McKinsey on Healthcare
The journey to a new tomorrow: A conversation with Patrick Conway, MD, President and CEO, Blue Cross and Blue Shield of North Carolina
15 Jul 2019
Chapter 1: What is the main topic discussed in this episode?
McKinsey on Healthcare, a podcast series about visionaries, leaders, and problem solvers shaping the future of healthcare. On today's episode, McKinsey partner Celia Huber is joined by Patrick Conway.
As you think about the next five to seven years, what do you see as the two to three biggest challenges or disruptions in the industry?
I think you're seeing consumers, employers increasingly frustrated about the current state and really expecting better healthcare quality and outcomes, lower cost and a great service experience. And so then I think the three things that we'll see are one, a move to value. I think you're gonna see over 50% of payments
across private and public payers in two-sided risk arrangements with providers that are true partnerships like ACOs. Second, I think the much more seamless and digital consumer experience that's tailored based on people's needs and their healthcare needs. And then third, I think, is advanced data and analytics.
Both the healthcare consumer and healthcare providers at a much deeper level are able to tailor benefit designs to meet people's needs, are able to understand what's driving healthcare costs and quality gaps, and really addressing both the cost and the quality and the experience of care at a much more rapid pace.
Let's talk about consumer experience. How do you think that's gonna evolve for patients and in the way care is delivered? How will providers have to change and how will you see even family members or other caregivers be involved?
Yeah, so in terms of patient experience, now people often wait a long time. They don't necessarily get evidence-based care, and that care is too costly. So if you think about what that looks like in the future, I think you will see a seamless care experience where people's health care needs are met when, where, and how. They want them met.
I think much more of that will be telehealth than virtual, so not met in bricks and mortar visits. I think you'll see much more care delivered at home, so not in the hospital setting, but in the home-based care environment whenever possible. And then lastly, I think in terms of customer experience, to give you an example, Blue Cross Blue Shield has a net promoter score in the high teens.
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Chapter 2: What are the biggest challenges in healthcare for the next few years?
It's actually quite good for a health plan, believe it or not. There's no health plan in America above 40 right now in an aggregate net promoter score. But how could we work to have a seamless care experience where we and other health plans could be a 60 or more in terms of net promoter score?
What are some innovative partnerships that you think are changing the landscape of health care more broadly? They may or may not be in North Carolina. And how are those partnerships helping patients?
in North Carolina are focused on partnering with providers to care for patients, both the total cost of care, quality, and experience. We can have documentation and coding focus on risk adjustment and quality measures and not other aspects, so that the provider can focus on care delivery for the patient.
We're doing a lot of partnerships in the data and analytics space, so bringing technologies that have been used in other industries, including artificial intelligence, to bear on the large amount of healthcare data. Across the blue system, We insure 105 million lives.
So with the other blue CEOs, we've been having a lot of discussions about how we partner better together on capabilities and other aspects to deliver better care to people.
Partnerships can be difficult. What do you think are some of the key success factors?
I think the keys are trust, clear delineation of roles and responsibilities, a focus on long-term partnerships, and that often means potentially with less partners and vendors and others. There's some things we say we should build ourselves because we think we have that capability and can do it.
But there are many things where we say if we can deliver better value to our customers through a partner, then let's proceed through a partnership model. So a lot of our work at Blue Cross North Carolina is done through partners.
When you were at CMS, you were really pushing towards the infrastructure needed for value-based care. So I thought I'd just ask you, given your background as a pediatrician, how has that shaped your focus on value-based care? And how do you think the experience for a practicing physician would change? And how has that impacted your views?
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Chapter 3: How will consumer expectations shape the healthcare experience?
We're in Medicare and commercial and ACA now, but we're planning to go into Medicaid as well. So we need providers that really specialize on taking care of some of the sickest, often poor patients with multiple chronic conditions. that I want us to be the best mental and behavioral health plan in the country.
And what I mean by that is that we focus on actually providing mental and behavioral health to everyone who needs it, which unfortunately is not always the frame. So we're looking at an array of partners, both integrated into primary care to deliver mental and behavioral health, telehealth enabled.
I'll give you one example that I found interesting, and we're actually looking at a company that did a study of counseling to people who needed behavioral counseling in person versus telehealth with a person versus avatar powered by AI. Avatar powered by AI had better health outcomes, lower cost, and especially in the millennial generation, it was by far the preferred solution.
So it's really thinking about health care differently and how we solve the access problems and the quality issues in mental and behavioral health.
How are you thinking those things are going to come together around affordability?
We want premium increases that are less than 5% across all lines of business every year, if at all possible. But the cost of health care, as you know, has gone up and up and up over years. It's becoming unsustainable. I interact with families across North Carolina. One example, a farming family I interacted with the other day. Their total health care costs are on the order of $32,000 a year.
This is not sustainable for people and families across America. So 85% of our costs are medical costs, but we can't use that as an excuse. That means we've got to partner with providers and others to bring down those medical costs. The other area that as a nation I think we're going to have to tackle is pharmaceutical costs.
So obviously innovation in the drug space is incredibly important and has saved literally millions of lives. But that innovation won't matter if people can't pay for it. So over time, how do you solve this issue of both access and lowering the cost of health care?
Is there anything special you're doing for rural health care, both access and affordability?
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Chapter 4: What innovative partnerships are transforming healthcare?
So I think if you're persistent, you can generate some real positive results.
Thanks as always to our listeners for tuning in. To learn more about McKinsey's work in healthcare, please visit McKinsey.com.