This is where health insurance leadership comes together.
Becker's fourth annual spring payer issues roundtable brings
together over 400 payer and health plan executives
and more than 100 speakers to Chicago April.
This year's event includes keynote conversations with the
industry's top leaders and former president George W.
Bush. For the full agenda and event details,
visit beckershospitalreview.com
and click on the events tab in the
upper right. We're looking forward to hosting you
here in Chicago.
Hello, everyone, and welcome to Becker's Health Care
Podcast. I'm Scott King, thrilled today to be
joined by Rob Hitchcock, president and chief executive
officer of SelectHealth. Rob, how are you? Thanks
so much for joining us.
I'm good. Thank you very much. It's a
pleasure to be here. Of course. Yeah. I
know I know we have a lot of
of big topics,
in health care, especially with health plans to
get to. But before we jump into the
the topic, can you please just kinda tell
us a little bit about your your background
and your career journey?
Sure.
I, I'm currently the president and CEO of
SelectHealth as you as you said. I've been
a a health insurance executive for,
many years. Been with companies like Humana and
Centene and some of the Blues plants.
Moved out to Salt Lake about three and
a half years ago and have been the
CEO of SelectHealth for about three years now.
And, what's interesting about SelectHealth is it's it's
a little different than the the national players
in that it's owned by Intermountain Health. So
SelectHealth is a wholly owned
subsidiary of Intermountain Health,
and, so we're what's known as a community
health plan or a provider owned health plan,
which which makes us unique
in the ecosystem of health insurers. And,
I can say it's just been a pleasure
to be part of an organization like that.
Thanks thanks a lot for the background and
further, Rob. Yeah. Certainly a a unique position
to be in
in this space. And let me ask you,
getting on the first topic, how are your
relationships with providers changing as both sides face
cost pressure and workforce shortages?
That's a great question. I you know, being
a provider owned health plan has put us
in a unique situation where our default
as a health plan at SelectHealth is to
work very closely with providers. And so,
we were founded in 1983,
so we've been operational now for about forty
three years and in our forty three year
journey,
our first thought is how do we work
very closely with our providers
and how do we take care of our
providers and how do we work collaboratively
with them. And so,
from that perspective, I do appreciate that there's
a lot of cost pressures, not only for
health plans but for our physician and hospital
providers as well. And I have a great
amount of appreciation for that. But
I also think that the way that we
work
together with providers and with hospitals is together
rather than as,
I call it the enmity model
where each side is just trying to protect
their own interests.
And so we kind of default to that.
I think a great example of that is
something that we all had to live through,
especially providers,
was the change healthcare,
incident that happened a little over a year
ago.
And the way we handled that was we
were getting a lot of outreach from our
provider partners saying, hey, look, I'm in danger
of not being able to make payroll
because I'm not I'm not getting my claims
paid due to this this issue with Change
Healthcare. And so what we did is we
advanced
money to our provider partners so that they
can make payroll, keep the doors open,
and
we were a little nervous about that. We
felt it was the right thing to do,
but we're a little nervous because we weren't
sure
that that money was gonna be paid back.
And in reality, what happened was all that
money was paid back.
And
our our relationships with the providers, although I
I would like to think was good before
that, was even better after that.
And so I think
I think we've always defaulted to that. But
the other thing I would say is
the way we get through these cost pressures
that we're that everybody's facing
is is, again, we have to do that
together. And I think that's gonna require a
lot of operational
changes.
And the only way that that can be
done, I think, is working together and being
collaborative and
just being open and honest with each other,
which I think
in a lot of ways in the industry
doesn't happen very often.
And so that's what we're focused on is
really how do we how do we be
open? How do we be have authentic conversations
with our provider partners? And how do we
work through these challenges together rather than
rather than independently?
Yeah. You know, it doesn't happen very often,
Rob, and and hopefully, you'll start to see
more. But I I think that was a
great example of, you know, reaching across the
aisle, so to speak, and advancing those funds.
And I'm glad to see they Yeah. Got
paid back. But, yeah, just a great example
of kinda going out of your way to
make sure everyone can can work together effectively.
What do you what do you see the
biggest gap today?
Excuse me. Where do you see the biggest
gap today between
payer strategy
and operational execution?
Well, I think I think there's a few
things. One is,
oh, there's a lot of external pressures, I
think, on health plans today. And
the one example
I'll I'll give you on that is some
there's a lot of regulatory
pressures that are that are put on us,
and I think regulatory
changes and and,
are always
have positive intent behind them,
but it it does put some pressure. The
greatest example is on our individual product.
The federal government through
the one big beautiful bill actually increased premium
taxes. So for SelectHealth, that impact was about
$14,000,000
a year.
And that puts enormous pressure on us
to keep premiums low
and to benefit our communities that we serve.
So that's that's something that we're always cognizant
of of the regulatory changes that are that
are happening.
I think also our
our ability to change and to adapt, and
and let's face it, with the the changes
in the in the one big beautiful bill
or HR one, I'm not sure what people
are calling it, but,
that I think has changed
a lot of realities for people, not just
on the health plan side, but
for providers as well. I mean, when you
take a trillion dollars out of the healthcare
industry through specifically on the Medicaid side,
that changes things. And and I think from
an operational perspective,
what we're gonna have to become very good
at, and again, I think this goes back
to working with our our hospital partners and
our physician partners is, okay. Well, when you
when you take a trillion dollars out of
the ecosystem,
what do we have to do differently?
And and I think we are all going
to be doing things differently. And I think
I think some of the different changes that
are gonna happen
from the hospitals, from the physicians, and even
the health plans
is gonna be,
I think it's gonna be significant.
And so how do you how do you
do that? How do you change that? How
do you change your mindset? How do you
change the culture of
American,
the way health care is delivered in America?
And and to me, that's that's the biggest
challenge we got coming up in the next,
I would say, three to five years,
is how do you change the mindset of
how health care is delivered?
How do you how do you operate in
a in a in an environment where where
revenue has been decreased by such a significant
amount?
Those are really difficult challenges.
Well, that that's incredibly interesting thoughts there, Rob.
Let me let me ask you about that.
What do you think the first step is
towards changing that mindset? What do you think
that would be?
Well, if you think if you think about
the I I reference culture of of how
health care is delivered in America. The the
culture is and and this is a bit
of a history lesson, so, you know, forgive
me. This is not my personal opinions. This
is kinda just reality.
But
America,
back in the early foundations of the country,
decided that healthcare was a purchased service.
That the only way that an American can
get healthcare is if you purchase that service,
right or wrong.
And so I think the mentality
of of hospitals with physicians
and even health plans is that, okay. Well,
that we're gonna do this pay for services
or fee for service environment. You know? You
you get a
a procedure done or or a visit to
the physician that you have to you have
to pay for that, and you pay for
that on a on a on a on
a, you know, as incurred basis, so to
speak.
I think when you take a trillion dollars
out of Medicaid,
that mindset has to change.
And that means that you have to start
the way you treat
a Medicaid patient or a Medicare patient or
a commercial patient may may change.
So if if I'm a physician and you
think about physicians and how they think, they're
they're like, well, I'm gonna treat every patient
the same.
Well, that may not be
that may you may not be able to
do that
going forward. Right? You you may have to
change
how you treat a Medicaid patient, how you
treat a Medicare patient, how you treat a
commercial payment, and even the site of care.
So perhaps
a Medicaid patient is is not treated in
a hospital. Perhaps there's an alternative site where
a Medicaid patient receives care.
And and by the way, I know I'm
I'm saying some things that might, be disagreeable
to some folks, but I think that is
the reality.
And I think that is what providers are
struggling with and even what health plans are
are struggling with. It's like, if my reimbursement
on Medicaid is going down so dramatically,
how then do I change the delivery of
health care
to that population so that they still are
able to get the services they need, that
they're still able to live a healthy lifestyle,
but I do it in a way that
is 50%
less
expensive than it is today?
And and by the way, I don't have
the answers to that, which I think the
important thing is is that health plans and
providers, physicians and hospitals
have to work together to redefine that.
And I think even government is gonna have
to be involved in this. Because,
for example, if I'm successful at really reducing,
the cost of delivering care to a Medicaid
recipient,
either through reducing utilization or through working very
collaboratively
with
a provider partner, the government
should not,
punish me
for doing the right thing. So in other
words, if I really do that and I
really reduce the cost,
government is gonna have the tendency to come
and say, well, okay. Well, you've reduced that
cost, so I'm gonna reduce your re reimbursement
even more.
That can't happen.
You have to be able to reward health
plans and providers and hospitals for for doing
the right thing,
for reducing the cost, for keeping people healthy,
and not
strip them of their ability to to make
a living.
And I think that's gonna be very tempting
for government to do. And so I think
I think we're gonna have to work very
collaboratively, not just with our provider partners, and
I I say that term generically, but our
physician partners and our hospital partners, but also
with government agencies
and entities to say, hey, look,
We're we're gonna try to do the right
thing here, but you can't punish us for
doing that.
No. Absolutely. I think a lot of people
would certainly agree with that, Rob. And let
me ask you, what's one investment or initiative
you believe will most reshape how health plans
operate over the next two to three years?
I I think I think it is this
concept
of,
of culture.
And and I I use that term a
little bit loosely. But the culture of of
the way medicine is delivered in America is
is this concept of if I provide more
services, then I get paid more.
And that just that just has to change.
And what what's interesting about it is I
you know, I've been in this business for
a long time, and I I would say
that I've been I've been working on you
know, at Intermountain and SelectHealth, we call it
proactive care, but the industry calls it value
based care. So so I'll just use the
term proactive care.
I've been working on this for twenty five
years of my career. Kid you not. So
but I think now it it it there
is no other option. We have to figure
out a way
where you change the culture of of the
American the way America delivers health care to
say
that less is more, not more is more.
So how do we keep people healthy? How
do we keep them out of the hospital?
How do we
deliver services, health care services,
culture to home rather than in a bricks
and mortar setting?
And how do we do that in
a way
that's effectual,
maintains quality,
and improves the health
of the members and patients that we serve.
I think that is the biggest
challenge that we're gonna have as as an
industry.
And there's no way we get through that
unless we we figure that out
together.
Along the lines of changing the culture, if
you could change one
regulatory or industry practice tomorrow to improve affordability
and access,
what would it be and why?
Well, to me, you know,
not Medicaid is not only under the on
the the spot
light, but Medicare and Medicare Advantage is under
the spotlight. And
to me, the way the way health plans
are reimbursed on risk on this risk adjustment
basis is is just a fascinating thing. I
think initially when
when CMS came out with a risk adjustment
model, I I can't remember when I was
I think it was, like, 02/1934,
somewhere around there. Is there early two thousands
where they changed that?
Again, I think the intent was very positive.
I think it's become this
this this
process whereby
health plans are encouraged to to make sure
they capture all these codes, and there's really
not a quality or a outcome,
measure that's tied to that. And so I
think risk adjustment has has gotten to a
point where it was never the intent.
The the way it's operating now was never
the intent of how it should operate. And
so
what what we're trying to do is we're
trying to work with CMS and and some
really thoughtful people to say, how how can
our risk adjustment
the way we get paid for Medicare Advantage,
how can that
how can that be changed so that that
that we are we are paid
in a way
that encourages,
us to make sure that members and patients
are healthier,
not paid on a on a basis of
how many services that they get. Because, again,
I think it's this culture of America where
less is more rather than more is more.
And then and so so then how do
we work with a government entity like CMS
to say, how do we get paid
for making sure that that that that patients
and citizens of this country actually get the
appropriate service at the appropriate setting. And that
mean may mean that they get they get
less services, but it's it's more effectual and
it's more, timely. And it's
the outcomes
are better rather
than this kind of focus on
generating more services,
if that makes sense. So I think if
there's one thing I could change, and we're
trying to change that, is how
how do we make sure
we're we're paid in a more efficient, more
effective way than what the current risk adjustment
process is,
with Medicare.
And the last question I have for you,
Rob, what issue is putting the most pressure
on health plan margins right now,
and how are you gonna respond differently in
2026?
I I I'm gonna say three. One is
is the regulatory pressures are real. They've always
been real.
So that's one. And I use one example
on the premium tax going up.
I think our
pharmacy spend is just out of control.
I think we're the only country in the
world or one of
one or two countries in the world that
do direct to consumer marketing,
and that just creates this perverse incentive. So
even though that you know, CMS today has
done some wonderful things on negotiating drug prices,
drug prices are still going up.
And not just going up, but going up
in a dramatic way. We got to get
control of that. We got to figure that
out. It's just unsustainable.
And then I think the other thing is
behavioral health.
On the one hand,
the pandemic was wonderful because I think it
destigmatized
mental health. And I think that's a wonderful
thing.
But behavioral health spend
and is really,
is really out of control as well. And
so we have to figure out how do
we get people the help that they need
because mental health is just so important.
But how do we do that in a
in an affordable way and in a way
that, again, that gets the patients and the
members the the help that they need, but
in a more affordable way?
Rob, thanks so much for joining us on
the podcast and for a great conversation. Look
forward to you speaking with us at the
April event. Yeah. Thank you so much. Appreciate
it.