← Becker’s Healthcare Podcast
Becker’s Healthcare Podcast
Rob Hitchcock, President and Chief Executive Officer of Select Health
00:17:43
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- [00:02]
A
This is where health insurance leadership comes together. Becker's 4th Annual Spring Payer Issues Roundtable brings together over 400 payer and health plan executives and more than 100 speakers to Chicago, April 13th and 14th. This year's event includes keynote conversations with the industry's top leaders and former President George W. Bush. For the full agenda and event details, visit Beckershospitalreview.com and click on the Events tab in the upper right. We're looking forward to hosting you here in Chicago.
- [00:34]
B
Hello, everyone, and welcome to the Becker's Healthcare Podcast. I'm Scott King, thrilled today to be joined by Rob Hitchcock, President and Chief Executive Officer of Select Health. Rob, how are you? Thanks so much for joining us.
- [00:45]
C
I'm good, thank you very much. It's a pleasure to be here, of course.
- [00:49]
B
Yeah, I know, I know we have a lot of big topics in health care, especially with health plans to get to, but before we jump into the topics, can you please just kind of tell us a little about your, your background and your career journey?
- [01:01]
C
Sure. I, I'm currently the President CEO of Select Health, as you said. I've been a health insurance executive for many years, been with companies like Humana and Centene and some of the blues plants. Moved out to Salt Lake about three and a half years ago and have been the CEO of Select Health for about three years now. And what's interesting about Select Health is it's, it's a little different than the national players and that it's owned by Intermountain Health. So Select Health is a wholly owned subsidiary of Intermountain Health. And so we're what's known as a community health plan or a provider owned health plan, which makes us unique in the ecosystem of health insurers. And I can say it's just been a pleasure to be part of an organization like that.
- [01:49]
B
Thanks a lot for the background info there, Rob. Yeah, certainly a unique position to be in in this space. And let me ask you, getting to the first topic. How are your relationships with providers changing as both sides face cost pressure and workforce shortages?
- [02:04]
C
That's a great question. Being a provider owned health plan has put us in a unique situation where our default as a health plan at Select Health is to work very closely with providers. And so we were founded in 1983, so we've been operational now for about 43 years. And in our 43 year journey, our first thought is how do we work very closely with our providers and how do we take care of our providers and how do we work collaboratively with them. And so, from that perspective, I do appreciate that there's a lot of cost pressures, not only for health plans, but for our physician and hospital providers as well. And I have a great amount of appreciation for that. But I also think that the way that we work together with providers and with hospitals is together, rather than, as I call it, the enmity model, where each side is just trying to protect their own interest, and so we kind of default to that. I think a great example of that is something that we all had to live through, especially providers, was the Change Healthcare incident that happened a little over a year ago. And the way we handled that was we were getting a lot of outreach from our provider partners, saying, hey, look, I'm in danger of not being able to make payroll because I'm not getting my claims paid due to this issue with Change Healthcare. And so what we did is we advanced money to our provider partners so that they could make payroll, keep the doors open. And we were a little nervous about that. We felt it was the right thing to do, but we're a little nervous because we weren't sure that that money was going to be paid back. And in reality, what happened was all that money was paid back, and our relationships with the providers, although I would like to think was good before that, was even better after that. And so I think we've always defaulted to that. But the other thing I would say is the way we get through these cost pressures that everybody's facing is, again, we have to do that together. And I think that's going to require a lot of operational changes. And the only way that that can be done, I think, is working together and being collaborative and just being open and honest with each other, which I think in a lot of ways in the industry doesn't happen very often. And so that's what we're focused on is really how do we be open, how do we have authentic conversations with our provider partners, and how do we work through these challenges together rather than, rather than independently?
- [04:48]
B
Yeah, you know, it doesn't happen very often, Rob, and hopefully you'll start to see more of it. I think that's a great example of, you know, reaching across the aisle, so to speak, and advancing those funds. And I'm glad to see they got paid back. But, yeah, just a great example of kind of going out of your way to make sure everyone can. Can work together effectively. What do you. What do you see the biggest gap today? Excuse me? Where do you see the biggest gap today between payer strategy and operational execution?
- [05:16]
C
Well, I think, I think there's a few things. One is there's a lot of external pressures, I think, on health plans today. And the one example I'll give you on that is there's a lot of regulatory pressures that are, that are put on us. And I think regulatory changes always have positive intent behind them, but it does put some pressure. The greatest example is on our individual product. The federal government, through the One Big Beautiful bill, actually increased premium taxes. So for select health, that impact was about $14 million a year. And that puts enormous pressure on us to keep premiums low and to benefit our communities that we serve. So that's something that we're always cognizant of. The regulatory changes that are happening, I think also our ability to change and to adapt. And let's face it, with the changes in the One Big Beautiful Bill or HR1, I'm not sure what people are calling it, but that I think has changed a lot of realities for people, not just on the health plan side, but for providers as well. I mean, when you take a trillion dollars out of the healthcare industry through specifically on the Medicaid side, that changes things. And, and I think from an operational perspective, what we're going to have to become very good at. And again, I think this goes back to working with our, our hospital partners and our physician partners is, okay, well, when you, when you take a trillion dollars out of the ecosystem, what do we have to do differently? And, and I think we are all going to be doing things differently. And I think, I think some of the different changes that are going to happen from the hospitals, from the physicians and even the health plans is going to be, I think it's going to be significant. And so how do you do that? How do you change that? How do you change your mindset? How do you change the culture of American, the way healthcare is delivered in America? And to me, that's the biggest challenge we got coming up in the next, I would say three to five years is how do you change the mindset of how healthcare is delivered? How do you operate in an environment where revenue has been decreased by such a significant amount? Those are really difficult challenges.
- [07:47]
B
Well, that's incredibly interesting thoughts there, Rob. Let me ask you about that. What do you think the first step is towards changing that mindset? What do you think that would be?
- [07:55]
C
Well, if you think about the, I reference culture of how healthcare is delivered in America, the culture is, and this is a bit of a history lesson, so forgive me. And this is not my personal opinions, this is Kind of just reality. But America, back in the early foundations of the country, decided that health care was a purchased service, that the only way that an American can get health care is if you purchase that service, right or wrong. And so I think the mentality of hospitals with physicians and even health plans is that, okay, well, that we're going to do this pay for services or fee for service environment. You know, you get a procedure done or a visit to the physician, that you have to pay for that, and you pay for that on a, you know, as incurred basis, so to speak. I think when you take a trillion dollars out of Medicaid, that mindset has to change. And that means that you have to start the way you treat a Medicaid patient or a Medicare patient or a commercial patient may change. So if I'm a physician and you think about physicians and how they think they're like, well, I'm going to treat every patient the same. Well, that may not be. You may not be able to do that going forward. Right? You may have to change how you treat a Medicaid patient, how you treat a Medicare patient, how you treat a commercial payment, and even the site of care. So perhaps a Medicaid patient is not treated in a hospital. Perhaps there's an alternative site where a Medicaid patient receives care. And by the way, I know I'm saying some things that might be disagreeable to some folks, but I think that is the reality, and I think that is what providers are struggling with and even what health plans are struggling with. It's like, if my reimbursement on Medicaid is going down so dramatically, how then do I change the delivery of health care to that population so that they still are able to get the services they need, that they're still able to live a healthy lifestyle? But I do it in a way that is 50% less expensive than it is today, by the way. I don't have the answers to that, which I think the important thing is, is that health plans and providers, physicians and hospitals, have to work together to redefine that. And I think even government is going to have to be involved in this. Because, for example, if I'm successful at really reducing the cost of delivering care to a Medicaid recipient, either through reducing utilization or through working very collaboratively with a provider partner, the government should not punish me for doing the right thing. So in other words, if I really do that and I really reduce the cost, government is going to have the tendency to come and say, well, okay, well, you've reduced that cost. So I'm going to reduce your reimbursement even more. That can't happen. You have to be able to reward health plans and providers and hospitals for doing the right thing, for reducing the cost, for keeping people healthy and not strip them of their ability to make a living. And I think that's going to be very tempting for government to do. So I think we're going to have to work very collaboratively, not just with our provider partners, and I say that term generically, but our physician partners and our hospital partners, but also with government agencies and entities to say, hey, look, we're going to try to do the right thing here, but you can't punish us for doing that.
- [11:42]
B
No, absolutely. I think a lot of people certainly agree with that, Rob and let me ask you, what's one investment or initiative you believe will most reshape how health plans operate over the next two to three years?
- [11:55]
C
I think it is this concept of culture. I use that term a little bit loosely, but the culture of the way medicine is delivered in America is this concept of if I provide more services then I get paid more. That just has to change. What's interesting about it is I've been in this business for a long time. I would say that I've been, I've been working on, you know, at Intermountain and Select Health we call it proactive care, but the industry calls it value based care. So, so I'll just use the term proactive care. I've been working on this for 25 years of my career. Kid you not so. But I think now there is no other option. We have to figure out a way where you change the culture of, of the American, the way America delivers healthcare to say that less is more, not more is more. How do we keep people healthy? How do we keep them out of the hospital? How do we deliver services, healthcare services closer to home rather than in a bricks and mortar setting? And how do we do that in a way that's effectual, maintains quality and improves the health of the members and patients that we serve? I think that is the biggest challenge that we're going to have as an industry. And there's no way we get through that unless we figure that out together.
- [13:28]
B
Along the lines of changing the culture. If you could change one regulatory or industry practice tomorrow to improve affordability and access, what would it be and why?
- [13:39]
C
Well, to me, not Medicaid's not only under discuss the spotlight, but Medicare and Medicare Advantage is under the spotlight. And to me, the way the Way health plans are reimbursed on risk on this risk adjustment basis is just a fascinating thing. I think initially when CMS came out with the risk adjustment model, I can't remember when it was. I think it was like 2003, four, somewhere around there, early 2000s, where they changed that. Again, I think the intent was very positive. I think it's become this process whereby health plans are encouraged to make sure they capture all these codes and there's really not a quality or a outcome measure that's tied to that. I think risk adjustment has gotten to a point where it was never the intent that the way it's operating now is never the intent of how it should operate. And so what we're trying to do is we're trying to work with CMS and some really thoughtful people to say how can our risk adjustment, the way we get paid for Medicare Advantage, how can that be changed so that we are paid in a way that encourages us to make sure that members and patients are healthier, not paid on a basis of how many services that they get? Because again, I think it's this culture of America where less is more rather than more is more. So then how do we work with a government entity like CMS to say how do we get paid for making sure that patients and citizens of this country actually get the appropriate service at the appropriate setting? And that may mean that they get, they get less services, but it's, it's more effectual and it's more timely and it's, the outcomes are better rather than, rather than this kind of focus on generating more services, if that makes sense. So I think if there's one thing I could change, and we're trying to change, that is how do we make sure we're were paid in a more efficient, more effective way than what the current risk adjustment process is with Medicare.
- [16:02]
B
And the last question I have for you, Rob, what issue is putting the most pressure on health plan margins right now and how are you going to respond differently in 2026?
- [16:13]
C
I'm going to say three. One is the regulatory pressures are real. They've always been real. So that's one, and I use one example on the, the premium tax going up. I think our pharmacy spend is just out of control. I think we're the only country in the world or one or two countries in the world that do direct to consumer marketing and that just creates this perverse incentive. So even though CMS today has done some wonderful things on negotiating drug prices, drug prices are still going up. Not just going up, but going up in a dramatic way. We got to get control of that. We got to figure that out. That's it's just unsustainable. And then I think the other thing is is behavioral health. On the one hand, the pandemic was wonderful because I think it destigmatized mental health and I think that's a wonderful thing. But behavioral health spend and this really is really out of control as well. And so we have to figure out how do we get people the help that they need because mental health is just so important, but how do we do that in an affordable way and in a way that again, that gets the patients and the members the help that they need but in a more affordable way?
- [17:32]
B
Rob, thanks so much for joining us on the podcast and for a great conversation. Look forward to you speaking with us at the April event.
- [17:38]
C
Yeah. Thank you so much. Appreciate it.