Uncovering How BlueCross BlueShield Achieves Hyper-local Healthcare with National Scale
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Rebecca D’Amico serves as Chief of Staff to the CEO and Vice President of Strategy for the Blue Cross Blue Shield Association (BCBSA), a national federation of independent, community-based and locally operated Blue Cross and Blue Shield (BCBS) companies. D’Amico helps drive the CEO’s priorities for the Association, including aligning organizational efforts to achieve corporate goals that support the BCBS companies and those they serve. She also helps advance the Blues' Systemwide strategy to shape a high-quality, affordable and equitable healthcare system across the country.
Prior to joining BCBSA in 2013, D’Amico worked as a management consultant in the healthcare industry, with a focus on regional health plan business strategies. She received a bachelor’s degree in healthcare management and policy from Georgetown University in Washington, D.C., and a master’s degree in public policy from the University of Chicago Harris School.
Future of Digital Health
Sohum: How has your view of digital health changed pre-pandemic versus post-pandemic?
Rebecca: Anyone working in healthcare has changed their view on digital health coming out of the pandemic. But if you asked me, ‘Are we leveraging telehealth solutions to their full potential?’ my answer would be no. The big thing that comes to mind is integration. Telehealth is great, and in many instances, it can drive cost savings by replacing a higher-cost in-person visit or avoiding more emergent care down the line; but in other instances, it might be duplicative.
The next wave of telehealth is figuring out how to effectively integrate virtual with in-person care. Thinking about people with chronic conditions, for example: how can we optimize virtual services to monitor those people and engage with them outside of what we know are critical in person touch points? Finding that sweet spot is what’s next.
Point-Solution Fatigue
Sohum: Point solution fatigue has been voiced repeatedly this year by employers, health plans, and even patients. Is there a way to specialize care for targeted populations, without creating choice overload bias?
Rebecca: We had an explosion of digital innovators in the healthcare space over the course of the past decade, and on the heels of that, it quickly became a conversation about point solution fatigue – especially for large employers that want to have innovative, engaging, and cost-effective benefit offerings for their employees. The pendulum continues to swing in terms of ‘How much innovation do you want?’ and ‘How much potential disruption are you willing to accept for the promise of a better experience or lower cost?’
As an industry, I think we’re still finding that balance. And the companies that truly innovate to deliver a better experience at a better price, while finding seamless connections back into the overall member or patient experience, will be the ones we see around for the long haul.
The Blues Network
Sohum: What unique advantages do the Blues have and are there any disadvantages or obstacles that you also tend to see?
Rebecca: The superpower of the Blues is our national reach combined with unprecedented local depth. The Blues serve 118M members: 1 in 3 Americans have a Blue Cross Blue Shield card in their wallet. We’re in every zip code and we have relationships to deliver care with over 2M providers.
But the real differentiator for the Blues is that we’re deeply ingrained in our local communities. It's not just about touching every Zip code, it's about being in the community, understanding and investing in the community, and having a shared mission across our Plans to drive more affordable, equitable care. The biggest opportunity for the Blues as we continue to evolve is finding the right balance of optimizing our local presence with our national scale.
Health Equity at Scale
Sohum: I know an important topic for you specifically is health equity. How does BCBSA, with its scale, reach and magnitude, engage with and impact individuals in communities?
Rebecca: Our commitment to driving more equitable outcomes for moms and babies is one of the best examples to answer how we show up in our local communities. As a system of BCBS Plans, we quickly identified maternal health as the place to start our efforts, largely because of how stark the disparities are in that category. Black mothers have a three times higher mortality rate, yet 84% of maternal deaths are preventable. These numbers are staggering.
We knew that making a meaningful impact on maternal health equity was going to require us to lean deeply into our local communities, because the way these issues show up is uniquely local. So, we’ve taken on a couple of different pathways. For example, the way that care is delivered is incredibly local. And yet we've also, at the national level, looked at our Blue Distinction Program in maternal health. We’ve changed the way we designate birthing centers to be a part of our Center of Excellence to ensure they have an eye toward equitable outcomes.
We're also leaning on our data, because we know that we can't manage what we can't measure. We've taken steps with partners, like the National Minority Quality Forum, to figure out how we can set different standards to collect race, ethnicity and language data, or sexual orientation and gender identity data. Just standardizing the way data is collected and defined is a huge step.
And importantly, we’re working to influence outside the doctor's office. One example is BCBSA’s partnership with the Boys & Girls Clubs of America to combat the alarming youth mental health crisis. By investing more than $10M, we’re implementing trauma-informed practices in over 5,000 Clubs by 2026. Between the Clubs across the country and the Blues’ roots in local communities, we’re uniquely positioned to support kids’ emotional and mental well-being.
Lowering the Cost of Care
Sohum: Affordability is another important priority for BCBSA. Can you talk about how the Blues are working to bring down the cost of care?
Rebecca: First, it’s important to celebrate that over 90% of people have health insurance today—a historic high. Yet at the same time, costs are growing at an unsustainable rate. Four in 10 people put off care in 2022 because of the costs. It has become a barrier to seeking care.
In 2023, the BCBS system launched an affordability policy platform with specific and tangible recommendations for policymakers. We wanted to tackle the places we knew would have the biggest impact for our members. One is about hospital billing and competition, site neutrality, which is about paying the same regardless of where care is delivered. Right now, hospital outpatient departments are charging two to three times what a physician’s office would charge for the exact same service. We need to level the playing field so members pay the same for the same service at the same level of quality, regardless of the setting. There's about $500B of savings tied to that.
Another piece is in the pharmacy space. We know that one in three people aren't taking their prescriptions as recommended because of the cost. Pharmacy costs have also been rising at about 60% over the past decade, and they're one of the biggest buckets of where your dollar goes as a member. We’re looking at how we could bring generics and biosimilars to market faster, and how to ensure direct-to-consumer advertising, if at all, is appropriately managed.
The last piece is about ensuring people are getting the right care at the right setting at the right time. It ties into digital health and ensures that quality care is being delivered efficiently.
Synergie Medication Collective
Sohum: Last year, BCBS launched Synergie Medication Collective to improve access to costly medical benefit drugs. How and why did this arise and how did the Association work with Blues to launch this? Are there any plans to build similar initiatives for other key focus areas as well?
Rebecca: I can't believe it was just last year that we launched the Synergie Medication Collective across the Blues. The Blues spend over $80B annually on drugs. And an increasing number is made up by specialty medications, like higher cost therapies and infusions provided by a physician. They're life changing therapies, the pipeline coming to market is huge, but they're increasingly coming to market with 7-figure price tags.
We started our work together by focusing on high-cost specialty drugs because of their importance to our members but also their cost. We’ve taken both a volume and value based approach to managing these therapies. The volume approach is intuitive: it's negotiating a better discount for the Blues to offer their members. But where there's the most innovation is in the value based approach. Instead of just working within the traditional pharmacy supply chain, negotiating a better discount and paying the same way we always have, we decided to pay for the outcome that we want to see. By coming together collectively, we’re also able to create a better evidence base of how these therapies are working for our members—which benefits everyone, including the pharmaceutical manufacturers that need that same evidence to prove the value of their products.
The work we're currently doing with Synergie on specialty medications, on medical benefits, and on outcomes based arrangements for things like cell and gene therapies, is the tip of the iceberg. The theme of this conversation, it seems like, is balancing our superpower of being hyper local with national reach… more to come on that!
Local Efficiency as Blues
Sohum: A lot of people think value-based care and value-based outcomes cannot be scaled up — but you’re doing it. As a system of 33 Blues plans, how do you think about opportunities for alignment or leveraging scale to support local plans?
Rebecca: Our affordability platform, and the way that we come together to advocate for the right things for our members, is a great example. Synergie is another great example of how we lean into the scale of the system. It’s about balance, because not everything is appropriate for us to tackle together. If we do everything together, it takes away from how we show up in our local communities, understand their specific needs, and tailor our business strategies accordingly. And yet, the one place that I know we'll continue to come back to is our data foundation.
Our data is one of our biggest assets as a system, covering 118M members. We’re constantly solutioning: how can we optimize that for the benefit of our members and our employer customers? How do we continue to build our data and analytic assets and leverage disruptive technologies to drive faster insight and better outcomes? The options are endless in terms of how we leverage the largest dataset in healthcare to drive a better, more affordable and simple care for our members.
How to Work with BCBSA
Sohum: Touching on disruptive technologies: outside of individual Blues plans, how do innovative companies work with BCBSA today, and what does that process look like?
Rebecca: One of the well-known places we invest in new market innovations as Blues is through the Blue Venture Fund. We bring together the Blues and pool our dollars—nearly $1.5B in managed assets across the system—to fuel innovation in ways that align with our strategy. Path and Nest Health are good examples of investments we’ve made that drive innovation in the behavioral health space.
Another testbed for innovation is within our Federal Employee Program. The Blues cover 5.6M federal employees and their families across the country, and while core tenants of our offerings are the same regardless of where those members live, we work with the federal government to pilot new innovations in local markets with the promise of seamless, convenient, affordable care. In some instances, we find that those innovations are worth providing access for all of our members, and we work to evolve our offerings to ensure consistent access to the best benefits.
Wisdom for Local & Regional Plans
Sohum: How might smaller state based or regional plans approach innovative technologies or strategies to improve member engagement, satisfaction and trust in order to keep up with the Blues of the country? Any words of wisdom, especially when they might not have the institutional network support that Blues have?
Rebecca: It's easy to get mired in the new thing coming to market. And yet, if we don't get the basics right, no one's going to care about the new promise of a silver bullet. At the end of the day, when our members access their health plan, it’s to use their benefits when they’re in need or seeking care. They want to know: Is this service covered? How much will I have to pay? Is my provider in network? How easy can I make an appointment? Unless we get those things right as payers, our members won’t turn to us as the trusted partner for anything else.
So, it's not to say that other innovations out there aren't worth evaluating, but you first have to build the credibility and trust with your members by flawlessly delivering on the basics of the healthcare experience—and in doing so, actually getting your members to utilize and engage with the innovative offerings you’re bringing to bear.
What’s Next in Healthcare 2024?
Sohum: What are you most looking forward to for the rest of 2024? What are some changes or trends in healthcare you're most excited to witness?
Rebecca: It's nearly impossible for me to answer that question without talking about emerging technologies like generative AI. When you think about healthcare, we are one of the largest and fastest growing segments of the U.S. economy; we spend $4.5T on healthcare and a quarter of that is waste; 1 in 8 people are employed in healthcare and yet we’re running up against critical workforce shortages, especially in rural communities. And despite the innovations that have come to market to solve pieces of the healthcare puzzle, healthcare remains incredibly opaque for people navigating care and coverage.
All of those things line up to suggest healthcare is a place where generative AI could have a profound impact on everything from administrative efficiencies and workforce productivity, to supporting our members and their families in meaningfully different ways. And, I get more excited thinking about its potential from where we sit as Blues. Gen AI will only be as powerful as the data it has access to, and I’d argue the Blues have the best starting point of anyone.
