The journey to a new tomorrow: A conversation with Patrick J. Geraghty, CEO, Florida Blue

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DISCLAIMER: The views and opinions expressed are those of the interviewee(s) and are not necessarily those of McKinsey & Company.

Prashanth Reddy: Pat, in your role as the CEO of GuideWell, you lead a large portfolio of businesses. What are some reflections over the last four or five years in your role? [Editorial note: Florida Blue is part of the GuideWell family of companies].

Patrick Geraghty: At GuideWell, we decided that we needed to be bold. The Affordable Care Act was coming, there was much more of a retail-based purchase that was going to happen in the marketplace. And so, we needed to position our company in a way to be effective.

When we looked at the marketplace, we couldn’t just be an insurer, we needed to look at the health of individuals. We needed to position ourselves as a health solutions company. We are thinking comprehensively about health and the issues of health. We didn’t confine ourselves to a single state. So, while we are principally Florida Blue, one of our major organizations, we have five companies operating under that holding company.

Today we’re operating in 29 states in some way, shape, or form in our business. We’ve grown from an $8 billion business to almost $17 billion business, over the last six and a half years. We have been bold about how we’ve engaged the marketplace. We’ve very much embraced consumerism and that retail purchase that consumers are doing in today’s marketplace, and we knew we had to manage the healthcare spend in a more aggressive way.

Prashanth: If you had to reflect back on one or two things you would’ve done differently, what would they be?

Patrick: I think it’s been very challenging for us to be in the Medicaid business. And so, we’re looking at our continuing role there.

But we tried to do everything that appeared to us to be necessary at the time. We had to be ready for the Affordable Care Act, we had to restructure our business. And we had to really get into more delivery of care if we were going to affect the cost of healthcare.

Prashanth: But the individual market success has been the complete opposite in terms of your impact on an institution.

Patrick: Individual market has been a complete opposite. We have operated in the black every year. We now have just shy of 1.2 million people covered in the state of Florida in our ACA and individual market portfolio. And I think that’s the largest single enrollment in any one state in the nation. We’re pretty proud of those results.

Embracing challenges and disruptions

Prashanth: If we look at the industry more broadly and even outside Florida, what do you think are some of the top challenges and disruptions over the next five to seven years that you have to watch for, and appreciate, and act on?

Patrick: Well, I certainly think that we’re still in the early stages of the transformation into consumerism. The retail nature of our business is going to continue to explode. Consumers will be looking to health plans to deliver at least as good a service as they get in other parts of their life.

Embracing technology and centering that technology around the consumer is absolutely critical. Part of what we’re looking to do is to bring services to the home setting—make them convenient to the consumer. One of the things we did last year was we bought a company called PopHealth, they deliver chronic care at the home setting. I think when you marry serving people in their home setting with technology, you make the experience about that consumer in a convenient setting which we think will be higher quality of care and lower cost.

I also think the competition’s going to change. There were more people getting interested in being in the health space. It’s such a big part of our GDP, and we expect to have more people coming in, more organizations that blend or blur the lines between the traditional way of lining up and competing. And that will change the nature of competition in the marketplace. So, there is no dull future for the transformation of healthcare. We see it continuing at a rapid pace.

Prashanth: Is there anything on digital and analytics that you see also coming down the pipe?

Patrick: I think, the idea of digital, is very important to serving consumers in the way they want to be served. It’s also the way you can bring information to the fingertips of those people that you’re working with. But it’s also critical that we use our analytics to be predictive about what’s going to happen and what the needs are of a consumer. Because I think the value add that you bring to the equation is your ability to forecast, your ability to anticipate needs before they happen, and add value to the customer. So, we see those as very important transformations.

Innovative partnerships

Prashanth: What are a few innovative partnerships that you see impacting the healthcare ecosystem, either that exists today or that could exist in the future, that could have “at-scale” impact?

Patrick: If I look at our organization, one of the more creative partnerships that we’ve been involved in is with a group called ColSanitas—a health plan out of South America—that we created a partnership with to build medical clinics starting in South Florida, but now growing to other parts of our state.

The clinics have been very well-received. In fact, two years ago no patients [were] enrolled and enlisted in those clinics, now we have 195,000. So, we’ve had great growth in those clinics.

And we think that will scale across a number of places. So that’s something we look to grow in the future. And so that partnership has been valuable. We’ve also had very valuable partnerships with the YMCAs in our state. And we actually are embedded in a YMCA with one of our retail centers in Jacksonville.

And across many of our locations, we have wellness, and diabetes education, and nutrition programming that we do in combination with YMCAs. And so, there are a lot of partnerships that we’re now involved in that go well beyond the delivery of care, and really get into health, lifestyle, nutrition, and making sure that we’re taking care of the whole person.

Bringing services into the home

Prashanth: Is there anything around technology partnerships and integrating the broader ecosystem that is something that you’re thinking through also?

Patrick: Yes. As we’re looking at AI and how that plays out in our marketplace, we actually have a pretty progressive pilot that we’re undertaking right now where we are using an application, we refer to as Flora, that allows our consumer to ask questions and get answers to their frequently asked questions.

So similar to Alexa and other things that you see in the marketplace, we’re taking the information that we have and making that available to our consumer, to take a lot of that lower-level interaction, that high-volume interaction out of our call centers, which allows our interactions to be at the more sophisticated level.

And that helps bring information to people quicker, easier, and it allows some of the more basic questions related to healthcare to be answered in a manner that I think will be very convenient and very well accepted by our customers.

Prashanth: Interesting. So, you’re changing the definition of contact to be much broader in terms of the interaction model.

Patrick: That’s right. And we want to make that easy. One of the concepts that we’ve tried to expand on in our organization is “high tech” and “low tech.” So, the high tech is trying to use an AI application. We’re trying to use a technology that serves somebody in the home. At the same time, we believe in the technology of high touch and low tech, by having a retail center where people can actually engage us face to face.

We have 20 of those centers across the state of Florida, and even in this age of technology and where people love to do so many things online. Our centers have been wildly popular, 350,000 unique visits last year. And consumers are very much engaged in talking about their healthcare, because it’s expensive, it’s complicated, and it’s the most personal thing that they actually buy. And so those engagements have been very, very well received.

And we think that that’s an important part of looking at the future as well. Bringing services to the home, part of that’s about technology. But when you’re dealing with a senior, it’s also about do they have fall risks in their home? Do they have grip bars? How do they handle their meds? Because if they mix their meds and keep them in a big bag because it’s more convenient than opening the top of the container, then you’ve got hospitalization risk all over the environment in which that senior is living.

And our ability to interact with the senior in that home setting can prevent a lot of bigger expense. So, everybody wins if we can be engaged on a low-tech way with our consumer, as well as a high-tech way.

I think making it easier for everyone to navigate the health system has got to be a goal of where we’re heading in the future. And those services that we can bring to the home and make them convenient will be a big step forward in making the health and healthcare system much more attractive to the user.

Being urgent about the customer

Prashanth: Shifting tracks a little bit, just more to your personal leadership style. If you will think about the steps that you are taking as a leader to prepare your institution for all the challenges and opportunities that you noted earlier, what would some things be that you’re doing now? What do you plan to do in the future?

Patrick: You know, some of the things that we did right away were to take on the culture of our organization. And by that, I mean we had a culture that was producing a good result. We were a solid organization. But I wanted it to be a great organization.

And to make that move to great, we had to be more urgent about the consumer. We had to care desperately about making sure we were taking care of the customer, and that anybody who touched a customer issue addressed it with great, great urgency. Part of that is a culture where, when you’re deciding what’s your top priorities, that you actually can make a disciplined decision around what are the top three to five things that we’re going to do? And what falls below the line?

What I found when I first got there is that everything was a top priority. And when everything’s a top priority, nothing is a top priority. So, you have to have discipline around what you’re going to spend your time and resources on, so that’s important. You have to be urgent about the customer, and shift your culture to make sure that that’s top of line. So, we have a chief customer experience officer, and we have a real focus on the customer.

Part of all of our senior level discussions, is around our experience and how we’re impacting our consumer. Another thing in the culture was we believed that everything had to be created at our organization. And it’s very clear that the future’s about partnerships.

And so reaching out into that ecosystem and making sure you’ve partnered with the right players and that you’re integrating top-level services across the ecosystem makes a big difference in your ability to have the scope and span that you want to, and the excellence in services that you’re trying to deliver.

Being bold

Prashanth: To close, if you were to give some advice to your CEO peers on a couple of nuggets of things that they should go do, what would they be?

Patrick: Well, I’d start by just saying be bold. I mean, many times you approach a situation and you think about what the incremental change could be. We’ve decided that we have to continue to be bold. And so as we’re looking at where are we going next, we’re not happy that the last two years are the best two years in the history of our company.

We’re pleased that we accomplished that, but we’re not content that that’s the end point. So, we’re right now doing a major project to renovate our Medicare product and to renovate our consumer product, and in both of those spaces, we’ve dedicated resources.

Don’t be complacent. Don’t go at change incrementally. Really look for what are the opportunities? What are the big plays? And go bold.

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