Since May 2014, David Holmberg has been president and CEO of Highmark Health, a not-for-profit based in Pittsburgh with 2014 revenue of $16.9 billion and total income of $83 million. The system includes Highmark, a Blue Cross and Blue Shield insurer serving four states, and the seven-hospital Allegheny Health Network. Holmberg's organization has struggled to turn around the finances of Allegheny, which it acquired in 2013. Highmark has been involved in a series of clashes with the UPMC system, which has balked at serving Highmark plan members since Highmark acquired the competing hospital system. A court recently ruled that UPMC must continue to provide in-network services to Highmark's Medicare Advantage plan members. Modern Healthcare reporter Bob Herman recently spoke with Holmberg about the feud with UPMC, the future of the Affordable Care Act exchange business and the value of high-deductible health plans. This is an edited transcript.
Modern Healthcare: How are things shaking out in the ongoing conflict between Highmark and UPMC, the University of Pittsburgh's health system?
David Holmberg: I believe the future of healthcare may actually be decided in Pittsburgh. It's really as simple as you have a very strong insurance company that now has a provider system, and you have a hospital-based organization that got into the insurance business about 10 years ago. The two organizations are competing, and it's creating innovation and new ways of creating care delivery. The two organizations continue to separate or move farther apart. That was a decision made by UPMC wanting to go its own way.
We're not focused on how many hospitals we own. We have the Allegheny Health Network, which is excelling at high-quality care. But we're balancing that with our insurance arm. We're very focused on building what we think is the model of the future, which is less about bricks and mortar, and more about care management and how you engage people where they live, and provide care in more consumer-friendly settings. We're trying to create more effective care, a better consumer experience, and at the same time, make care more affordable.
MH: Do you foresee eventually working more harmoniously with UPMC?
Holmberg: Healthcare depends on people embracing the fact that there's real change afoot. We've got to create a more effective care system which the consumer finds easier to navigate, and in which it becomes easier for them to take responsibility for their own health. That means having partnerships with people who have similar values, providers who are looking to do the right things for their patients and for their customers.
As a payer-led provider system, we're not focused on how many heads are in beds in hospitals. We're focused on keeping people out of the hospital and keeping them healthy. We're willing to partner with anyone who shares that value and wants to create innovative solutions for care.
Being a payer-led provider system, Highmark Health is very focused on creating that more effective care. We'll have a conversation with anyone who wants to do that. But they have to be willing to invest in the future. They have to be willing to walk away from their legacy past and focus on what people need as we go forward.