Speaker 0: 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.

Speaker 1: Hello, everyone, and welcome to the Becker's Healthcare podcast. I'm Scott King. Thrilled today to be joined by a very special guest, Eric c Hunter, president and chief executive officer over at CareOregon. Eric, how are you doing? Thanks so much for joining us.

Appreciate you.

Speaker 2: I'm doing great, Scott. Thank you for having me on. Appreciate it.

Speaker 1: Of course. And look. We have a lot of big topics in in health care and, you know, with health plans to get to. But before I do that, I was wondering if you could just please tell us a little bit about your, your background and your career journey.

Speaker 2: Sure. My, my career started in an odd way as a petroleum engineering major in Tulsa, Oklahoma back in the eighties. Not the best career choice with what happened to the industry. So and played with politics for a while, ended up working for a governor in or in Oklahoma, and that governor implemented Medicaid managed care. And so working with him on that and then later the state agency that stood it up is how I got into the health care business from petroleum engineering.

I've done stints at national entities, Shower Anderson. I was in multiple states with Shower Anderson. Aetna purchased them years ago, did a stint at Centene for a couple of years, was a market leader, for value options behavioral health care in Illinois and in Texas. Then before here, I was the chief operations officer at Boston Medical Center Health Net Plan, which is now Wellsys Health Plan. And ten years ago, I was privileged to be, recruited and signed to come to CareOregon where I where I am, and I'm loving loving the work we do.

Speaker 1: Yeah. Appreciate you sharing all that background info. You certainly had a a lot of unique experience that helps you give a a unique perspective on everything going on. So the first topic I wanna get to, Eric, is how are your relationships with providers changing as both sides face cost pressure and workforce shortages?

Speaker 2: I think for everyone, there are there are new challenges. But for us, it's more acute because CareOregon was started thirty two years ago now by provider organizations, local safety net community organizations, FQHCs, teaching hospital. And so we've typically been provider centric in everything we do. But this this new reality has forced us to have to make tough choices. And you talk about changing that relationship so that it it really is more about, enabling each other, empowering each other to do more with less, coordinating care more efficiently, aligning payment methodologies with quality and performance, not just widgets and moving revenue around, to support the providers in the core.

So, that's really been the big change is that we've had to think less about codependency and more about, aligning better to get much greater quality and and performance so that we can serve more people.

Speaker 1: Eric, does it also just kind of start with, you know, in a general sense that both payers and providers are both up against so much now and certainly in terms of, of regulatory matters? Is it is it just kind of understanding where each site is right now and and the difficulties they're facing?

Speaker 2: I think one of the challenges is finding ways to identify where those barriers can be broken down. Because even when we talk about regulatory matters, there are a lot of things we have in common with the providers, and how states and the regulatory agencies deal with matters of merger and acquisition or ownership or staffing. You know, those kind of pressures, hit us both because they add sort of undue pressures on the delivery of care and then increase costs across the board, which is then feed up into, ultimately, the Medicaid business, greater state spending. And so how do you manage all that and make sure that everyone understands the implications of right minded thought processes, you know, protecting the public dollar, protecting members. But at the end of the day, everything has to fit together so that it's all sustainable.

And that's the challenge we have when we have to work together to solve some of that.

Speaker 1: Where do you see the biggest gap today between payer strategy and operational execution?

Speaker 2: For for plans particularly about the size of CareOregon, we're not small by any means, but we're not a big national either. It's it's really that gap between the ambition we have for what we wanna do to transform the system fundamentally and the infrastructure to do that, to pull that off, whether it's, the work we can do with with AI, to reduce administrative burdens or the creativity necessary to manage the data around true total cost of care or value based contract agreements that take into consideration not just the numbers of services provided, but, the quality of those services, the outcomes of those services, and tying all that in ways that everyone can see it and believe the numbers and coordinate on them. I think those are those are the big gaps. So they're really about the infrastructure being designed and built and pushed out so that everyone has visibility into what's happening.

Speaker 1: What's one investment or initiative you believe will most reshape how health plans operate over the next two to three years, you think?

Speaker 2: I think when talking about how the system needs to manage, really, again, AI comes into play. And not necessarily to replace human beings, but to augment the work that people are doing either at the payer or at the provider. How do we leverage data and information so that people are empowered to identify ways to engage patients and members better to, be more efficient in how we work with them to get the information we need at the right time to the right people. It's not it's not cheap to develop those systems. There are a lot of vendors that they can say they can do it easily, but even those folks are gonna cost you a pretty penny.

And right now, the resources are pretty scarce. So being able to make the investment to move forward on that front, means we have to be that much more efficient in the work we're doing now and maybe even cut some cut some corners.

Speaker 1: If you could change one regulatory or industry practice tomorrow to improve affordability and access, what would it be and why?

Speaker 2: I believe to improve, affordable and access from a from a rule standpoint, it really is about how how states again see their role as the protector of of commerce, of industry, of of, you know, public benefit with the need to micromanage industries they don't understand and put hurdles in front of us that that makes it more difficult to do the work, particularly in tough times. For instance, you know, merger and acquisition laws, certificates of need laws, staffing rules. A lot of those things are are well meaning and well intentioned, but they they they reduce the ability of the providers and the payers to actually do the work they need to do to serve the patients. And and being able to take a step back from that, collectively and working with the states, would be really, really critical to being able to make this work long term.

Speaker 1: Yeah. That's interesting. So a lot of those those rules in place actually kinda get in the way of, payers and providers reaching an agreement, and then now you're you're kinda have to look for certain workarounds. Is that basically what you're saying, Eric?

Speaker 2: That is. There there are times when, you're required to make a certain payment level or hire certain staffing levels at the provider level. That means they need more people. They need more revenue from the payers to do that work. You know, where's the is there value in that to the care the members receive, or is it because someone feels better because those positions exist or they think there's better work when it could be about efficiencies and technology and and policies that really drives the work instead.

Some of the mergers and acquisition rules, some of the corporate practices of medicine rules that can be overreaching and impact abilities of providers and payers to work together, to find value based solutions. But there's forced separation, that that really is less about the effect efficacy of doing the work and and more about the appearance of impropriety. You know, hold folks accountable, hammer them if they do wrong, but but give the industry the the flexibility to do what we need to do to make it work.

Speaker 1: What issue is putting the most pressure on health system margins right now, and

Speaker 2: and how are you responding differently or or going to respond differently in as 2026 plays out? With the bulk of CareOregon's work being in the Medicaid space, it really is the the clash of intentional utilization increases for some areas, particularly in behavioral health, substance use disorder treatment. Those are those are critical crises in our communities right now. We have to fund and provide services for those services, but the rates that we're paid to manage them aren't keeping up. The coordinated care model in Oregon, received a pretty hefty rate increase for 2026 that still doesn't necessarily cover the costs of implemented rate increases and access and capacity increases that have people actually getting in for care they need, but it's not sustainable unless we find that right balance.

And so that's really, for us, the greatest pressure on our margins is there's only so much we can do administratively or operationally if we're paying out a dollar and 10¢ for every dollar we get in in rates. So that's really the the challenge we have right now is the right sizing the rates with the benefits provided so that we can actually provide quality care.

Speaker 1: And the last question I wanted to ask you, Eric, you know, now certainly more than ever, the right kind of leadership, the strong leadership is needed in health care. So I just wanted to ask you, you know, the course of your career and up to now, how is how have you evolved as a leader?

Speaker 2: You know, that that's a great question. I believe that coming from an engineering background, I was about policy and procedure, nuts and bolts, blocking and tackling as the the key to success. Now there's there's much more nuance required. There are much more much more opportunity to trade off and to bargain and to negotiate, bringing the best people, the best minds into the room, and finding solution that that truly is a win win. It's not a competitive business.

I don't know that that Medicaid managed care in particular should be a competitive or profit business anyway. But, but looking at it as a partnership with the provider systems and the states, the hospitals and the nurses associations to say, collectively, with find common ground and build sustainable structures that can weather these storms that are happening now. And so a lot of my career has been less about managing direct care and more about convening folks together, creating entities and organizations and alliances that are gonna move the needle. And that that's where I spend a lot of my time these days.

Speaker 1: Well, Eric, thanks so much for sharing your insight and perspectives and and joining the podcast. We're really looking forward to having you speak at the spring payer issues roundtable. So, looking forward to that, and and thanks so much.

Speaker 2: Thank you, Scott. Looking forward to it.