'Don't think you can turn into or develop a health plan on a dime'

Mary Brainerd became CEO of HealthPartners, an integrated hospital and health plan system based in Bloomington, Minn., in 2002. Under her tenure, the nation's largest consumer-governed, not-for-profit integrated delivery network has grown to more than $5.5 billion in revenue, employing 22,500 people, including 1,700 physicians, to serve its 1.5 million medical and dental plan members. Just before taking the top job, Brainerd was diagnosed with breast cancer. Her conversation with Modern Healthcare reporter Bob Herman started there. This is an edited transcript.

Modern Healthcare: What was it like to be a patient with cancer while also being so involved with the healthcare system professionally?

Mary Brainerd: It's one of those things that you can never be prepared for, but I can still remember the shock of hearing the word cancer and knowing it was applied to you. Our kids were younger then, and you immediately get concerned about the people around you and what's next. I was so lucky my cancer was caught early and was really very treatable, but it was really the fear and anxiety that was the very most difficult part of that diagnosis.

A lot of people still see cancer as a death sentence more often than is clearly the case today. It was a really good reminder of the mind-body connection and how much chronic illnesses or any kind of illness is emotional in nature.

What I really learned that affected me the most was how much you need to understand, how much information you want to have available, how important your team is, and the fact that they know each other and everyone has the same game plan for your care. That coordinated-care, team-based approach and consistent game plan for how we're going to tackle the challenge of care and treatment together all were really clear priorities for me.

MH: The president has called for a moonshot to cure cancer. How can America's healthcare system try to achieve such a lofty goal?

Brainerd: For many kinds of cancers, new treatments and new effective approaches to care are being developed all the time. We worked with public television here in Minneapolis to profile some of the people who have been our patients who are longtime survivors living with cancer.

The future of cancer is better treatment and management so it becomes much more like a chronic illness, much more like living with diabetes or heart disease.

MH: Why did you tread outside your Minnesota stomping grounds to form a joint venture with UnityPoint Health to sell Medicare Advantage plans in Iowa and Illinois?

Brainerd: This comes from our roots. A health plan can be most effective if it has strong connections with the delivery systems. So we try to work closely with delivery systems, not only our own, but across our marketplace. UnityPoint was looking at the future and saying: We want to be much more closely tied to the financing system to be able to accept some financial risk and to step up to do care coordination. We had a similar world view about the opportunity to bring Medicare Advantage into the Iowa marketplace.

MH: What advice would you give to hospitals that are looking to start their own insurance arm?

Brainerd: There is a clear appetite. (But) being a health plan is a lot more complicated now than it was five years ago. It's not for the faint of heart. You really need to know what you're doing. Sometimes people still feel that health plans handle the transactions of healthcare and enrolling and paying claims and doing some reports. Anyone who's worked with a state-based exchange, anyone who's working with Medicare Advantage, anyone who's figuring out how to work with their state Medicaid program, any health plan in those roles knows it's a very complicated environment.

Don't think you can turn into or develop a health plan on a dime. It's a cultural evolution as well and a delivery system. That doesn't happen overnight. Being able to perform at scale as a competent health plan is a very challenging body of work.

MH: Do you have any further expansion plans?

Brainerd: We're always open to those considerations and looking for ways to grow our geographic footprint. We're considering possibilities all the time.

MH: Rates have been a big issue in 2016 on the state exchanges. PreferredOne, which was one of the more popular Minnesota offerings, left the exchange. How is HealthPartners faring in this year's open enrollment?

Brainerd: The 2016 open enrollment has gone better than the 2015 enrollment. We still have a number of operational issues with our state-based exchange. Minnesota has stayed wedded to a state-based approach and it has had a lot of fits and starts over the past couple of years.

PreferredOne left the exchange amid huge losses in the first year. Blue Cross took quite a bit of high-risk enrollment this past year and as a result had very significant rate increases. So, overall, I would say the hard part for Minnesotans has been seeing those big rate increases. Minnesota rates are still among the lowest in the country. But those exchange rates or individual rates have very much reflected the fact that Minnesota had a very expensive and large high-risk pool, and all those individuals moved into the exchange. It's contributed to higher-than-expected price increases.

MH: How many people have you enrolled so far?

Brainerd: We're now up at about 70,000 members, so we've grown each of the past three years. We're about where we want to be. We get about a quarter to a third of the enrollment in the individual market. Our rates did go up about 25% this year, reflecting more than anything what happens when you take the highest cost individuals in the entire market and concentrate them in an individual market rate. Hopefully, there will be more stable rates going forward, but I think it's going to take until 2017 or 2018 to get Minnesota where we need to be.

MH: UnitedHealthcare might leave the exchanges. Many Blues plans are losing money. Are there issues that the CMS needs to rectify to make exchanges more sustainable?

Brainerd: Part of the challenge this past year has been the fact that the risk corridors weren't funded. It did not affect us, but around the country you see many, many health plans that have had to take huge unexpected losses as a result of the risk corridors not being in place. So, everyone is a little gun-shy and wants to make sure their rates are adequate for the risk of the people they cover.

MH: Do you think the CMS should limit the special enrollment periods or relax rules for standardized health plans?

Brainerd: It's challenging to offer the richer benefit plans. Across the country you see a lot of moves to step back the benefits, even in gold plans. The exchanges have started to feature much higher deductible plans with lower levels of coverage. Whether or not that is the level of coverage we want, or hope people will have, is a completely different story. I worry about the balance between affordability and coverage adequacy.

MH: I'm guessing people are choosing gold plans and then probably have a lot of healthcare needs.

Brainerd: That's a very fair assessment. One of the other strategies being used, not so much in Minnesota, but in other states, is narrow networks. They keep the costs low by narrowing the care choices.

Again, I worry that it's very hard to be an adequately informed consumer when you're buying based on price on the front end, and then find out you've got a health condition that is perhaps not appropriately or not adequately reflected in the network option that you've chosen.

The current dynamics have a lot of gotchas: The gotcha of the out-of-pocket expense, the gotcha of “I don't have as much coverage as I expected,” and the gotcha of narrow networks. Those things concern me.

MH: How do you view this presidential year shaping up from a health policy perspective?

Brainerd: My hope is that we quit arguing over the Affordable Care Act and start the business of making sure that what we've got can work even better in the future. I'm glad people have more options and ways to access coverage. But some of the challenges around things like risk corridors, levels of coverage and levels of subsidy are still not adequately answered.

The other thing that is likely to be a hot political topic is the cost of pharmaceutical products. Drug costs are going to stay at the top of the list of consumer and voter concerns.

MH: How have prescription drug prices affected your organization? Are specific drugs a problem?

Brainerd: Clearly the hepatitis C medication is right at the top of the list. There's a medication for cystic fibrosis that's a very high-cost medication, one that's very beneficial for patients, but high cost. The underreported element of this is that the prices for generic products and routine branded products are going up at four and five times the rate of the CPI increase.

We've got a lot of work going on to make sure that medications, which are our No. 1 way to deal with chronic illness, are working for folks. The trend for pharmacy costs has been annual increases of about 13% nationally. We're under 9%. That's a result of negotiations with drug companies and our intense work with our own pharmacists to make sure medications are used effectively.