Transforming Healthcare with Digital Solutions – Insights from Paul Markovich, CEO of Blue Shield of California

[00:00:01] This podcast is produced by Outcomes Rocket, your healthcare-exclusive digital marketing agency. Outcomes Rocket exists to help healthcare organizations like yours to maximize their impact and accelerate growth. Visit outcomesrocket.com or text us at 312-224-9945.

[00:00:34] Hey, everybody. Welcome back to The Beat Podcast, recording live from health in Las Vegas. Today, I have the pleasure of having Paul Markovich on the podcast. He is the Chief Executive Officer of Blue Shield of California, a nonprofit health plan with over $24 billion in annual revenue, serving 4.8 million members in the state's commercial, individual, and government markets. Paul, welcome to the podcast. Thanks. It's great to be here, Saul. Hey, so what brings you to health?

[00:01:02] Well, we announced on the main stage today that in partnership with Salesforce, we've introduced a prior authorization process that's as simple as using your credit card. And I have been saying for a long time how passionate I am about retiring fax machines from the health industry. And so we actually kicked the whole thing off with a parody of Office Space, where we actually did some damage to a fax machine. And I think that was the most entertaining highlight of the announcement. But that's the announcement.

[00:01:30] Yeah, we've completely revamped and digitized this process. It should happen in seconds. I mean, there's a prior authorization process to your credit card, and no one really thinks about it, because it just says processing for a few seconds. And it's seamless, and it's not very painful. And we're a long ways from that in healthcare. But we've figured out how to do it, and we're excited to be launching it. That's exciting. So I want to park on the video for a second. So who had the bat or the golf club? Like, were you in it? Yeah, I was in it.

[00:01:57] It was Jeff Allman from Salesforce and I were out there, and we tried to do our own version of that iconic Office Space scene. But we both had turns with the baseball bat, and we did some serious damage. And then Dr. G was on stage interviewing us, so we left her a couple of big pieces of the fax machine. That is awesome. When we left. Artifacts for the evidence. Exactly. So good, so good. And could we see that? Like, I mean, would we be able to link it up? Oh, absolutely. Happy to give you the link. It's fun. It's only about a minute long, and it shows you that even health plans can have fun at work.

[00:02:28] That's so great. Hey, if anybody listening wants therapy, check out the video. It is cathartic, I will tell you. It is cathartic. Watch it be destroyed. I love that. It's so symbolic of the big things that you guys are doing, especially in the field of prior authorization. So Blue Shield of California's latest announcement, prior authorization reimagined. You spoke about this. It's one of a huge number of transformative things you guys are doing.

[00:02:55] Tell us why you're doing all of this and about these bold moves. Well, we are driven by our nonprofit mission, which is to create a healthcare system that we describe as worthy of our family and friends and sustainably affordable for everyone. So God forbid one of your loved ones needs to access the healthcare system. First of all, they can access it because they can afford the insurance and the copayments that go along with it. And then they get treated like you want your loved ones to be treated at their time of greatest need. That's the standard that we hold ourselves to.

[00:03:22] And when you compare that ambition to the current reality, there's a huge gap. And what we realized, I'm finishing my 12th year as CEO this year. And what we realized very early on in my tenure is you just can't get there by incrementally trying to improve a dysfunctional system, right? Making fax machines run faster isn't going to make prior authorization better. You have to just start from scratch. And so we forced ourselves to do that and say, how should the system work to meet that standard? Not how does it work and how do we make it a little bit better?

[00:03:52] And that's what's led us to things like, well, this pharmacy distribution model is just completely dysfunctional. So we're just going to throw it away and start over again and reinvent it, which is what we've done and announced last year. You know, everyone should have access to a comprehensive real-time digital health record. We worked on that for a very long time and announced it in June that our members now have access to in near real time, all of the information from all their electronic medical records.

[00:04:22] What we've been trying to do is to say, how should the system work? And all of these initiatives fall into that same category. This feels a lot more worthy of family and friends. Like if you had a loved one who was trying to get authorized for what you thought was an important, possibly even life-saving treatment, you really want to be waiting days? No. No, absolutely not. I love that. You know, it's a simple philosophy. Execution is a challenge. And so it takes bold moves. This is the theme of the meeting.

[00:04:50] And to your point, you can't get the light bulb from improving the candle, right? So you... Exactly. Like you kind of change stuff to make it happen. Tell us, what does Blue Shield of California mean by reimagining the prior authorization process? Well, again, it goes back to what would you want for your loved ones in that moment? First of all, prior authorization plays an important role. So you actually want it to be there. There's things that happen.

[00:05:16] For example, the latest research that I've seen would indicate that within two years of having back surgery, people have as much or more pain as they had before they had back surgery. It's generally ineffective. So if someone shows up and says, you know what? You've got back pain. I think you should go have back surgery. And they send that into us. You want us to be able to say, whoa, hold the phone. You really should be trying some other things like physical therapy first before you go down that path.

[00:05:43] So there is a purpose and a reason for prior authorization the same way that there is for a credit card. And so I think the first thing you'd want is you would want us there because it's clear there's times that physicians aren't following evidence-based guidelines and that can be to the detriment and the quality of health of the patient. You want that process there, but you want to know immediately. Can you imagine waiting for a few days to see if your credit card transaction went through? Like, oh, I want to go to this concert. When is it? Tomorrow night. I don't know.

[00:06:14] Hopefully the prior authorization happens. Maybe it does. Maybe it doesn't. Maybe you have concert tickets. So I think to me, that's how we think about re-imagining. It's just start with that imagining one of your loved ones in that situation. How do you want it to work for them? And then that's how we try to design it, which is what we did with the prior authorization process. Awesome. Two questions. One, why was Salesforce the right tech partner for the job? And two, what has held us back from doing this sooner?

[00:06:43] Well, I'd say that Salesforce was the right partner because we'd already done work with them. Like this is probably our third iteration of something. About a year and a half ago, we worked with them to create really the first end-to-end cloud-based care management platform for a major health plan. So we have that in place. And by the way, that's a part of having that in place and then having these digital health records means that we have the ability to integrate, adopt, and use that information in real time.

[00:07:12] So now we had the tools between the data in a usable digital form and the cloud-based platform using standard application programming interfaces that allows us to real-time then connect to physician systems and the physician workflow and effectively create this process. So the fact is we had partnered with Salesforce before and had great success in doing that. And you can imagine that the care management system is one of the systems we need to use

[00:07:41] for a prior authorization process. So that extension made sense and they've been a great partner to this point. So it was a no-brainer for us to work with them. In terms of why it hasn't happened, I think there's a couple of things going on. One of the things that I take great pride in that I think distinguishes our plan Blue Shield of California from others and even just from others in the industry is what others find unfortunate, we find unacceptable. And so there's just too much. One of the reasons these things haven't happened sooner is there's just too much explaining going on.

[00:08:12] Healthcare is hard. It's complicated. This is why we have to do things. This is why it's so expensive. Instead of what are you doing about it? What are you going to do to change that and make it worthy of our family and friends and sustainably affordable? And I'd say the second thing is that while we have done a lot of that infrastructure heavy lifting, creating the digital records and creating a cloud-based platform that allows us to be real time, now you can step up and do prior authorization.

[00:08:39] But if you're still in a batch world and on-premise data centers and using fax machines, no amount of artificial intelligence is going to save you and allow you to like leap to this prior authorization process. You've got to do your digital and cloud-based infrastructure homework first. Yeah, that's really great. And so just sort of looking in the rearview mirror, when you started this digital innovation

[00:09:02] journey, was it on the map to transform the prior auth process or did you sort of start seeing it as you got through the care journeys and all that? Well, it's always been on the map. I had always seen it on the map as a part of adjudicating claims in real time, which is something we still are working on doing. And I'm hoping to come and announce with you at some point in some future meeting. Can't tell you exactly when, but that was always a part of the session.

[00:09:30] I just found it when people talked about the experience they went through, they talk about how stressful it is to be going when you're not a hundred percent, you're using the healthcare system typically because you're not a hundred percent. Something's going on. You're not at your best. And then you're getting just all of this delay in latency. Well, is it approved or is it not approved? Is my health plan paying for it? Is my health plan not paying for it? I can't understand. I've got all this paper that says this is not a bill, but it sure looks like a bill. And so there's all these things that happen.

[00:09:59] So we had always had this grand vision of like all of the things associated with us paying for your care should just be happening in real time or near real time. And that should not be adding to your stress. That was always been a part of the vision. I think the prior authorization process, I'm a little surprised that came first, but I'm excited that it's come first. That's awesome. Yeah. It's such a pain point and a lot of conversations. So really exciting to hear about the progress.

[00:10:25] So Paul, Blue Shield of California's latest moves represent a rapid pace of innovation and reinforce the company's dedication to breaking down what doesn't work to build back something better. How have you been able to pull it off? Well, it's funny. I'll talk to people sometimes and say, it's like 10 years of hard work and you're an overnight success, right? I have been the CEO actually finishing my 12th year this year.

[00:10:52] And we've really had this vision from the very beginning of my tenure, but it has taken a lot of heavy lifting, particularly on the infrastructure side to get there. So I'd say there's a couple of things. One is clarity of purpose from our board of directors down to the people who answer the phone. Everyone, if they tell you, why are you here? What's the purpose of Blue Shield? What's the mission? They can tell you. We're trying to deliver care that's worthy of our family and friends and sustainably affordable for everyone. And that just, you can talk to all 7,500 employees. We all know that.

[00:11:20] We all actually know what that means and what that standard is. So being truly committed, being clear on your purpose and being truly committed to your purpose, I think gives you the will to get things done. Then you also have to have the skill to get something done. And that's where you have to try to get the right team around you. And I've been very fortunate to get wonderful people. And you also have to find the right partners. I mean, there's just no way Blue Shield can do what a Salesforce does.

[00:11:46] Or, you know, we use Microsoft Azure for a lot of our cloud support. And we can't do what Microsoft does. So finding the right partners, getting the right talent, that's when you assemble the skill along with the will. I think the other thing is just level of persistence. That probably comes from me being a hockey player. When you're breaking new ground, stuff doesn't always work the first time around. And I mentioned how much like we started out trying to do real-time claims before we started

[00:12:13] to try to do real-time prior authorizations, but we're getting prior authorizations done first. So that's an example of just, but we will get there eventually. It's just, you got to be persistent. So I think that vision and sense, a strong sense of purpose, you know, the skill with the people and the partners and then the persistence. That's great. What did you do before Blue Shield? Well, I was a management consultant in New York before I joined Blue Shield in 1995. And then I actually left Blue Shield for about two and a half years on what I call an entrepreneurial sabbatical.

[00:12:42] I started a company and then got hired by another one and then eventually got pulled back into Blue Shield in 2002. And then, as I say, they ran out of promotions. That's fantastic. You know, and I think it's great that you got out for a bit, got some fresh perspective, came back in. I feel like that's so important. What would you, for leaders that have been in their seat for a long time, how did that help you? You know, and how could they maybe do something similar? Oh, it's absolutely invaluable.

[00:13:09] I mean, the lessons learned, particularly from that startup experience, just they were painful. But I think some of them, the best lessons are the most painful ones. And there's a couple of things that I took away from that. One was just how far you can stretch a dollar. And another one was how important it was to choose the right people. In this case, you know, the right partners and in the right investors. So that, because when you, you realize if you don't have alignment, if you don't have

[00:13:38] alignment of purpose and that, that any partnership is not going to work, no matter how smart or capable the people are. At some point, when you get to a moment of stress or a moment of indecision, you start pulling in different directions and it just doesn't work. So those were very painful, but highly valuable lessons. And I just think as much as you can get different perspectives and experiences and learn from them and be willing, that's why I just tell people, you got to be willing to take some risks because even if it doesn't pan out exactly the way that you hoped it would at the time,

[00:14:08] it'll be a rich learning experience. Love that. Great message for all of us, all the leaders listening. Think about ways to get yourself out of your normal and get yourself these experiences. You're always going to learn. Last one here for you, Paul, this one's fun, but when in Vegas, if you could set up a huge banner anywhere, where would you put it? And what would it say? Well, I'm going to take a little personal detour before I come back to a health related

[00:14:34] one, but I grew up playing hockey and so I, and I'm also a San Jose Sharks hockey fan. So I would probably hang a huge ghost sharks banner over the Las Vegas golden Knights ring. Damn. Watch out. Um, personally, but for health, I would probably, uh, I try to find a really conspicuous spot that said something along the lines of what happens in Vegas actually affects your health. Uh, right. Nice.

[00:15:01] Cause when I walk through here and I can smell the secondhand smoke and casinos and things, I start thinking, this is not feeling like the healthiest environment all the time. So, uh, yeah. I love that. No, great message there. Look for everybody listening. Where can they learn more about you, about the company and any closing thoughts? Well, we'll, uh, probably if we can give you a QR code that you could put in that they can find out more about prior authorization.

[00:15:27] See some actual videos where we're not smashing fax machines, but it shows you how the application works. We can do that. Love that. And you can always go to our website, blue shield ca.com. And there's all kinds of information about the company background about it. And if you're interested in employment opportunities or partnerships, I mean, that's the place to go. Outstanding. Paul, thank you folks for everybody listening. Just an incredible opportunity to connect with Paul Markovich, chief executive officer

[00:15:53] of blue shield of California, just revolutionizing the way healthcare is delivered and business is done in the show notes. You're going to find ways to get in touch with him and to get in touch with the company, find that video of that fax machine getting smashed and also how their programs work. All of that stuff is available to you now by looking at the show notes. Paul, this has been such a pleasure. Thanks for being with us. Oh, it's been my pleasure. Thanks all.

[00:16:41] This podcast is produced by outcomes rocket, your healthcare exclusive digital marketing agency. Outcomes rocket exists to help healthcare organizations like yours to maximize their impact and accelerate growth. Visit outcomes rocket.com or text us at 3 1 2 2 2 4 9 9 4 5.