Q&A: ‘Imagine if healthcare were priced to consumers’


Since 2003, Mark Ganz has served as president and CEO of Cambia Health Solutions, the not-for-profit parent of 22 companies offering healthcare products and services, including health plans operating under the Regence Blue Cross and/or Blue Shield name in Idaho, Oregon, Utah and Washington. He previously served as president of Regence Blue Cross and Blue Shield of Oregon and held executive positions within the Regence Group. Ganz is chair of America’s Health Insurance Plans and serves on the board of the Blue Cross and Blue Shield Association. Modern Healthcare reporter Bob Herman recently spoke with Ganz about how his companies are seeking to make healthcare more consumer-directed and his views on what will happen if the U.S. Supreme Court strikes down the ACA premium subsidies. This is an edited transcript.

Modern Healthcare: How did Cambia start?

Mark Ganz: Cambia was founded in 1917 in Tacoma, Wash. It was actually the first health plan in the world. It was started by the timber workers. People were getting injured in the mills and the logging operations. Serious injuries meant financial destitution because there was no safety net. So the workers came up with this idea: “What if we pooled a portion of our weekly wages to create a common fund so we can be there if any of us has bad luck?”

They went to the mill managers and said, “We have this great idea, would you organize it, take the money out of our paychecks and pool it?” That was the beginning of the Pierce County Medical Bureau. Then they went to local physicians who in many cases were giving healthcare for barter and they said, “We would love to have you provide care for our workforce, but would you agree to accept what we can pay?” That was the first network. It’s all about helping one another, and that value runs very strong for me and our company.



MH: You’re not looking at just being a health insurer anymore?

Ganz: No. My goal is the transformation of the healthcare model in this country, to make it more person-focused and economically sustainable. I’m just amazed that we tolerate the false economy of the current system where the prices are not real and are out of proportion. Imagine if healthcare were priced to consumers as opposed to priced to insurers. If Gilead were pricing its Sovaldi hepatitis C drug to consumers, it wouldn’t even be close to what they are charging for it. You have to take that across the entire spectrum of provider services.

What we are striving to create is a platform that allows consumers to be the drivers and integrators of healthcare, from birth to the completion of their life. They can organize the system of healthcare to meet their needs and not be forced to run like rats in a maze through integrated systems that weren’t built for them. When you do that and you price it to consumers, it completely changes the way you approach the art and science of medicine.

Look at Nexium, the latest example of a drug that, when it was priced to insurers, it was like $300-plus dollars for a 30-day supply. As soon as Nexium became over-the-counter and you could buy it at Costco, you could get it for around $25 for a 45-day supply. That happened with Prilosec, it happened with Claritin.

We have a company called SpendWell. It’s for people who want to pay as they go and have a seamless experience of scheduling their appointment, paying for their appointment online and getting a guaranteed price. The providers that participate basically set their price. We don’t negotiate a network price. The price is visible online. In 100% of the cases during our alpha testing, the providers set prices that were below their insurance “discount” price because they were pricing it to the consumer.

So markets work. We need to see that kind of environment grow because then it will spur everyone to be more accountable to the consumer. The idea is you change the culture by changing the economic model that covers 80% of those transactions. Then, for those 20% of transactions that make up 80% of the cost, it’s going to be harder for providers and drugmakers to live two difference existences.

MH: How do you aim to achieve those goals?

Ganz: The legacy pillar is Regence Blue Cross and Blue Shield, which has revenue of between $8 billion and $9 billion and is still the revenue generator of the company. Beyond the Blues plans, there is BridgeSpan Health, which was built to focus on the insurance exchange market. Then we have Asuris Northwest Health, a smaller company based in Spokane, which is not a Blue Cross and Blue Shield company. Pillar two is the consumer. We want to create the circumstances for a rich consumer experience based on pay-as-you-go medicine. We believe 70% to 80% of the actual transactions in healthcare can and should be affordable on a pay-as-you-go basis, and that the insurance side should play a much more refined role. The consumer pillar involves companies that are focused on creating acute transparency around price and quality.

I envision a time when people walk into the hospital and the procedure prices are literally on digital screens, and they guarantee that price. If they do a total hip, it’s this much, including everything. And if there is a problem or a mistake made, they don’t get to charge you more to repair the mistakes. When we started building our company HealthSparq 12 years ago, people scoffed at the notion that anyone would care about transparency or pricing. The company provides a user-friendly platform that helps consumers shop for and understand the prices of various providers and services.

MH: You now consider Cambia a technology company with a health plan?

Ganz: I would call ourselves a holistic healthcare solutions company built around consumer views. What do I want as a consumer from cradle to grave? We deliver a platform and a series of products and services, branded uniquely by the companies that offer them. I want it to all work seamlessly as our customers move through trying to stay healthy, through sickness and healing, and living well within chronic disease.

We’re not going to be the deliverers of the care. There are others that are much better at that than us. We want to create the platform upon which those various players can play that focuses all the attention on the consumer in creating a delightful consumer experience. We want to be the orchestrator of a total health solutions platform. It’s not about the box, it’s about the experience that I am able to have because the box exists. We want to be the box.

MH: What will be the impact of the pending King v. Burwell case before the Supreme Court?

Ganz: In Washington state it doesn’t mean anything because they have a state exchange. In Oregon, Utah and Idaho, there is more impact for us. But I am also the chair of America’s Health Insurance Plans. If the court strikes down the subsidies, that gives Congress a really interesting opportunity to show some leadership because the ACA is not perfect, and people on both sides of the aisle know that. If the court rules against the subsidies, the president’s legacy is threatened, and Congress needs to act. I’m an optimist. My hope is that it will spur a thoughtful discussion about how we address the imperfections in this law. Hopefully, the president will have a desire to preserve his legacy achievement and will know he needs to be a part of that. It is a very fixable issue. Congress will just need to step up and fix it.