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hello I'm hog Levens from knowledge at
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Wharton and today we're here with Bruce
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brussard who is the CEO and president of
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human the fourth largest Healthcare
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Insurance Group Bruce welcome to
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knowledge at Wharton well thank you I'm
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so glad to be here Bruce uh on the web
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this morning I see that your your
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comments in Louisville and earlier in
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Texas uh raised something of a buzz uh
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there uh you said that uh were there are
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a lot of bumps in a road coming with the
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implementation of the Affordable Care
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Act and also very interesting uh you
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indicated that the price of
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insurance wasn't likely to be going down
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anytime soon and this has to do with the
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3:1 ratio and the way that's will be
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tightened up can you uh uh tell us a
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little bit more about that yeah hog I I
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we first I want to say that we are very
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very positive on the fact that healthc
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care reform is going to expand coverage
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so we're we're glad about that but it is
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going to raise the cost of care and what
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we see is is that the 3 to1 ban that
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we're talking about is really going to
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uh cause the younger population and the
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healthier population to pay more um to
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help with the older population because
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that band is going to restrict your
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pricing of the difference between the
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lowest and the highest and so young
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people who are very healthy will be
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paying more than they expect to pay in
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order to fund old people who will be
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using more than certainly than the young
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people fundamentally that's a good way
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to say it and you know there's a there's
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a lot of work going on right now in the
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details of healthcare reform so it's not
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completely finalized but the way it
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looks today and what the experts are
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telling us is I think the public is
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going to see an increase in healthcare
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Insurance in
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2014 and overall looking down the road
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at the implementation of the Affordable
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Care Act you're the Press coverage of
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your remarks seem to be saying that uh
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you were still concerned about the
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fragmented kind of uh uh somewhat
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chaotic nature of where everything was
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going could you give us an idea of uh
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you indicated there were bumps in the
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road what are some of the largest bumps
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that concern you on the insurance side
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and on the care delivery side well one
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of the challenges we have is CMS has a
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lot of work going on right now and so we
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have not seen all the details around the
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healthcare reform so we sit here now in
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February and the implementation is going
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to be at the end of the year in fact
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people will start buying in the coming
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um probably in the fourth quarter or so
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and so we're asking the question of just
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some more details in that aspect of that
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so first it's just trying to provide the
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details the second aspect it is so
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complicated it is such a complicated
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Bill and there's so many interrelated
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details that I don't think anyone knows
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all the various different parts of this
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um aspect of it and the concern is is
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what we don't know in terms of uh the
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health insurance exchanges which are a
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large part of all this um we're looking
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down the road it's a matter of months
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now before things have to start
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happening uh we know some states are
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doing some things some states are
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refusing to do things some states are
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setting up their own some are going
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Federal uh what are your actual
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expectations of what will be there uh
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you know on this upcoming deadline do
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you think we'll make the deadline do you
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think it's realistic to expect Health a
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year from now health exchanges will be
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up and running and actually be in use in
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50 states I don't know if it'll be in 50
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states I mean I think there are going to
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be Decisions by some some states that
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will probably decide not to do that um I
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actually today is the final deadline of
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what states have to decide if it's going
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to be a federal program or a state
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program in that regard I
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um I do think that when we talk about
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bumps in the road I think the The Hope
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and I think everyone's intention is to
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get it um off the ground and I think
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they I don't see any reason different
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differently from that but I do think
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that there will be a lot of details that
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have to be worked out over the coming
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months that that could prevent it but I
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I think the intentions are fully to have
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it up and on the cost issue of the young
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versus the old do you think the public
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fully appreciates what's coming do you
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think think the Press has gotten this
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right or do you think this is a subject
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that has or has not been uh talked about
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enough in public I don't think it's been
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talked about enough in public C I think
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the the plan has really been talked
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about around the expansion and and the
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communication of the reform has been
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around that but I do not see there's
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been a real large um conversation around
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the what the impact is to the the public
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uh and in terms of and in terms of the
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Health Insurance Exchange is the latest
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reports out of human uh are that you
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hope to open them uh you hope to be part
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of them in 10
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states uh can you tell us the 10 states
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or uh we're really not telling the 10
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states but there are there are states
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that today we um have a significant
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presence in in states where we feel that
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we can offer the the best plan for
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members that participate in the exchange
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so it's really our our bigger states
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that we we're focusing on and I'm
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guessing that some of those States will
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be St established exchanges and some of
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them are likely to be Federal
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established exchanges do you have any
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sense of which will be better in terms
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of business model for you I don't know
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if we have one that's uh better from a
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um a point of view of financial or for
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that matter ease of use uh but we do
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think that uh a federal funded is is
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easier for us because we're able to deal
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with one exchange and the rules of one
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exchange as opposed to dealing with
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multiple rules of of each state next
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issue uh we're really interested in is
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uh the whole issue of retail medicine
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and by that we mean over the last
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several years there been an explosion of
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the creation of walk-in clinics mostly
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staffed by uh uh nurse practitioners in
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drugstores in mallfront
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stores um in other consumer venues and
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in parallel there's been uh uh uh
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ambulatory uh facilities popping up
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everywhere that are essentially a
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cheaper alternative to emergency med Med
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um and I'm just wondering in terms I
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know that that human is becoming
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involved in some of that and in the big
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picture uh is this whole retail medicine
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thing a good thing or a bad thing for
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big insurance companies and or big
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Health delivery companies I think for
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the consumer it's a it's a good thing I
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think it's um cost effective I think
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it's also brings convenience and what we
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see in our relationship with our
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customers is that they are asking for
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that they're asking for something that
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is cost effective and convenient that um
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and there's a lot of conditions today
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that can be um appropriately treated in
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those settings uh so we're we're
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actually excited about that we have a
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organization called Concentra that
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actually has a lot of those clinics and
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we also have guidance centers um in a
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lot of our markets that um help in that
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ability to provide that convenience and
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costeffective Care does Concentra
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function as as kind of a feeder Network
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for any of your other products or it's
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just a standalone thing it does it um at
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um if it's an episodic treatment so if
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someone comes down with a cold and needs
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a needs some help there then um if it is
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a longer standing condition we'll refer
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them back to their primary care
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physician or to um whatever provider
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that they that they have a relationship
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with uh so irrelevant if it's a human uh
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physician or a physician a non-human we
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still refer them back to that that
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physician
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some of the observers have uh raised
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concerns about uh patients who go to
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Minute Clinics and and other kind these
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sorts of drugstore clinics uh and I
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think the numbers I forget the
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percentage is a high percentage of all
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who go next time also go there rather
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than their primary care physician
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there's a concern that these clinics
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have the ability to disconnect patients
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from the continuity of of primary care
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and and all the the health implications
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of that what are your thoughts on that
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well two two sides of that you bring up
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two very interesting points one is the
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from the standpoint that they are voting
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with their feet they're voting with the
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price and the convenience side so if
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they're going back it's an enjoyable
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experience that is an experience that is
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that is U uh something that they desire
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the second aspect I think you're
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pointing out to is a a a fundamental
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challenge in the healthcare delivery
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system and that is around connectivity
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of information and the healthc care has
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been divided among itself within silos
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and that connectivity of information has
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been lacking we are optimistic in the
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future that that particular issue will
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be taken care of and so that if they do
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go to an episodic kind of um u u service
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such as a Urgent Care Center or a
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primary care that when they do decide to
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go back into their Continuing Care um
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delivery system that they're able to get
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their information but I still believe
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that uh you will see a continued growth
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in the retail side because of that
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convenience and price and I think the
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real key for us as leaders in healthcare
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is how do you connect that to the more
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traditional side where there is more uh
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chronic conditions and more acute care
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needed and some strategic speculation if
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you look down the road 10 years and tell
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me uh the the uh the networks not
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necessarily human but the networks of
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these clinics and these Ambulatory Care
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Centers and the traditional hospitals
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and other care Delivery Systems where do
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you see the relationship going are we
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likely to see them most of them become
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aligned feeder systems are we likely to
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see parallel competition where do where
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do you think it's going in the big big
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picture I think the primary care model
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will continue to grow to be a very
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influential part into the referral
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system of Health Care um whether it's a
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primary care model in the uh setting
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that you're referring to a a retail
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setting or a primary care in a
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traditional setting around a f Family
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Practice delivery model but we we are
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big Believers that that model will
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continue to be a very important part of
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healthcare because Health Care needs
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somebody to help navigate through the
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Journey of care and the primary care um
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Family Practice oriented Physicians are
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really at the Key of that and the issue
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the one point you raised which is
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chronic care and these clinics and
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Ambulatory Care Centers there's a great
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deal of concern among primary care
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physicians we've talked to and and
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hospitals and others that chronic care
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particularly conditions like like
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diabetes account for a lot of the care
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that's given and a lot of the revenues
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that are generated and if the clinic
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systems begin to uh pull in uh you know
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diabetic patients on a big scale it has
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Revenue implications for everyone do you
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see uh again looking down five or 10
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years do you see that that the The
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Chronic care delivery will become a
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normal part of what these Clinic
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networks and even Ambulatory Care
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networks do I think um with staffed with
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primary care physicians they very well
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could do that I think um I believe that
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as we see the future that healthc care
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will continue to be more segmented and
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and uh patients like diabetes uh
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diabetics will actually be have a
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holistic view of Health Care I mean
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treatment so they will not only have a
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primary care aspect they'll have a
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nutritionist there I think they'll have
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foot specialists in there and there will
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be able to be taken care of it from a
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holistic point of view from from an
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individual and to me that's where a
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whether you're a family practice or a
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Urgent Care Center is how you can
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compete it's looking at the person in a
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much more holistic fashion as opposed to
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a particular treatment um and I think
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the the the patients will go to that
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particular model as opposed to just
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convenience because you're delivering
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much more
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value okay Bruce another big Trend out
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there in in healthcare land today uh is
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this movement uh in keeping with the
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Affordable Care Act towards team care
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bundled care uh a completely different
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sort of integrated approach to healthc
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care I know that human has been involved
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in this longer than most other uh
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companies tell us a little about where
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this is all going and what this is going
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to mean to healthc care reform in the
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very near future yeah we have a and we
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have a big belief that um integrated
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care is an important part of the
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delivery model both in being able to
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reward for cost and quality and being
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able to oversee the the Journey of
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Health for individuals in fact we saw
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that in recent president's um speech
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around talking about pay for performance
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that was a I think a very highlighted
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the need for that at himana we believe
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in the integrated delivery system
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through what we refer to as the
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integrated model and that really has
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three components to it one component is
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on the delivery system where we create
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relationships with primary care
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physicians and providers in general
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around aligned incentives on quality and
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cost the member experience is another
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area that we Orient to and really
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encouraging people to be actively
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involved in their health care and uh we
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have a just as an example we have a
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particular company called Vitality that
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they actually encourage people around
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membership and reward on health so if
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you take 10,000 steps a day you get 15
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points and what that we've found is
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between understanding your health
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through health risk assessment and
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participating in these programs you
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become actively engaged in your uh
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health and and really have an impact on
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that and then the last is data and
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analytics and I think for us to um to
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really make advancements in care uh we
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need to have the data in analytics and
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that includes integration of systems
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along with clinical analytics and then
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also
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consumers and how far away are we from
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that it part that's a huge concern yeah
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um there seems to be hundreds of silos
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of different systems uh looking down the
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road how soon do you think there will be
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some sort of rudimentary Universal
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system of medical information exchange
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between all of us I think uh we're
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making progress there slow the first
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step was to to Really wire the offices
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which was the electronic medical record
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now everyone has separate medical
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electronic medical records the next step
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is bringing those together uh healthc
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care exchanges will probably be the
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first step in that aspect of that and
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actually human has taken that step by
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acquiring a company just recently called
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certify and it is a company that
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connects one EMR to another EMR so that
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we and our providers can see not only
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what's going on at the particular
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Primary Care office for example or a
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hospital we can see across the um Health
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Care delivery system and and what has
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that individual seen and both recently
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and also historically okay and I think
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that brings us almost to the end let me
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ask you one final question which is
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again looking forward uh to the
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implementation uh of of the Affordable
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Care Act what do you think will be what
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is the biggest unappreciated challenge
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that insurers and Care delivery
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companies will face going down the road
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into that the the challenge that the
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general public least understands well
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we've talked about pricing I mean
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obviously that's the case I I think um I
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honestly think that's probably the
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largest issue is the pricing aspect of
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that there's a lot of details to work
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out the problem is we don't know those
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details um and that's why I say it'll be
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a bumpy road until we know those details
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and are able to work that out I think
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it'll be um it'll be just some some
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bumps on the road I do think and I have
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very large um um a very big belief that
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the future of Health Care is is is on a
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good road I think we are in some
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troubled times right now relative to the
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implementation this but I look to the
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Future and I see technology Information
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Systems I see the ability to bring all
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this together and have an impact on the
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cost and Care long term great thank you
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very much for being at knowledge at
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Wharton well thank you very much enjoyed
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it
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