Blue’s Two: Q&A with Arkansas Blue Cross and Blue Shield CEO Mark White and CEO-elect Curtis Barnett

Curtis Barnett was announced as Arkansas Blue Cross and Blue Shield CEO-elect in December and will be mentored this year by current CEO Mark White, who is retiring at the end of 2016. Barnett will gain experience in dealing with external constituencies, including the Blue Cross and Blue Shield Association and elected officials – the same areas where White lacked experience when he was named CEO-elect in January 2008 and spent a year in training.

Barnett previously has served as senior vice president of internal operations, where he has managed claims administration, customer service and other core administrative services. Of the company’s 2,800 employees, half have reported to him.

Talk Business & Politics interviewed both executives Jan. 14. Among the takeaways: If the state opts for a managed care model for part of its Medicaid processes, Blue Cross intends to compete for that business. Answers are edited for space and clarity.

TB&P: Mark, what did you learn when you were CEO-elect?

White: You know, the internal things I knew pretty well, and my predecessor, Bob Shoptaw, and I officed next to each other for years, but the external pieces were really the things that I wasn’t that familiar with. … Those are probably the keys.

Barnett: It’s kind of like if you had a Y axis, you know, it goes to a 100%. Mark starting out the year is here, and I’m down here, and over the course of the year, I’ll ramp up and he’ll not ramp down, but certainly will defer to me in a lot of cases to take the lead on different issues. And so, probably some time as Mark was saying, it would probably be in a year or so, that especially those decisions that extend out beyond Jan. 1, 2017, I’ll take the lead on those. Mark will be there available to me to be a sounding board and give advice and guidance, and really what we’re trying to accomplish is by Jan. 1, 2017, we’ve had a smooth transition, we’ve not missed a beat.

TB&P: How will Blue Cross look different in five years?

White: Directionally, I think. Curtis, if you think about some of the tools we’re wanting to build as far as outreach so you can take your smartphone and connect and find a doctor, can schedule appointments, can get results of your lab tests, can get referrals. So we’re engaged in building consumer outreach capability, which to me will make a different experience. Traditionally, we were more focused on the group contact. I guess our group benefits administrator was our principal customer.

Barnett: Exactly.

White: Now, the shift is toward the individual. … You’ve probably heard about medical homes, and we’ve been engaged with that for three or four years now – first in some prototypes, and now to a broader rollout. But back in the ’90s, I guess, when HMOs were kind of becoming mainstream, every individual had to select a primary care physician, and there was some backlash on that and a backlash on managing care, and we’ve moved away from that, not only as an organization but as an industry. And now we’re going back to, you need to select a primary care physician who’s really going to be your quarterback for managing your care relationship whether you’re a healthy individual or an individual with multiple morbidities. So medical homes are around that. … We want to push information to the customer, (and) we also want to push information to your physician in that medical home to enable them to provide better care and a better care experience.

TB&P: How will health care change in the next five to 10 years?

Barnett: Moving more toward an individual or consumer-based market. I think that’s going to occur, and it is occurring, and it will continue to occur. While we haven’t seen it happen dramatically in this state, the decline in the small group market, with employers of size 50 and below, we’ve seen some markets around the country where that’s declined significantly. We think there’s a good chance that will eventually happen in Arkansas as well, and (those individuals will) move to the exchanges, for example, to purchase health insurance. So we think that really the growth of the consumer, the individual market, will continue to happen going forward. We think that the large account, or the large group market, will continue to be viable going forward as well. Then certainly the government, or government-sponsored programs – that would be Medicare Advantage or the Medi-Pak supplement-type products. And so those will be three of the major market segments that we see in the future that are likely to emerge, and we’ll certainly be responding to that market, those market conditions, and changing our company in order to do that successfully.

TB&P: If the system becomes more consumer-driven, how do you feed information to a patient? If I’m in the doctor’s office in a gown and the doctor says he’s sending me somewhere, how do I say I need to check and see if somewhere else is cheaper?

Barnett: That goes back exactly to what I was mentioning a moment ago, when I said our focus is on making sure that experience is simple, positive, and so what can we continue to do … to push information out to our customers and to our members in ways that they want to see it, and they feel comfortable accessing that? And so some of that will be digital, some of that will be through the Web, that provides them with the tools that they need, and we’re constantly working to make sure that it’s very understandable, very relevant to them. But then that does have to be backed up by a team of people who are experts, who are knowledgeable and that people can trust and be that trusted source to help them out through the process. And a big part of that is those people also have to be empathetic and care about the people that they’re serving.

TB&P: What do you hope happens with the private option-Arkansas Works debate?

White: Let me take the first shot, and I would say that we think that the private option program has been a positive for the state from the standpoint of 200-plus thousand individuals who have insurance coverage or access to care that they didn’t have before. … The other thing that it’s done, it’s made a significant impact on uncompensated care in hospitals and in physicians’ offices where they had a number of their customers who weren’t able to pay for services regardless of the price. So to me, that’s a positive move. …

We think it’s been positive from a standpoint of our organization. We had 150,000 members last year between the private option and the regular (Affordable Care Act) market. That provides some scale, and we think we’ve represented those customers well in helping them identify the health care system, connect with the health-care system, get the services they need and be sure that their service needs and their claims are handled appropriately. So from that perspective, I believe it’s good.

Now the challenge, of course, is political and financial. I know one side of the debate is that, how are we going to afford the private option as a state longer term when it’s not fully funded by federal dollars? My view of that is that it’s going to be around a billion dollars a year, I think, total funding for all individuals in there. It is going to cost the state at some point in time 10% of that number. If you think about the positives, you think about moving the health status of individuals long term, you think about the economics around that billion dollars flowing into our economy, I believe that’s going to create enough outcome from that or enough engine from that to help the state afford that 10% share.

Barnett: Generally, we’re very supportive of what the governor’s proposing. I think from our perspective, I think where we have maybe a concern is there is the devil in the details with regard to the policy changes that come out of the work that he and his staff will do with (the federal Centers for Medicare and Medicaid Services). We think it’s going to be critical to have a public-private collaboration, a partnership approach to implementing the changes that do come out of the program. …

TB&P: But your view would be to get rid of it and have nothing in its place would be bad?

Barnett: Yes.

White: Absolutely.

TB&P: What do you think about the debate over whether or not Medicaid should have a private managed care provider administer some services?

Barnett: That’s something that we watch closely throughout the process and are very interested in. And we do see that that special needs population that’s been identified needs to have probably stronger intensive care coordination than they currently have through the process. Now one way of achieving that is through the expansion of the patient-centered medical homes, and we’ve been a big part of that and supportive of that as well. But I think as an organization as we’ve looked at this and watched this, we feel that if the state does want to move toward managed care for that population, then we certainly intend to be fully involved with that.

TB&P: So you all might actually try to …

Barnett: Compete for that business, yeah.

TB&P: Wow. Have you done that before?

Barnett: We’ve not, but we’ve looked at relationships, arrangements, with other Blue Cross Blue Shield plans who are in that space today and who do that very successfully. And we would look at joining in a partnership approach with them to provide that service. We think a lot of the things that we do here in the state and do very well with our provider relationships and our partners and some of the payment programs we already have in place would dovetail to some of the managed care programs. So we feel we’d be very successful at this if we got into it.

TB&P: The health-care industry is in such flux. How do you plan?

White: Well, you know, Yogi Berra said, if there’s a fork in the road, you take it, and we just plan for both forks in the road and try to anticipate that. If you think about the likelihood of repeal of Obamacare, to me, I think that’s not as likely as maybe some of the candidates would say. I believe that there would be a thoughtful review of that, and it would be more likely a modification of it that political leaders would say, “I don’t like these pieces of it. Let’s change those. I like these pieces of it. We’re going to keep those, or we’re going to modify those.” So I’m thinking that’s probably a more likely scenario going forward.

Barnett: The other thing you have to do as a company is, you have to build agility into your way of thinking, and recognizing just what you said, that change, and some of it unforeseen change, could be right around the corner.