CEOs in the state.
The second observation is this is a state that wants regulation — and believes that a strong regulatory environment is a needed characteristic of how the how the state operates. That can be good. And that can be not so good.
But, that’s part of what you get when you choose to set up your business in New Jersey. And, again, this is what the people of New Jersey have clearly indicated that they’re looking for. That can present some challenges when you’re dealing with competitors who may not be based in New Jersey.
ROI: New Jersey is the smallest big state or the biggest small state, depending on how you look at it. Either way, most feel it means business and government is connected far more than in other areas — would you agree?
KC: I would completely agree with that. The level of communication and the level of engagement with elected officials, with other CEOs, with other leaders, is real. This is a dense state. There’s a lot of population here. But, in a lot of ways, once you get to know it, it feels like it’s a relatively small organizational unit, because so many people know one another. We have the ability to pick up the phone and get in touch with one another on any given topic at any given time. And, I think that allows for a great deal of effectiveness in how things do to get done.
ROI: Getting things done. That’s been your life for four decades. Now, you hit retirement. We have to ask, what’s on your to-do list now?
KC: This is the honest answer: I really don’t know. I’ve consulted with a bunch of other people who were in senior leadership roles who retired relatively recently. And, if I got one common piece of advice, it was this: Take advantage of the fact that you don’t have the long hours anymore or a schedule that it sets itself for you. Stop, recharge your batteries, spend some time with your family. And then, figure out what’s next. That makes a lot of sense to me.
I know I will be spending more time with my family. I’m proud to report a new grandchild that was a ray of sunshine in the middle of the pandemic. So, I’m going to make sure that I get to see my granddaughter more than ever. I can’t think of anything better.
