Christopher Booth became president of Excellus Blue Cross Blue Shield in March 2011, and became CEO of both Excellus and Lifetime Healthcare Cos. Inc. less than two years later. In his time leading the Rochester region’s largest health insurer, Booth has seen significant changes in the health care marketplace.
From a regulation perspective, the Affordable Care Act has changed how Excellus and other health insurers around the country do business. And the uncertainty over the future of the Affordable Care Act has made planning a challenge.
Locally, the health care landscape has changed significantly over the past five years. The merger that created Rochester Regional Health and the many acquisitions by RRH and UR Medicine have turned Rochester into a community where most of the health services are provided by one of two major health systems.
That timeframe has also seen Excellus shift more and more to a value-based payment model.
“We have, over the last five years, really changed our payment models to a model in which we incent the two systems to provide high-quality and cost-effective care and if they do that, we reward them,” Booth said.
“Both systems have bought in, have these arrangements with us and are working with us on both the quality and the cost.”
Booth has also made a personal commitment to health in an effort to be an example to others as the head of a health insurance company.
“Six years ago, I lost 60 pounds. You can’t ask everybody to be healthy and have a healthy culture and not live it yourself,” Booth said.
“I think it is very important for us to promote health for our own employees, for their health, for the health of the company, and we’re promoting health to our customers. So we have to walk it ourselves.”
In a wide-ranging interview with reporter Gino Fanelli and Rochester Business Journal Editor Ben Jacobs, Booth discussed the organization’s successes and challenges, the difficulty planning for the future amid the uncertainty surrounding health care legislation, the state of health care in Rochester, and more.
An edited transcript follows:
ROCHESTER BUSINESS JOURNAL: What are some of the biggest issues you’ve seen since taking over?
CHRISTOPHER BOOTH: The biggest issues have been changes in the environment. There’s been a whirlwind in health care over the last five to 10 years in terms of change, change from federal government’s perspective, change in the marketplace in dramatic ways, changes in the state level, changes in technology for the health insurance industry. To be able to navigate through the change over the last five to 10 years has been the biggest challenge. I think we’ve done a good job of navigating through that change, and trying to drive access to high-quality, affordable health care.
RBJ: How much does being a nonprofit play into navigating that balancing act of keeping your organization healthy while limiting the financial burden on consumers?
BOOTH: I think a critical part of our success story is our nonprofit nature. If we were a for-profit company we’d have shareholders and we’d have to have a mission of maximizing profit for the benefit of shareholders. We don’t need to have that. We need to make money to make investments and to be healthy, but we don’t need to make the kind of margins that for-profit companies do. When I became CEO, in my first board meeting, I showed them modeling that said if we could average between a point and a half and a half a point of margin every year, consistently, that would leave us exactly where we need to be financially—strong enough and healthy enough. We actually have a policy approved by the board of trying to target that range.
Plans for the future
RBJ: What kind of growth plans do you have for Lifetime and Excellus in the near future?
BOOTH: I’m excited to say we’re growing right now. We grew by more than 30,000 members in 2017, and we grew by more than 40,000 members on Jan. 1, 2018. So we’ve had over 70,000 members of growth in the last 14 months or so. That’s because of the strategy I just talked about, in terms of affordability leading to a very competitive price in the marketplace. The strategy of the company is to continue on that path and grow by working on the quality and affordability.
RBJ: What do you see as the biggest obstacles facing the industry in the next five years or so?
BOOTH: I hate to say it, but it’s government. In the sense of they keep changing the rules, and when you change the rules, there’s all kinds of implications to changing the rules, there’s lots of expense to changing the rules. We also have the budgetary constraints that can lead to difficulty making the programs work in the government program space if you don’t get the revenue that would support the cost for those programs. So I would say that the biggest potential concerns out there are government and government actions. Even now, it’s certainly unclear what’s going to happen with Obamacare over the next couple years. The individual mandate is gone now, and what else is next remains to be seen.
RBJ: Speaking of Obamacare, it’s still the law. Even though Republicans have promised to repeal it, it hasn’t been repealed, but changes have been made. Have those changes made it easier or harder for you navigating different rules?
BOOTH: I would say the most significant thing they’ve done so far is the repeal of the individual mandate and the implication of that over the long term. I don’t think in the short term it’s had much impact, but over the long term, the whole concept of the individual mandate was to try to get young, healthier people to buy insurance, and when they’re in that pool, it helps to keep the premiums more affordable, because you have people in the pool paying premiums that are not using services yet. If you only have sick people that are using services, the premiums are going to be a lot higher. I think, over time, you could see that individual marketplace become more expensive because younger people opt out of insurance because there’s no mandate any more. That’s a real risk to the individual marketplace.
RBJ: How difficult is it to try to anticipate rule changes that may or may not come, and be in flux for sometimes years at a time?
BOOTH: Given how health care has played out over the last couple years, where you had proposal after proposal, and you thought Republicans were going to pass a proposal and then they don’t, it is really hard to predict, and I don’t think that we’re spending a lot of time trying to predict as opposed to watch, monitor and jump in if developments, you think, are mistakes. One thing that is hanging out there that I think is significant are proposed regs on association health plans that basically would make it easier for associations to be formed for the purpose of buying insurance, and then buy insurance, it appears, across state lines. Which means, potentially, that an association in another state could be formed and then try to market in New York and not have the New York consumer protections, not have the New York mandates, not be subject to New York regulations. That reg, depending how that comes out, that has the ability to be a real disruptor.
RBJ: Is that something you’d make plans for before it happens?
BOOTH: We have a group of people that are working on, almost like a war games exercise—what would we do in response, what would others do in response, based on what others do, should we modify what we are going to do. We haven’t seen that outcome yet, but there’s a group of people in the company working on that one because that one is actually a live proposal.
RBJ: Has Excellus or Lifetime Health Care gotten involved in any efforts to shape what kind of health care laws this country has?
BOOTH: We are a BlueCross BlueShield plan; there’s 36 of them across the country, and there is a BlueCross BlueShield association, which is sort of the umbrella organization that licenses all of the plans, and they have a lobbying force, and that’s one of the purposes of the association, is to advocate on behalf of the BlueCross BlueShield plans in Washington, and the BlueCross BlueShield plans, collectively through the association, are a considerable voice in congress. A lot of policymakers look and ask BlueCross for opinions and policy decisions.
RBJ: Rochester is in a unique position, we have two very sprawling health care systems that dominate medical services provided in the region. What role have RRH and URMC played in shaping quality of care and access in the community?
BOOTH: We should be proud in Rochester of having a high-quality system, and that’s because we have two high-quality health care systems in this city. There’s a real benefit to having two strong systems in this community as opposed to a more fragmented system. I think we have benefitted and we will continue to benefit by having two strong systems, and having an academic medical center that does research and cutting-edge stuff.
RBJ: As an insurance company, does it make it easier having two big players rather than a bunch of smaller players?
BOOTH: I wouldn’t say it makes it easier for us. It probably helps on the quality side and the moving of the needle side of things. As we move to value-based payment, having big sophisticated systems that can do the work that’s required is key.
RBJ: The latter half of 2017, Rochester Urgent Care and Lifetime Health Medical Group were acquired by RRH and UR Medicine. These formerly independent institutions are now part of larger networks. What does that mean for Rochestarians now that everything is conglomerating into these two places?
BOOTH: I think that, from our perspective, it’s hard to partner when you’re also a competitor. Our group practices, while they served quite a few patients, were relatively small in the scheme of Rochester medicine. There was dynamic with competing with them and trying to partner at the same time. Secondly, just the nature of those health centers had changed over the years. They originally formed back in the 70s, federal government gave money to communities to create group model HMOs, which were HMOs centered around medical centers. If you joined the HMO, you had to go to the medical center for your care. That’s why we had those health centers; it was part of being an HMO back in those days. The problem was employers and members ended up not wanting to be tied to a medical center, they wanted freedom to go to any doctor they wanted and those HMOs fell apart across the country. We had those only because when the HMO went away, we didn’t jettison those centers and we felt they still met a community need.
RBJ: The Finger Lakes area has a 3.62 percent uninsured rate, 3.95 percent in upstate, 6.06 in New York, 8.58 percent nationally. What role does Excellus play in reaching that number?
BOOTH: We’re not claiming sole credit for it; it’s the nonprofit system we have in upstate New York. We don’t have for-profit hospitals, we don’t for-profit health plans in upstate New York. We have a nonprofit health care system, locally based, locally controlled, and it’s my opinion that that leads to community interest types of activities. We’re not out to maximize profits, the health plans or the health systems. They want to be financially healthy, but they’re trying to serve their local community. It’s a totally different dynamic than if you went to New York City or other places where the majority of the health insurance is for-profit, trying to maximize profits, and in many communities, the hospital systems are also for-profit. There’s lots of factors, there’s not one factor, but I think the nonprofit nature of upstate is what makes it different and, over the long run, has led to those kinds of results.
RBJ: Of course, those numbers aren’t good across the board. In Monroe County in 2014, the uninsured rate for those at or below 138 percent the poverty line was 16.1 percent. Has that number improved, and if not, how do you continue to improve it?
BOOTH: I don’t have the stats because I haven’t seen the most updated numbers, but I would expect that it should improve as a combination of Obamacare and what New York state has done. So, not only has there been the outreach on Medicaid and getting people who are eligible for Medicaid in Medicaid, they also added the Essential plan, which is the next level up from Medicaid in terms of income. You can either get free health insurance or you can get health insurance for $20 a month. My hope would be, when the statistics are out, that you will see that that number has improved.
RBJ: What are some of the barriers to improving insured rates in lower-income communities?
BOOTH: I think New York has a really good system in terms of eligibility and subsidization of health insurance. The population I’m worried about now is … those that have a higher income than the Essential health plan. The affordability of that in the long run, if there’s not the individual mandate, do we have, over time, a deterioration of that pool in the sense that healthier people opt out and it becomes a sicker population with higher premiums. I think that is a big danger going forward.
RBJ: How have you seen local health care improve for Rochestarians as a whole, for low-income, for middle-income, for high-income, and what do you think has helped achieve that?
BOOTH: If you look at the low uninsured rate here, that’s a reflection of pretty good access. There are exceptions, but we’re committed to serving all segments of the population. Medicaid being one, the poor; the Essential plan being the next tier up; and then the individual market, which is the next tier up. I think we’ve just got to keep working on it, work with our partners, the systems. There’s work to be done still.
Culture and community
RBJ: What are some of the corporate culture steps you’ve taken to keep employees engaged?
BOOTH: When I became CEO, that probably became my number one priority, and I probably spent more time on that any single other thing. And my conclusion was that the culture needed to improve for a couple reasons. With all of the changes that were going to happen in health care and all of the changes that we needed to make, change is hard. A lot of people come into a job and they’ve done it the same way for 10 years, 15 years, 20 years. They want to continue to do it that way, and we needed an employee base that was going to get up and say I believe in what the company is doing, and I want to help. And if you have a workforce that was motivated to help you, it was going to make things easier in terms of the transition. I also believe that we spend a good chunk of our waking time working. Why should it be a miserable place to work?
RBJ: What do you enjoy most about Rochester and living in Rochester?
BOOTH: I think the weather is spectacular. From spring to fall is just unbelievable, and I don’t think a lot of the rest of the country realizes how wonderful the summers in particular are in upstate New York. Even the difference between here and downstate New York is dramatic in terms of humidity in the summertime and temperature in the summertime. I also think there’s a lot of culture for a city of our size. There’s also great restaurants. This is a good place to live.
RBJ: What direction do you see this city taking in the next five years?
BOOTH: I think it’s pretty exciting what’s happening, and some of it’s happening right outside our window. So I think the transformation of downtown is critically important, but it’s happening, and it’s very exciting. We have a ways to go still in that transformation, but I think that what’s happening is great, and I’m very excited about where that will lead. If this is then a destination at night and there’s people living downtown and there’s shops and restaurants downtown, I think that will be great. Having come originally from the capital district and seeing Schenectady and what happened to Schenectady with the deterioration of GE over time, and what it did to that city, compared to what this city has been able to do with the downsizing of several major corporations, it’s phenomenal. People stayed. They could’ve all moved out, but a lot of people stayed and became part of smaller businesses, created new businesses. Rochester has done amazing at surviving that, and that I think is essentially over, and now it’s time for the rebirth and growth.