Rick Kohn has had a diverse set of experiences since joining Florida Blue in 2014. He started in corporate development doing due diligence for mergers and acquisitions. He moved to finance and medical economics where he launched Truli for Health, an HMO company geared toward the small- and mid-size employer group market. And in June of this year, he became Vice President, Medicare Network and Segment Strategy.
Having a lens into those different lines of business has given Kohn a unique perspective as he helps Florida Blue Medicare push further into value-based care arrangements. It’s also helped him create a vision for forging partnerships with providers at a time when competition is heating up in the state.
This is two-part of an interview series exploring Florida Blue Medicare’s strategy to expand value-based care. In part one, Camille Harrison, Executive Vice President of Medicare and Chief Innovation and Experience Officer, detailed the company’s Medicare Advantage strategy. In this interview, Kohn talked with Oliver Wyman’s Parie Garg and Greg Berger. The following is an edited transcript.
Garg: We often hear that Florida is unique when it comes to provider dynamics. Can you describe the environment in the state?
Kohn: One of the interesting things about Florida is that it has the longest coastline in the contiguous United States. That attracts a lot of people, especially retirees or those who are nearing retirement. We have very rural areas and dense cities like Miami, Tampa, Orlando, and Jacksonville, set against a very culturally diverse landscape. When you put that all together, it creates a unique layer to provider dynamics. There are medical groups and health plans that operate in the very dense parts of Miami. And there are some that operate in very rural parts of the state. Accounting for the state’s tapestry and delivering high-quality care across those geographies, cultural orientations, and age demographics can be both a challenge and an opportunity — and we have seen models succeed in Florida where they might have failed elsewhere, especially when it comes to risk-based models.
This success has been supported by Florida’s current business-friendly environment. The regulatory requirements around creating a management service organization allow for innovation. Some of that innovation has led to real successes. It’s important to make sure this innovation doesn’t create additional complexity and fragmentation in the market.
Berger: How do you build a high-quality network for your members in such a mixed landscape?
Kohn: We must work with providers to deliver high quality, equitable, and cost-conscious care to Floridians. A challenge we face is how to do that effectively now but also plan for the future, especially as we increasingly turn to value-based care as a means of creating affordability in the market. For instance, our HMO contracts align incentives with performance, and that has worked well for us and for our provider partners. But consumers are looking for choice and there’s a growing prevalence of PPOs in the state, which is a much tougher nut to crack. Several studies published by the National Institutes of Health and others have shown that members that identify and select a primary care provider tend to be more satisfied with their care and have an easier time navigating the healthcare system. But PPOs do not require individuals to select a PCP — which then also makes implementing value-based care harder. Having said that, we are exploring several ways to expand our provider partnership efforts, including exploring opportunities within our organization to look across commercial models to assess other value-based arrangements.
Garg: Florida tends to be more open to value-based care than some of the other southern states. As you move from HMO to PPO, the notion of what constitutes value-based care will change. Given some of the market shifts you described, where are the greatest opportunities to collaborate with providers and bring a different flavor of care to your members?
Kohn: The opportunity we are facing is created by uncertainty; the uncertainty of a new risk adjustment model and other regulatory changes, a shift in member preference and demographics, and an evolving economic outlook. The greatest value will be generated through building ‘marriage-like’ partnerships between the payer and provider; where both parties are autonomous but share a commitment to work together during turbulent times. At times you hit rough patches. In marriage, you work through those and that builds trust and credibility with one another. It creates a deeper level of partnership. Just like any lifelong relationship, you don't come and tell the other party how it's going to be. You come to a table with the intent of reconciliation and working together. With that mindset, you're listening as well as talking. You understand what the issues are and then help find the solution.
We need to understand who we are working with, what the constraints are, and how we work through those constraints with an eye toward sustainability, health equity, and patients getting the right care at the right place at the right time. Ultimately, if there is a provider that is willing to work with us, we are always open to exploring ways to partner more deeply and differently.
Berger: There is a growing proliferation of large national insurers acquiring and expanding their provider footprint. How is that playing out in Florida and how is it impacting Florida Blue Medicare?
Kohn: Vertical integration has pros and cons, many of which have been well documented. This is true of payers buying providers and providers buying payers. As competitor health plans come in and buy providers, that limits the pool and changes the negotiations. Florida also has a prevalence of hospital systems and hospital-affiliated primary care providers. So, the same thing happens as more primary care providers become aligned with hospital organizations. In these situations, we may not have as much influence to leverage our position to try and keep costs low in the market.
At Florida Blue Medicare and our parent company, GuideWell, we believe you can align incentives and accomplish your objectives without doing an acquisition. You can do it by establishing those trusted partnerships, which can be contractual or through joint ventures. And, keeping with the marriage analogy, we try to find those lifelong partners to build more organically with the right economics.
Garg: How do you see your overall value-based care strategy evolving?
Kohn: The largest evolution I see will be the growth in PPOs, where the relationship between the primary care doctor and the member is not as tightly defined as it is in the HMO model. As an industry, we must find a way to make progress toward effective value-based care — delivering high-quality care and reducing medical spending through aligned incentives — in a PPO environment where there isn’t that strong anchor to the primary care doctor. PPO members are expressing their preferences for autonomy and flexibility – not traditional managed care -- through their purchasing decisions. I know we will evolve our strategy to address that.
The rise of consumerism in healthcare is a little bit at odds with the concepts of value-based care — appropriate access to the right care, at the right time with the right escalation patterns. Success of value-based care long term is going to have to take the member experience into consideration when they are expressing interest in choice and flexibility. The PPO model is where creativity will come into play, perhaps high performing providers that have a model that works well across both products. And there might be other value-based care arrangements that drive the same savings and access to care.
Our goal is to expand access to affordable, high-quality healthcare solutions for Floridians. Whether it's an HMO or PPO, the goal is the same — to move more members into value-based arrangements because we believe that's the way you improve outcomes and impact cost.