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Becker’s Healthcare Podcast
Affordability, Innovation, and Transforming Healthcare in North Carolina with Dr. Tunde Sotunde
00:27:28
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- [00:00]
A
Hello everyone. This is Jacob Emerson with the Becker's Payer Issues podcast. Thrilled today to be joined by a very special guest, Dr. Tunde Setunde. He joins me here from North Carolina and I'm very grateful to get the opportunity to sit down with him today and give him your insights to our wonderful audience. So I'll let him take it away, introduce himself a little bit more and talk a little bit more about himself and what he does today at Blue Cross and Blue Shield of North Carolina. So Dr. Sutunde, thank you very much for taking the time to be with me here this morning on the podcast.
- [00:33]
B
Great Jacob, thanks for having me again. I'm Tunde Sutunde, President and CEO of Curaco Solutions and Blue Cross Blue Shield of North Carolina. Curaco Solutions is a not for profit holding company that includes Blue Cross and Blue Shield of North Carolina along with a portfolio of health services companies including care delivery assets. I'm a physician, pediatrician by training, though I've spent the past 25 or so years in health care services administration. Prior to joining Blue Cross of North Carolina, I served as president of Medicaid and state government related businesses for Elephants Health across 23 states including the District of Columbia. I had the privilege of taking over the helm of Blue crime back on June 1, 2020, which you might recall was at the height of the first wave of the pandemic. Since that time we successfully navigated through the pandemic and also we rapidly advanced our signature Blue premier value based care platform that has generated close to a billion dollars in medical cost savings since inception. And then more recently we stood up Curaco Solutions, not for profit parent holding company, to better align our capital innovation and also our portfolio of companies around driving towards making healthcare more affordable, driving towards better care, better access, better outcomes and a better overall consumer experience.
- [02:21]
A
Absolutely. And I actually that's where I want to start today, Tunde. Better health outcomes, better access, better affordability. You just said yourself it's why you all reorganize and you launched core solutions. And you know, we, we bring on leaders like yourself from across the healthcare landscape, within the health insurance industry and within the Blue Cross system as well here on the podcast regularly. And you would be hard pressed to find one nowadays when asked about the top issue they're to tackle and it is affordability for their members. Because as you know, health care costs are rising everywhere. There is of course a variety of reasons for why that is and it's different across different companies, different markets. But I wonder from Your perspective and where you sit in North Carolina, what are some of the biggest drivers right now of why healthcare costs are rising the way they are? And how do you frame that in a way where you're not just pointing fingers at another part of the system?
- [03:21]
B
Yeah, that's a great question, Jacob. So, first of all, let me start off by saying this, that regardless of where you sit across the healthcare ecosystem, whether you're a payer, whether you're a provider, whether you're a policymaker, big pharma, or even a patient, we're all in this together. And the fact of the matter is that there is no one party or individual to blame for health care affordability crisis. There is no one individual, group of individuals or party that can solve this alone. It's going to take all of us coming together in what I describe as a coalition of the willingness, right, to fix the structural flaws that exist across our healthcare ecosystem. The fact of the matter is that the gap between what healthcare costs and what consumers can afford to pay is only widening at an increasingly exponential, or, frankly speaking, an alarming rate. And there are several factors in play. One is lack of transparency. What other services or goods do you purchase where you do not know the price or the cost of the goods or services until after the fact? It's only healthcare. So that's one. Secondly is misalignment of incentives. Our reimbursement system in healthcare is predominantly fee for service. As I often say, if you pay for volume, you're more likely to get more volume. However, if you pay for value and outcomes, then you probably stand a better chance of getting better value and outcomes for your healthcare dollar. And then the fact of the matter is that our system is complex, it's fragmented and it's inefficient. The fact that we're still using fax machines. I said it. You heard me right. Fax machines, as one of the primary mechanisms of communicating with ourselves across the healthcare ecosystem, should tell all of us something. And then, of course, you have the health status of the population, you have the aging demographics, issues with access to care, social drivers of health. And then unfortunately, oftentimes regulatory or legislative mandates that inadvertently drive up costs due to the complexity or requirements that are not adequately funded for. So these are all factors or general themes that are in play across the country as a whole. Say that North Carolina, unfortunately, is ground zero for a lot of these things. It turns out that we're one of the most expensive states in the country for health care. From my perspective, there are a Couple of things that has or dynamics that are unique here in North Carolina. One is we have one of the most fastest growing populations of individuals over the age of 65. I believe that according to the Department of Aging, if I recall correctly, that by 2031, there'll be more people over the age of 64 than below the age of 18 years of age. As you know, as we all get older, we have more complex healthcare needs and it's more expensive to treat complex chronic conditions. That's just the nature of life. Secondly is our rural footprint. We have the second largest rural footprint per capita. I think that's the right metric. Second only to the state of Texas. 78 of our 100 counties are rural counties. 92 of our 100 counties are designated health professional shortage areas where there is a lack of access to basic primary mental health care services. A lot of our safety net hospitals, rural health hospitals have gone under. Right. So those are just increasingly challenges to the system. And then last but not the least, you have the health status of the population. High prevalence of diabetes, obesity. Right. And even cancer in North Carolina compared to the national averages. So just again, general themes across the country, but somewhat unique or exacerbated here in North Carolina.
- [08:33]
A
Absolutely, absolutely. So the complexities you're facing, it's not just what a lot of the other insurers across the country are facing. The issue of transparency, a sick population, the regulatory issues to navigate for you all. But you have a very unique state, large urban areas, but large rural areas as well, very quickly growing population, especially among seniors, and very expensive healthcare overall when you compare it to other states. And so I think the natural question there tunde then is in this very complex environment for you, both locally and then of course in the context nationally, how do you bend this cost curve? As a not for profit company, you're facing some very unique challenges. Clearly you've laid them out for us. But you're a different kind of insurer when you also look out across the landscape as well. So how does that blend?
- [09:28]
B
Yeah. Yeah. So to this day, we're still the only North Carolina domiciled, mission, purpose driven, fully taxed, not for profit health insurer that is statewide, in all lines of business and across all 100 counties here in the state. Why is that important? Well, first of all, over the past 90 or so years of our existence, we have built a strong reservoir of trust. We are the trusted brand here in the state of North Carolina. While others have come and gone over the years, we have always stood by the side of North Carolinians. In fact, last year in 2025, our customer satisfaction, our brand strength, reputation scores, our net promoter scores or NPS scores were the highest that we have ever reported going back in recent memory. So that's one, two is we're local, we live and we work in the same communities as our provider partners, as our local and state legislators, regulators, policymakers and so on. Community organizations, employer groups, and even our patients, our members, they are our neighbors or as I often say, oftentimes a phone call away. That allows us the ability to develop and forge very strong relationships, stakeholder relationships. Right. That allows us to collaborate across a broad array of stakeholders to address some of this system issues that exist across our state. And then last but not the least, we are a not for profit. Our shareholders, our stakeholders are the people and communities we serve. It's not Wall street, it is not retail or institutional investors. It's the people and communities that we are privileged to serve here in North Carolina. Our pre tax earnings expectations as a not for profit is 4 to 5% in a good year. Right. Just enough to pay our bills, keep the lights on, make investments in asset solutions and capabilities. To do what? To drive towards making healthcare more affordable. Better care, better access, better outcomes, better consumer experience. And then what do we do with what's left over? We give it back to the people and communities we're privileged to serve. So those are unique advantages. I would say is a competitive advantage that nobody else has. Nobody else can say what I just said or do or does what we do. Why? Because all our competitors are all original publicly traded or privately held multi state insurers.
- [12:51]
A
Yeah, yeah, absolutely. I, I know and you know, I will say I've had the privilege of being able to speak with your leaders at Blue Cross of North Carolina for several years now. And I will say it's interesting to hear you talk about the commitment to being in business across the entire state, across all 100 counties of North Carolina, consistently like other insurers do not. That is a theme that we've heard from your other leaders before in the past 10 days, even going back years. And so it's very clear that this is a company wide mission and commitment. And it's great to hear you of course espouse that as well. You mentioned earlier on in terms of some of the challenges that you, you all face in terms of providing coverage to a sick population oftentimes. And you know, we hear that from large health systems as well from leaders talking about a lot of the challenges they face they're often responding to the chronic disease issues that the population faces. And I know you've publicly talked about making the case that affordability is ultimately one upstream, that you have to make investments in access, investments in prevention, so that the things that we're talking about today can be alleviated in the future. And so I wonder how, how do you evaluate those investments with the same rigor as core business decisions, the ones that keep the lights on, as you said, how do you, how do you weigh those decisions?
- [14:24]
B
Yeah, you know, the math is simple in my mind. To the extent you can prevent conditions from happening, you can slow down the progression of chronic health conditions and, or avoid complications altogether. Not only is it cheaper in the long run, but you also, as importantly, drive towards better health outcomes and a better overall quality of life. A few years ago, we came to the realization that we needed to focus our efforts around what I'll describe as a whole person approach to health. Not just addressing the physical and mental health conditions, but also addressing the social drivers of health. Access to proper food and nutrition. Right. Access to transportation, which now you, you mentioned access. Right, okay. To care. Access to affordable, I would even say workforce housing. Right. Okay. I've often said, if you have a diabetic who's homeless, how far do you think you're going to get in controlling their diabetes or getting them to control or manage their diabetes effectively? If they don't have adequate shelter, that's what's going to be top of mind. We made the decision to realign our corporate social responsibility effort, including our foundation. We have a separate 501C3 foundation efforts in such a manner where the investments that we're making in our communities with our nonprofit partners and so on is aligned with our business priorities. Through that effort, we identified three areas of focus for the enterprise as a whole. Right. One, Youth mental health. I think it's fair to say people don't know this. We're in a pandemic when it comes to the mental health of our youth. Right. That's one. The second was health through food. Food is medicine. And then the third is access to care. Again, going back to some of the challenges that we referenced earlier on, particularly in the rural parts and underserved parts of our state, we have now marshaled the entire might of our organization, our enterprise, our family of companies around these three signature initiatives. So, for example, through our work, through health through food, we launched a program last year called Feed your Health. It is a core medical benefit, a medical benefit that we are providing to individuals Our members with poorly controlled or uncontrolled type 2 diabetes, where they have access to medically tailored meals and also nutritional counseling and a wellness coach for a period of time. This is a core benefit for those individuals. Why? Because chronic conditions, as you referenced earlier on, one of the leading drivers of healthcare costs, diabetes is up there in terms of prevalence. Almost a million North Carolinians are living with type 2 diabetes. That's just shy of 10% of our population, give or take. Right. It's costing the state, all of us, billions of dollars a year through those efforts or through that program already. We just published the first year results last week. Actually, we are already seeing tighter or better management of diabetes for those enrolled in the program, participating in the program, a reduction in overall total cost of care, improvement in health outcomes. Also, the participants are reporting a better overall satisfaction with their health and well being, better quality of life, productivity and other activities of daily living. The unique approach that we're taking to philanthropy is not philanthropy in the traditional sense, but is really around advancing our business priorities. And we believe, and we're already seeing it in the numbers, that it's a very powerful lever in driving growth, retention, reducing the overall total cost of care. And also it's turning out to be a tool that's driving employee engagement because people are more passionate, our employees are more passionate about what we do and seeing the impact of what we do each and every day.
- [20:08]
A
Absolutely. And it's fascinating to hear you talk about expanding youth mental health access, food is medicine programs, rural care access initiatives. And it seems like these things are all such a major focus around the country for insurers nowadays, trying to go after those things that, that 80% that, that affects your health outcomes outside the walls of the care provider. And you know, I know you were talking earlier a little bit about North Carolina's rural makeup being a significant driver of the health care costs that you're all experiencing. I think that's something that everyone forgets about about your state sometimes, is how rural it can be. Everyone's moving to North Carolina, we all know it' but people, I think, sometimes forget about the rural makeup of the state. And so I wonder where, where do you see the greatest opportunities for collaboration to deliver better solutions for individuals living in rural areas? And then of course, to build the infrastructure that's necessary to sustain a healthcare system in these areas that, you know, is disappearing in a lot of places.
- [21:14]
B
Yeah. So the good news is that the state of North Carolina was recently awarded, I think it was about a little bit over 200 million, maybe about 213 million if I had my numbers right in my head by CMS as part of the Rural Health Transformation Initiative. So that not only provides us with seed funding to build out or strengthen our rural health infrastructure, but it also provides us with a golden opportunity to do so in a coordinated manner, bringing together public private sector partnerships, again, a coalition of the willing of diverse stakeholders, payers, providers, policymakers, nonprofits and other interested parties to build a sustainable live for generations to come, addressing everything from healthcare workforce shortages. When I say healthcare workforce, I'm not just talking about doctors and nurses, allied health personnel, social workers, mental health workers, community health workers and so on. The essential fabric. Right. To any rural health care program. Two, building out a robust telehealth infrastructure so that we can connect the rural health ecosystem. But not only that, also connect that system to tertiary care, which unfortunately, a lot of tertiary care tends to be mostly available or limited to the urban parts. Right. Of any state of the country. Right. And then also in parallel, addressing what you had referenced earlier on, which is the social drivers of health, right? Access to proper food and nutrition. I mean, a lot of rural areas, you might only find one grocery store, right. For 30, 40, 50 miles, you know, and so on. So access to proper food and nutrition, transportation, you know, affordable workforce, housing, even child care, you know, these are issues that tend to be more exacerbated or manifestable, more so in the rural parts of our state. So I'm extremely excited and I'm extremely bullish about the opportunity that we're now presented with to build a sustainable system for the future. And I would hope one that could be an example for other states to replicate across the country.
- [24:18]
A
Yeah, absolutely. You really do put your money where your mouth is, because I know Blue Cross of North Carolina was right there during the pandemic, expanding telehealth services to your members. And you'll have to keep us posted on how things go with the Rural Health Transformation Program. It's of a lot of interest to leaders across the country. I could talk with you all day, Tunde. You have a great way of humanizing what are very complicated issues. But before we go, I do want to make sure to give you the floor one last time. Share any final thoughts with our audience or any bits of advice you want to share. Leaders across the country navigating the similar issues that we talked about today.
- [25:00]
B
Yeah. So, Jacob, let me put it this way, that I truly believe that in health care we all have the same ultimate goals and objectives, which is to improve the health and well being of our members, our patients, our customers, the people and communities that we're privileged to serve across the country. There's no question about that in my mind. Having said that, though, we all have to acknowledge and be real with ourselves that our system as it currently exists today, practice speaking, is broken. It is too damn expensive. It is so complex, fragmented, inefficient. Access to just basic primary and mental health care services is a challenge across the nation. And the consumer, or the member or the patient experience is underwhelming to say the least. And not any one of us is to blame and not any one of us can fix it. We all have to come together. And if we're able to come together, put the consumer, the member, the patient at the center of healthcare decision making, we will not only be able to drive towards building a better health care ecosystem that will improve the health and well being of the people that we're privileged to serve, but also I truly believe that our respective organizations, institutions, companies and so on will thrive even more so and even exceed our own expectations in that regard.
- [27:02]
A
Wonderful. Dr. Sutunde, I can't thank you enough for both your candidness and for your time and for sharing your leadership insights with our audience. We truly appreciate you doing so, so thank you.
- [27:14]
B
Great. Thanks for having me.
- [27:16]
A
Absolutely. Anytime. And to our audience. If you'd like to listen to more podcasts from Becker's Healthcare, you can visit Beckershospitalreview.com.