Blue Shield of California's president and CEO, Paul Markovich, told Health Payer Specialist that California's health insurance market is like no other in the country. "Everybody is here. Every publicly-traded company is competing here, the startups are here. Kaiser, which has a predominant footprint, is here. There are markets where people have concern there is not enough competition; California is not one of those places."
In a wide-ranging interview published March 2, Markovich discussed a wide range of topics including Medicare-for-all, universal coverage, his journey from North Dakota - where he grew up - to California, and how Blue Shield has grown its membership more than 50 percent since he became CEO in 2013.
HPS: Let’s say the ACA does get struck down and Bernie Sanders is elected President. Do you think Medicare-For-All has a chance of becoming law?
Paul Markovich: I don’t think there’s any way the specific proposals of Bernie Sanders have any chance of being the law of the land. I don’t think that’s because we shouldn’t have a debate about a government-run healthcare system – we should. There’s enough of a passionate minority of people who feel strongly about it, that as part of our democratic process we should have that conversation. But we should just have a proposal with some level of feasibility to it. It’s not just a $30 trillion spend; it’s like putting gasoline on a fire. Moving to a purely fee-for-service system with no co-payments, that is highly inflationary. Pay-for-value with some cost-sharing for consumers are important levers to help manage the utilization of healthcare services and the healthcare cost trend. That doesn’t mean there couldn’t be some other proposal for a government-run system, but I think the specific proposal from Bernie Sanders is dead on arrival.
HPS: You mentioned before the desire to get universal coverage achieved, and (California) Gov. Gavin Newsom has been pushing toward that by examining potentially a single-payer or similar system in the state. Are you comfortable with that notion, or is it too soon to tell?
Paul Markovich: All the steps the governor has taken so far have been terrific…he clearly sees healthcare as being critical, not just for Californians, but for the long-term health of the budget. He’s been aggressive with taking steps such as expanding the subsidies, he talked about an Office of Affordability, which I think has great promise. He’s engaged and driving toward solutions. So far in terms of his concrete stuff, he’s been doing a great job. But when it comes to single-payer, we don’t have bumper sticker debates here about healthcare. You can describe Medicare in our country as a single-payer system for those people over the age of 65, and yet you have publicly-traded healthcare CEOs talking in their earnings calls about how great Medicare is. So, I think you have to be careful whether you’re for or against single-payer. When Mitch McConnell says we’re going to have “European healthcare,” there is no such thing. Every nation in Europe has a different system. We have a tendency to boil things down to a single slogan, like “repeal and replace” or “single-payer.” We’re not for or against repeal and replace or for or against single-payer. We’re for smart health policies that serve our mission that gets us to universal health coverage in a highly affordable system. As long as it does that, we support it. Otherwise, we’re going to call it a bad idea.
HPS: I want to talk about your commercial enrollment. It’s gone up about 50% during your tenure. I wanted to get an idea of how that was accomplished. Was it marketing or organic growth?
Paul Markovich: It’s been a combination of organic growth and inorganic growth. We acquired Care1st, a Medicaid plan, and we had about 400,000 members that came from that. We also got very good growth from the Affordable Care Act. We set up our entire network to function under the Affordable Care Act (mandates), and we set up our operations to be ready for that, and we had a pretty big bump up in the individual market. But we also have seen a bump up in Medicare and large group commercial as well. So, it hasn’t been limited to just that Medicaid acquisition and individual. It has been spread. We have been working with accountable care organizations as well. We started our first such partnership in 2010, and we started a network exclusively to work with these partnerships, and they have performed at a terrific level. The annual compound healthcare cost growth with these providers has been 2.5% for nearly a decade, versus around 6% for everyone else.
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