Key Takeaway: The strategic affiliation between Blue Cross of North Carolina and Cambia is designed to improve quality and lower cost for more than 6 million members of both organizations.
Patrick Conway, MD, president and CEO of Blue Cross and Blue Shield of North Carolina, is preparing to take on yet another leadership role: CEO of Portland, Oregon-based company Cambia Health Solutions. The union is not a merger but, rather, a “strategic affiliation.” Cambia CEO Mark Ganz will be the executive chairman of a combined board of directors made up of 10 members from Blue Cross’s current board of trustees and nine members from Cambia’s current board, but Blue Cross will retain its own separate board of trustees, and each company will keep their corporate structures and existing names, as well as separate assets, capital and revenues. Cambia covers 2.6 million members in Oregon, Washington, Idaho and Utah, while Blue Cross services more than 3.7 million members.
The two organizations teamed up in 2016 on a venture capital fund, Echo Health Ventures, that currently invests in more than 20 companies related to transforming healthcare delivery and improving the quality of care.
Conway is a practicing pediatrician who has worked in both the private sector and government (directing the Center for Medicare and Medicaid Innovation from 2011 to 2017, among other roles).
At the Health Evolution Summit, he sat down with Health Evolution Chairman David Brailer, for a one-on-one conversation about how the new collaboration can help the organizations leverage their assets to speed transformation.
Brailer: What can you do differently together that is harder to do alone?
Conway: I’m a practicing pediatrician. I worked in the hospital last weekend. I see patients and families that fall through the cracks. I had a child who had multiple chronic conditions. People couldn’t figure out home health care on a weekend. I took care of a kid with food insecurity, failure to thrive, not enough food. We spent $40,000 on hospitalization. We could have fed that kid for years. I tell those stories because it’s all about how we reorient the system. Cambia and Blue Cross North Carolina, we’re very aligned that our system must change, must change faster. It’s all about better quality, lower costs, exceptional experience. So that’s what we’ll work on.
Brailer: It’s really amazing as clinicians, with just a few gestures of a pen, we can spend so much money and we’re captive of that. But yet on the other end, we still don’t have all the tools to be able to stop from being in that situation for our patients.
Conway: We are making a lot of investments in technology and new companies to get physicians, clinicians and patients, the right information at the point of care, at the point of decision, so they make those better, higher value decisions.
Brailer: You were in the private sector and you went to government and then you came back out. What did you learn in the private sector that you took to the government as a major influential policymaker?
Conway: On the private sector side, I think you can move faster. With less bureaucratic hurdles, I think you can test and innovate much quicker. The public sector, I loved my time, both times I was in the public sector in the Bush administration and the Obama Administration. The scale is amazing: 130 plus million Americans. I actually think managing the public sector’s harder than the private sector.
Brailer: Can you talk about the forces, the things that you see going on in the market that makes this collaboration make sense?
Conway: The Blues insure about 105 million Americans. We all invest in the same things. We all invest in data and analytics, customer service experience, claims platforms. We think this affiliation will allow us to really drive change much faster together. Everyone’s after better care, lower costs, exceptional experience—the Triple Aim. What’s different about us? We have 87% value based [payment] today, but it’s usually on the margin. These are really advanced alternative payment models. It’s bold goals and change.
The third thing that we’re doing that I think is a little different, we’re doing it through partnerships. Cambia is obviously the biggest partnership model, but we also announced a partnership with Iora and Caremore and CityBlock, delivering primary care in North Carolina. In data analytics, we’re partnering with [analytics company] Nuna to drive value-based platform.
We don’t have to build it all ourselves. We’re partnering with entrepreneurial companies and driving change for the people we serve.