CareTalk Podcast @ HLTH 2021 – Pat Geraghty on Navigating ACA Marketplaces: FL Blue is There for You

Guidewell’s CEO is boldly leading Florida’s biggest health plan through the pandemic. The mission-oriented company has been all-in on the ACA marketplaces and championing social justice. He’s not afraid to speak his mind on common sense drug pricing either.

David Williams:

Welcome to CareTalk, America’s home for incisive debate about healthcare business and policy. I’m David Williams, President of health business group.

John Driscoll:

And I’m John Driscoll, the CEO of CareCentrix. David, who do we have right now?

David Williams:

Well, John we’re at Health 2021. We’re doing a series of podcasts here and the good news about being at Health, as opposed to just wandering down the street is, you have some big folks here, like CEOs of major organizations. In this case, we have Pat Geraghty. He is the leader of Florida Blue and GuideWell. So we are in a good spot today.

John Driscoll:

Well welcome, Pat, can you tell us a little bit about how big is Florida Blue and what is GuideWell because you actually have two titles there. How should we think about that?

Pat Geraghty:

Well, first of all, thank you David and John. Happy to be with both of you today. Yeah, GuideWell is the holding company and it sits over the top of Florida Blue, which is the 78 year old BlueCross Blue Shield plan in the state of Florida. But we have six other businesses that all sit under GuideWell as the holding company. And it’s a mutual insurance holding company. But over the 10 years I’ve been there, we moved from being an $8 billion business to now we’re just shy of $21 billion business, and we’re doing business in 45 states. So, we are a sizable undertaking at this point.

David Williams:

So you’re obviously a very big organization, but also I think difference in terms of culture and mission from some of the big sort of for-profit plans that are out there. Do you have a distinctive role or is it just you just kind of one among many out there?

Pat Geraghty:

David, we think we have a very distinctive role. As a matter of fact, we have doubled down on being local. So we divide Florida now into nine different regions. Sub-regions if you will. And we are very, very locally oriented.

So what does that mean? It means we understand the delivery system at an intimate level. We understand what’s happening in that community and we’re deeply engaged with the things that make a difference for the people we’re serving either by the ethnic makeup or the cultural norms in a given part of our state. So we’re not taking things at a [inaudible]. Health care is the same everywhere healthcare is intensely local.

John Driscoll:

So Pat maybe talk a little bit. Is it Sanitas? There’s a huge chunk of Florida is Spanish speaking and Latin culture. How did you adapt to that particular challenge? Because cultural relevance is essential to actually care.

Pat Geraghty:

Cultural relevance is incredibly essential to the right kinds of care. So in the issue that you’re discussing Sanita’s, they are based in South America. We connected with them and brought them to the United States to deliver healthcare in our state. I think is the first time it’s ever happened anywhere in the country. The first year of the ACA, we had three clinics open, got a small penetration of membership. Today, we have 250,000 members and over 30 medical groups with them across the state and we continue to grow.

John Driscoll:

How do you think about mission versus margin? I mean, you very early on jumped on the ACA and expanding healthcare, as part of… there were a lot of our colleagues who are CEOs, either pulled back or threatened to pull back or threatened to pull back and pulled back.

How did you come to the decision to lean into the ACA and what’s your experience?

Pat Geraghty:

You know, we’re a mission-based company. And so it is critical to our mission that we’re serving all parts of Florida. And so when we looked at the ACA, we said, we have to be in all 67 counties, all products, in order to fulfill against our mission. So we made a commitment to be all in for the ACA, and we understood that bill inside and out. That was the challenge. I mean, it’s a very complicated bill and to understand how to position your organization was quite an undertaking. Most of the players were in the first year in Florida. Players that I guess I’m allowed to name like United and Aetna and others, Cigna. They all left after one year, not having good experience there. Meanwhile, we grow. We grew repeatedly, so we have now about 1.2 million people that we serve in the ACA in Florida.

And so it was really critical to us that we understood them at a local level. We really understood what mattered to them. We worked through churches, community-based organizations. We really deeply embedded in our communities. And we’ve got these retail centers, which you may be aware of. So we’ve got almost 30 retail centers where people can access us face-to-face. I thought it was critical that we change who insurers were looked at. How are we engaging the community? So we moved from thinking of ourselves as an insurance company to, we think about ourselves as a health solutions company.

When you are right there in the community, and you’re face-to-face with your customer, you are taking on their challenges each and every day. So that was critical to us and making the shift to being a retail company from a B2B company, we really embedded ourselves in the urgency that it takes to be a great retail company. So I don’t compare myself against other blue plans. I don’t compare myself against other plans that are at other places in the country. I look to be the very best customer service organization for our customers. So we went to NPS scores and moving the dial on that and comparing ourselves to the very best service organizations we could find.

David Williams:

One of the contrast between this administration and the prior one was the way they see the ACA is actually something as a tool against COVID. There was a reopening of the marketplaces for the ACA to go back to the conversation before. You were, I think, a big proponent of that.

How did it actually work out? What did you see with the special open enrollment period for example?

Pat Geraghty:

You know, David, if I stepped back and say, did I think the ACA was the perfect bill? Absolutely not, but it’s the bill we have. We have all invested tremendous amounts of money in getting the ACA in place and making it work for our customers. So yeah, we saw open enrollment actually grow significantly over the course of the year. I think it was a safety net for people without the ACA, a lot of people would have been in trouble without coverage and very, very much at risk.

So we look at it as a bill that can be improved and should be improved over time. We advocate for things like we need to age adjust the subsidy inside the ACA, because we need healthier younger people to be in the pool. Everybody gets a benefit from healthier younger people in the pool. Older people get a lower premium because healthy young people come into the pool and government can do that. They can make a difference in how they do the subsidy, but they haven’t yet done that, but we continue to advocate for it.

John Driscoll:

How did you navigate Pat through the last year of COVID with all of the unpredictability of the virus? I mean, you’ve got to underwrite to an annual number. You’ve got federal regulations on one side around open enrollment and a local need to actually make sure that you’re sort of actuarially sound and you’ve got this really unpredictable virus. And the experience in Florida was very unpredictable as was the government’s response made it. It’s not uncomplicated.

Can you talk a little bit about how you navigated those challenges and what you did for patients?

Pat Geraghty:

You know, it was extraordinarily a complicated environment. In fact, in the first year 2020, we had a financial, if you will, advantage in that people were putting off care. So you had a lot less services happening and financially we were positioned to benefit from that. But as a mission-based company, it wasn’t our goal to benefit from that. So we gave back to customers, we cut premiums where we could, we actually extended credit to people. We had people that were being covered four and five months without having paid their premium to us.

Now in the ACA, after 30 days, you can push the risk back to providers, but we didn’t do that. We said, no, we are going to foot that bill to the tune of about $75 million that we covered that could have ended up back on providers. We thought it was the right thing to do and we wanted to serve our customers in a way that we thought was appropriate. I think it also gave us a platform. When you take those kinds of positions, it gave you a platform to talk about wearing a mask, social distancing, cleaning your hands, and then vaccines.

So we’ve led an all out assault, if you will, organizing 135 CEO’s to take a position supporting masks and social distancing in the first wave and then supporting vaccines in the second wave. So we didn’t wait for other voices to be there. We’ve led that charge if you will. I think we earned that by being out there and contributing back to the community. The second part of that is this year, we actually, along with a lot of other people in our sector are getting hit hard and in Florida, very hard. So with the Delta variant and now services at facilities back to normal, you find that we’re having the short end of that financial stick. But you know what, as a mission-based organization, we can weather that and we’ll be back more into what I would call a normal cycle in 2022.

John Driscoll:

So in this political environment taking on that mask and vaccine mandate or mission couldn’t have been a casual discussion at the boardroom or a casual decision. How do you think about that in a relatively hostile Tallahassee and in other parts of the state when the state is actually really split pretty dramatically by county and state and different politicians. How do you think about that?

Pat Geraghty:

Well, one of the things I take pride in is that in the entire time that President Obama was in place, I was working between President Obama and Governor Rick Scott.

So we found a place to work with both parties and figure out how to do the best for our customers. We look at it and say, “How do we advance the ball for the people that we’re serving? How does our organization look like the people that we’re serving? How do we think about improving health and health quality in our state?” And we’ll work with anybody who’s willing to do that.

Now granted, there are very different views on some of these subjects, but mostly we have succeeded by being transparent by being candid, by having private conversations, to tell people where we’re going to differ with them, but not to avoid that dialogue, but actually to engage it.

John Driscoll:

Yeah you took the fight.

David Williams:

You know, one of the things that we talk a lot about on care talk is the role of the home. And you mentioning facilities being back to normal, you mentioning getting hit hard from a cost perspective now. What we’ve seen with COVID is an opportunity to make some changes, not just on tele-health, but also just the different site of care. How does the role of the home play in at Florida Blue and GuideWell more broadly, and how do you see that changing?

Pat Geraghty:

That’s an important part. And one of the things we did now almost five years ago was buy popHealth, which is an at-home service. So it takes care of critically ill people in their home setting. When you combine technology to bringing a clinician to the home setting. It was well-positioned to look at this movement to the home. So we were a bit ahead of the curve I would say in doing that. I think we were a bit ahead of the curve as well in buying new directions so that we now integrate behavioral health and physical health. So we’ve tried to anticipate, where is the next thing happening in healthcare? How do we get ahead of that? And how do we make sure that we’re serving our customers well? I think the move to home, the move to integrate behavioral health and physical health are all examples of trying to be ahead of that curve with our members and customers.

John Driscoll:

New directions is obviously the mental health/behavioral health organization. Historically most of the care has been really separated. You said physical versus mental. How do you pull that integration together? It was a big move for GuideWell and Florida blue. So clearly you have passion for it. We’re in the middle of a mental health crisis. How do you bring those two sides together?

Pat Geraghty:

You know, I think a lot of it is about education and awareness and it’s connecting what you know in that behavioral health space to your primary care delivery assets. Because the primary care is often the first person who’s going to see the early signs of what people need in the behavioral space. But they’re not often not well-trained, they’re not necessarily looking for the signs, but when you bring information and education to them, through our connection to new directions, we now have a better informed primary care physician.

And certainly where we have assets that we have control over, if you will like Sanitas and the other medical groups that we have on the line, like Florida healthcare plan and capital health care plan in those situations, we can do much better job of educating that frontline primary care provider so that they can signal to the behavioral health side and back and forth movement of information and to be proactive with our customers.

David Williams:

So you, so you’ve been ahead of the game on the idea of integration of behavioral and physical health, and, and now I’ve actually been implementing it. And as John mentioned, there’s this, you have this crisis of, of mental health right now. There’s also a tremendous crisis. There already was a crisis now it’s, I think almost impossible to find mental health provider for somebody. So it’s great to have the insight. It’s great to say, “We can make primary care work better and they can be the gateway” and so on. But what do you actually do when there aren’t any mental health professionals around?

Pat Geraghty:

Yeah, so the lack of mental health professionals is a serious issue and that’s one that doesn’t get solved overnight. But I think there’s also some ways of using technology that can help extend providers time and effort in the community. So one of the pickups we saw during the pandemic was virtual behavioral health. And that was widely accepted through our membership.

Particularly if somebody had an initial connection to a provider, they were very willing to be remote with that provider. So there’s some of those technology pieces, but I think there’s going to have to be a commitment to making sure we’ve got enough providers out there.

John Driscoll:

David, one of the things that Pat pointed out, just to give you one example primary care doctors who do not have psychiatry or psychiatric or behavioral as a primary boarded background are actually the most common prescribers of mental health meds. And so I do think there’s merit if you can integrate that information and really make it more liquid and provide them support because primary care providers are overwhelmed that they are the first barrier or bridge to people getting better.

And you’re seeing you see it in the prescribing patterns. So I do think that’s… because we can’t, we can’t manufacture psychiatrists and psych social workers fast enough.

David Williams:

There’s no doubt about it, John. I think also from the primary care provider standpoint, which is also hard to get into, there’s a lot of people that are there and there’s an underlying issue as depression, as opposed to something else that they might prescribe for. So it’s really helpful to have it. And I’m just thinking about how do you actually make it happen because the sort of the remote visit is one thing. But unless you use some sort of technology, some kind of a multiplier, I don’t see how you, you serve the demand.

John Driscoll:

Well, you are in the people’s Republic of Massachusetts. That’s where you live, which has the highest number of psychiatrists per capita in the country. And the longest wait times. So Pat, is it possible? You’ll start to participate in the Massachusetts market?

Pat Geraghty:

I think that last statement was made by John and let’s make this clear. I just want to say that’s John.

John Driscoll:

…that the record show.

Pat Geraghty:

That the record show. Massachusetts is not part of my territory and I don’t intend to be in the Massachusetts marketplace, but I think what we’re really touching on here is really the reinvention of the entire system, right?

So primary cares have to have a team of extenders. You want to have community health workers. You want to have nurses. You want to have pharmacists. You want to have lots of people that are engaged in the primary care continuum, so that primary cares can do the more involved parts of the of their role. And so that’s a piece of then the behavioral health piece that comes out of it. So it really is reinventing how we think about care and prevention.

John Driscoll:

Do you think that you will, like some of the larger players buy and build like United doing as many Primary care doctors as you can? I mean, they’re vacuuming up primary care practices around the country. Is that…

David Williams:

John, let me here. I want to hear John’s sound effect for the vacuum. Our sound engineers. I have to give them a warning here. It’s coming.

John Driscoll:

But Pat, is that a sustainable or a smart strategy for health insurers?

Pat Geraghty:

So we obviously are growing our connection with Sanitas. That’s a large medical practice that we have a big investment in, and we’re going to continue to grow that. I think it’s going to be important for us to have that as a counterbalance to what we find in the broader marketplace. There are still going to be players that we can work with, but we won when we have what we built around Sanitas it is differentiating and it is a benchmark. And so if we can’t get that on the outside, we’ll continue to grow what we’re doing on the inside. But I think there are going to be opportunities to work with other players in the market.

David Williams:

So Pat you’ve handled all of these controversial issues with such a plum that it makes me want to ask something. That’s not on our preparation, which is how about drug prices, anything to say about that?

Pat Geraghty:

How about drug prices? Look you know, I happen to believe that we for the longest time now have not allowed our Medicare program to negotiate for price. I do think that has to happen. I think pharmaceuticals are going to have a new day in front of them when we’re talking about real negotiation on price.

I happen to believe that some of the proposals that were out there last year, that looked at comparing pricing to some of the Pharm prices. Those things have to happen. I mean, they have to happen because the marketplace is out of whack on pharmaceutical pricing. And so I think those types of approaches are coming and they’re real.

John Driscoll:

We welcome that. We’ve been pounding on Big Pharma and their ability to price at will with some regularity on this show. So Pat, I’m glad you’re joining the fight with us because even having help lead a PBM, I realized that you cannot negotiate with one hand tied behind your back, where they can improve. You just increase the price at will a couple of times a year it’s extremely hard. And I think we’ve reached that point. So, David, I think with that, we should wrap. We’ve got an ally to our cause.

David Williams:

I think, I think it’s right. Well, Pat Garaghty, President and CEO of GuideWell and Florida Blue. Thank you very much for joining us here at the Health 2021 for our CareTalk podcast. I’m David Williams, president of Health Business Group.

John Driscoll:

And I’m John Driscoll,the CEO of CareCentrix. Please subscribe to CareTalk. And Patrick and thank you for joining us.

Pat Geraghty:

Thank you. Appreciate it.