Straight from the CEO: Progress with Purpose

• By:  David Holmberg
• Posted:  May 25, 2017
•   Share This

In May of 2014, Highmark Health’s board of directors asked me to take on the role of CEO and lead our organization in a new direction. They felt that with the right leadership and long-term strategy, our highly talented people could successfully confront not just the organization’s challenges but the challenges plaguing the U.S. health care system in general.

The last three years have gone by in a flash. Every day is unique. But every day I see how our actions and decisions impact real lives — from health plan members and Allegheny Health Network (AHN) patients to the many businesses and more than 50 million Americans served by Highmark Health companies.

I don’t see the pace slowing down any time soon — but I want to pause for a moment here at the three-year mark to share a few thoughts on the journey so far.

Committing to a Transformational Strategy

The U.S. health care system is too expensive — for individuals, for employers, and for the government and taxpayers. Access and outcomes are too inconsistent. And too much of the overall health care experience is driven by yesterday’s business investments and models instead of what consumers need today.

To get health care right, we believe it takes more than incremental improvements. That’s why we committed ourselves to a transformational strategy to reinvent health care delivery and financing and build a better, consumer-driven system.

A central principle of that strategy is that we base “better” on value — access, customer experience, quality, safety and affordability. In the volume-based transactional model still used by many other health systems, growth depends on filling more hospital beds and billing more services. That may boost a health system’s profits, but it doesn’t always provide value to the customer. It’s also one reason that the U.S. spends much more on health care than other countries without having better outcomes.

Value-based care drives our health plan’s True Performance reimbursement model, but it’s just as important in how we run AHN. If we maximized the use of hospital-based billing and did other things that volume-based health systems do, AHN would already be profitable. The path we’ve taken builds profitability more gradually, but it’s delivering value to customers at lower cost right now. With a value-based framework, we never forget that any extra cost in the system impacts all of us through higher premiums and taxes, and higher expenses to employers.

Another principle we set early on was that no one can transform health care alone. Wherever it can help our customers and improve the health care system, we have sought out and partnered with other innovative organizations. Most recently, that’s brought us together with Geisinger Health System. Other collaborators in getting health care right have included Lehigh Valley Health Network, Aledade, Axial, and Quartet.

Progress — and a Strong Foundation for the Future

We cannot serve our customers, or fulfill our promise to transform health care, without maintaining strong, stable business fundamentals. Our organization has done a remarkable job in that respect, despite standing up a new health care system, adapting to a volatile ACA marketplace (including political crossfire that cost us hundreds of millions of dollars), and other challenges.

You can get more details in our 2016 Annual Report, but to highlight a few indicators of our strategy’s success:

• Highmark Health has grown revenues three years in a row, including record operating revenues of $18.2 billion in 2016, and a $144 million improvement in excess of revenue over expenses in 2016
• AHN revenues have grown 30 percent since it formed — and operating losses dropped from $300+ million in 2014 to just $39 million in 2016
• Highmark’s health plan business improved operating gain by $680 million from 2015 to 2016
• HM Health Solutions increased revenues 34 percent from 2015 to 2016

Our fiscal strength allowed us to invest nearly a billion dollars in 2015 and 2016 in facilities and programs that are driving the future of health care. New Health + Wellness Pavilions are delivering health care closer to where people live. West Penn Hospital has expanded women’s health services and dramatically increased the number of babies delivered there. Consumer-driven programs like Meet Dr. Right and Same Day Appointments are making it easier to get quality care that fits your needs. This year, we’ve already announced a $115 million investment in Saint Vincent Hospital to improve access, operating rooms, and ER services, and we’re building a new facility in Westmoreland County as well.

Two other metrics speak to our progress. The health plan retained 96 percent of its commercial customers last year. And Quantros’ CareChex^® 2017 Hospital Quality Ratings made AHN #1 in western PA for coronary bypass surgery and heart transplant quality, #1 in the entire state of PA for major cardiac surgery quality and patient safety, and among the top 10 percent nationally in many other categories.

All of this has been achieved in a financially responsible way for our organization and for the health care system as whole.

Living Proof: The Real Measure of Our Success

I’m proud of our principled business strategy and measurable progress. But I never lose sight of why this matters: We took on the challenge of transforming the health care system, because what we do impacts the health, well-being and financial stability of millions of individuals and their families.

That’s why our marketing team’s Living Proof campaign resonates for me. It’s not just us saying something, it’s showing the impact that getting health care right has on real lives.

As some of you know, my family had our own “living proof” story with our youngest son. If there had been a camera, you’d have seen us experience the whole gamut from despair and denial when we thought we would lose him, to euphoria when a surgeon called us from the operating room, shouting because he was so excited to give us good news. That surgeon wasn’t just doing a job — he was fully invested, and gave everything he could to save our son. I do what I do today in part because I want to help make sure other families have that kind of experience — and aren’t crippled financially when they get through it.

As Highmark Health’s CEO, I have sometimes had the very humbling experience of being asked to intervene for a family in crisis. Just as one example, I had a call come in to my office one Friday. A mother had lost her child’s meds, and because it was a regulated medication, the normal protocol wouldn’t allow her to get more. I reached out to Sarah Marche, VP of our pharmacy team, and within about 30 minutes, Sarah had personally spoken with the mother, and was getting the prescription approved and filled. She told me that this medication was critical — if the family had waited until normal protocol allowed them to get more medication, there could have been terrible consequences.

I share that story, first, because it’s an example of the customer-first culture we’re building in which people use their minds and take responsibility for doing the right thing, rather than falling back on “that’s the way it’s done.” But beyond helping any one individual, our larger purpose in reinventing health care is to make the necessary changes to ensure that same level of access and quality for everyone, not just someone whose position or wherewithal results in a special request.

Getting health care right means more families have experiences like my family had when our son’s life was saved, or like the mother who got medication to prevent a potential problem for her child. I’ll go a step further. When you think about the impact that health has on so many areas of life and on productivity, and how employers can expand hiring when we help them control health care costs, getting health care right means helping to ensure that the next generation of Americans has even better quality of life and opportunities than prior generations.

We Believe in Better Health Care

I was recently asked if anything has surprised me about my time as CEO of Highmark Health. One pleasant surprise has been seeing how much hunger there is, inside our organization and in the marketplace, for a health care system that looks for ways to meet the needs of today’s consumer instead of focusing on how to preserve its status quo. People want change. They want to believe there’s a future that can be better than the past, and that they can be part of creating that future. That’s the shared sense of purpose we’ve tapped into at Highmark Health.

There is still a hard road ahead and much work to be done. Reinventing health care is no short journey — but people are joining that journey, as customers, employees and business partners, because we are proving that the health care system can be smarter, more caring, and more consumer-driven.

The folks leading this, at all levels of our organization, have stood tall through difficult challenges, and they’ve stayed focused on the deep purpose of our work. I am extremely optimistic that they will continue leading the way toward an integrated care and coverage model that puts the patient at the center, improves quality and outcomes, and controls costs.