BLOG: Key takeaways from the Alliance 2018 Spring Leadership Forum, Day 1

Joe Lastinger, Health Plan Alliance

04/19/2018

Health plan executives networking at Alliance 2018 Spring Leadership ForumA great conference is one where one can depart with a handful of ideas or solutions to problems, where friendships are formed and renewed, where leaders can hone their views of evolving markets, where business deals and partnerships are born or consummated, and where (hopefully) you return energized to your leadership role(s) knowing that precious time was well spent. 

At this year's Spring Leadership Forum, I think we did all this and more.  The following views are my own and do not necessarily reflect the presenter’s comprehensive perspective on very complex topics. 

 

Is population health dead?

On day 1, we heard from Neal Hogan, PhD who challenged us with the question: “Is Population Health Dead?” and provided us with 10 arguments demonstrating that ACO’s and VBP Models have not been successful and are unlikely to be successful as tools that can be used at scale nationwide.  Neal then offered 10 “principles” (he clearly favors symmetry) that health systems and provider-owned plans should consider moving forward.  The 10 principles were (in my opinion) thematically connected to the classic business admonition to “understand what business you are in.” There are a number of highly disruptive forces acting on health care at the moment – technology, changing consumer expectations, costs to society, government, new and well financed players, and 1000’s of smaller players (ankle biters) chasing narrow value propositions.  I think Neal was trying to tell us (and he might very well take issue with my summary) that rather than try to meet every new competitor or competitive force head on, that integrated delivery networks (IDN) leaders should be spending more time doing the things only they can, but doing them better and cheaper.  Demographics suggest that there will be plenty of demand for high acuity care over the next 25 years. 

 

Evolving national health plan strategies

According to Rob Cottrell with Cleveland Research, the change we are seeing in the market falls into seven categories:

  • Consolidation
  • Shifting towards B2C
  • New care delivery partnerships
  • Pilot programs
  • Pharmacy benefit management (PBM) integration
  • “Choosing dance partners”
  • Investing in Medicare
  • Focus on keeping employers happy

 The line of demarcation between buyers of health care and suppliers of health care is beginning to get very fuzzy.  On one hand, this seems to confirm that provider-sponsored plans have been on the right track.  Allocating/investing the premium dollar differently to reorganize care has the potential to deliver huge savings to employers and consumers.  The moves by national carriers to purchase providers could also be seen as defensive, intended not to deliver value to employers, but to preserve market share, to steer patients and dollars.  In my view, we are seeing a second big wave of post ACA change.  New technological capabilities, new consumer expectations and behavior, and the cost burden on employers and taxpayers collectively, require new and dramatic responses from the industry. 

 

The intersection of governance and strategy

In the afternoon, I had the privilege of moderating a panel with Jim Hinton, Baylor Scott & White Health; Terri Kline, Health Alliance Plan; Garry Maissel, Western Health Advantage; and Cathy Eddy, the Alliance; on the intersection of governance and strategy.  Jim delivered a presentation prior to the panel that started with the observation that “governance has never been harder, nor more important.”  He started with a refresh on the basics of what a board is and does.  I have reported to boards and been a member of boards and was surprised that I learned a few things.  Looking around the room I could see this was true of many others.   Jim shared his belief that boards are often not used or managed correctly by chief executives when it comes to developing organizational strategy (or in general). 

The panel discussed questions ranging from the difference in multiple owner boards and single owner boards to strategies for educating and cross-educating (for systems with multiple boards) board members.  One opportunity identified and discussed by the panelists is for Alliance members to use each other, and potentially board members, as resources and commented on the positive results and contributions that have come from these relationships. 

 

Strategic planning for the rest of us

Wrapping up the first day, Nancy Wise (Spring Street Exchange) discussed “Strategic planning for the rest of us.”  According to Nancy, there has historically been little to no meaningful differentiation between health care providers and payers.  Everyone more or less chases the same value proposition and competition centers around scale, operational excellence, brand, provider reputation and so forth.  It follows that the role of strategy (at least with respect to other industries with functioning markets) inside a health care shop is very operational in nature: hospitals have traditionally had “planning” departments.  She sees this changing, and a need for it to change even more rapidly.  Competition will force health care providers and payers to identify and select dimensions that they will compete on, and geographies where they will compete in more focused ways.  Nancy also shared a strategy framework called scenario planning and led the group through an exercise. 

 

As I listened to each speaker I reflected on the fact that our member plans have a different raison d’etre or reason to exist.  Some primarily serve to channel patients to the system.  Some serve very narrow niche markets.  Some serve as financing vehicles for underserved or economically disadvantaged populations.  Others function more independently to compete and generate margin.  Common to all is a pride in delivering high quality service and a commitment to seeing the clinical needs of their members met.  I can clearly see the quandary many of our leaders face.  Scale matters in the health plan business, it really matters.  But achieving scale in most markets requires serving different segments with different offerings, having selected certain “things” to be great at (how one will win over competing options). 

Are there ways the Alliance can bring our members together to achieve the benefits of scale, and keep their differentiated strategic and business models in their markets?  That is something I will be reflecting on in the coming months.  Please feel free to reach out with your comments and suggestions. 

 

Read the day 2 and 3 recap



TIP: You can also access all the event presentations from the documents tab on the Spring Leadership Forum event page and in the Alliance Knowledge CenterSM.


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