PART Two

PROVIDENCE – When it comes to health care, one of the biggest problems, it seems, it is not just about figuring out a way to control the high costs but controlling the narrative – the flow of the information and data emanating from hospitals and government agencies, from legislators and insurers.

In PART Two of an exclusive, in-depth, interview with Martha Wofford, president and CEO of Blue Cross and Blue Shield of Rhode Island, ConvergenceRI asked questions about many of the biggest problems facing Rhode Island’s disrupted delivery of care system.

And, Wofford, in her candid answers and insights, provided a road map on how to achieve greater transparency – urged more accurate data about actual Medicaid spending, asked for better analysis about what are the true costs of drug research and development by Big Pharma, and recommended increased collaboration around sharing the data from hospitals and physicians when it came to medical spending.

Wofford’s prescription is a strong endorsement of transparency. What made the conversation that much more remarkable was Wofford’s willingness to engage with ConvergenceRI and to share her beliefs within the context of an interview, displaying a command of both the numbers as well as a confidence in her understanding of the dimensions of the ongoing disruption of the health care delivery system.

In PART One, the interview had ended with a brief discussion about the decision by the State of Rhode Island to award the Managed Care Organization contract to just two private insurers, UnitedHealthcare and Neighborhood Health Plan of Rhode Island, rejecting Blue Cross and Blue Shield of Rhode Island’s bid. [See link below to ConvergenceRi story, “One-on-one with Martha Wofford, president and CEO of BCBSRI.”]

ConvergenceRI had also brought up the abrupt decision by Providence Community Health Centers to lay off some 40 workers, mostly community health workers at the Health Center’s accountable entity facility in Olneyville, one of the state’s poorest neighborhoods, leaving many of the patients with the prospects of less access and less care.

Here is PART Two of the ConvergenceRI interview with Martha Wofford, president and CEO of Blue Cross and Blue Shield of Rhode Island, which took place in late July in the conference room at Your Blue Store on Route 6 in East Providence.

ConvergenceRI: How do you take a real-life situation and improve it? The poor patients are the ones who are bearing the burden.    
WOFFORD: I have a few thoughts. One, we are not in the Medicaid business. I would say, you and I share a goal to get facts on the table.

I am really proud of the partnership that we have developed with the hospitals to do data gathering. I think you probably saw that through the Rhode Island Foundation, who convened us; we did some work, that said: Let’s bring data to the table. Manatt was the consultant that they hired to do the work in. [See link to ConvergenceRI story below, “What it means to be a barometer of truth.”]

[Looking at] how does Rhode Island compare to other states, in terms of rates, because it is often discussed that we have much lower provider rates….

ConvergenceRI: [interrupting] …and it wasn’t true.    
WOFFORD: And it wasn’t true. What we found is that when you compare Connecticut, Massachusetts and Rhode Island, Rhode Island, on the inpatient side, which was the key area that we were looking at, although we looked at other hospital areas as well, is absolutely on par with the other states.

Now, this is on a Medicare relativity basis. So, that is a really important point. If I remember the numbers correctly, we’re at like 202 percent of Medicare in Rhode Island, and Massachusetts is like at 190 percent, and Connecticut is at 209 percent.

We’re in the middle between the two. On an absolute basis, the rates are higher in Massachusetts than they are in Rhode Island, and that is because the cost of living is different.

And so, there is a nuance here that is important. What I really want to do is this: I want to continue the data gathering.

Because we looked at half of the spend. Hospital spend is about 50 percent of spending for commercial. We didn’t look at physician spending; we didn’t look at pharmacy spending.

And, those are two really important areas to understand, to try and then say: What are some good policy areas that we should adjust?

And, then, with Medicaid. We need to actually get the data on the table. What are the Medicaid rates? 

I think if you saw the report that the Insurance Commissioner put out a while back on community services, what he found was that there were rates that had not been touched since 1993. So, there are some places where we are way behind, and possibly the investments haven’t happened.

It’s not to say whether Medicaid rates are high or low; it’s all these different pockets. We actually have to bring the data to the table so you can actually look at it. And then say, “Where do we need to address it?”

Because I would say, that, you know, it’s a three-legged stool in terms of reimbursements to make it work. We need Medicaid to pay near cost. We need Medicare to pay at least cost. And commercial is typically about double, right?

And so, right now, commercial is paying that much, but the providers are not that stable, because I think the Medicaid leg of the stool is really short. But we need to find out. What exactly and where are the places that there are gaps?

And then try to have the conversation, because we want that stool to be stable, because we all need access to the health care system.

ConvergenceRI: How do we make that data relevant and accessible to people, so that it becomes actionable?    
WOFFORD: I think that is a great question. And, I don’t even have access to it. So, people who are perhaps more used to looking at this type of data, you are asking about accessibility, for people to really be able to, The person on the street doesn’t understand…

Let’s even start with the data geeks like myself. We need to have access to the data to try and understand it; then we need to talk about how to make it easier to understand. Right now, it is not accessible. And so, I think we need to convene the next set of work to bring the data to the table.

ConvergenceRI: And, how do we do that? There was this big health care summit that Speaker Shekarchi convened. I got the impression that there were a lot of people talking at each other, rather than talking with each other.

And, there were a lot of questions that got asked that were dodged, from my perspective of being in the audience.

You may not have seen it that way. In my coverage of the summit, I focused on Optum.[See link below to ConvergenceRI story, “Bang the gavel slowly.”]

If we don’t talk about the role that Optum is playing, then a lot of this doesn’t make sense. If you are allowing a for-profit company with a very bad track record, in my opinion, which is Optum, and their role in the pharmacy scandal…

If we don’t talk about it, who is going to talk about it? And, the idea that any one leg of the three-legged stool is askew, if you are going to continually reward bad behavior. We need to know the details of what the actual money is on the table, and where it is going.    
WOFFORD: What I heard at the summit was also some consistency. I really felt like, if you think about the bigger health insurance companies, the big providers, we were all saying really similar things. I think what we were saying was: We’ve got some structural challenges in this state. We have a higher percentage of government funding than other states. And, some of those, like Medicaid, we believe to be disproportionately low.

And, we’ve got to figure out how to solve that. And, one of the things we need to do is make this state appealing to business. We need to grow more jobs here.

Because trying to get the Medicaid funding up is going to be important, because right now, we are leaving federal dollars on the table. And, we need to have a bigger percentage of the overall pie in commercial insurance.

It doesn’t mean that the rates should go up, if we had more people who have commercial insurance. And I don’t speak to that by saying, “Hey, we want more business.” Of course, that’s great. But I am talking about sustainability for providers.

You’ve covered this. The long-term care area, the sector is absolutely struggling. I think it’s six nursing homes that have gone out of business [in the last year]; you would probably know the numbers better than me. Structurally, we’ve got a problem.

ConvergenceRI: I agree; across the board, we have a problem. The hospitals, I believe, are not sustainable. Unless they can develop… I haven’t heard it talked about outside of ConvergenceRI, but Ortho RI has a partnership with South County Health, where they run an entire wing of the hospital.

OrthoRI has a non-hospital centric model that’s working. The enterprise just got sold to a private equity firm out of Connecticut. Their practice model has really been driving the market; it’s now outpatient surgeries that are driving the orthopedics.    
WOFFORD: It’s the same outpatient model that University Orthopedics is pursuing.

ConvergenceRI: Ortho RI has its own outpatient surgical center it built in Warwick in 2021…    
WOFFORD: I would say that the shift has happened on the orthopedics; it’s continuing to happen.

ConvegenceRI: My point is that there has to be a way to do this so it’s not “hospital driven.” And, no offense to Lifespan, I don’t know if their financial model is sustainable in the long run.

They need to come up with an entirely different business model, in my opinion, and you may be more aware of it than I am, but I don’t see them being sustainable over the next five years, because there is not the money to do it.    
WOFFORD: What I would recommend is sitting down Dr. John Fernandez [the president and CEO of Lifespan], and having that conversation.

ConvergenceRI: I would love to; apparently he won’t talk with me.    
WOFFORD: My vantage point on the hospital system is that we’re really fortunate to have both Dr. Fernandez and Dr. Mike Wagner [the CEO and president of Care New England] running those organizations. And, they both have done a lot of really good work to put those health systems in much better financial standing than they were, and to have clear, strategic plans.

So, I think they are in good financial shape. I can’t speak to the five-year view for Lifespan, but I don’t think it is as dire a situation as people perceive, and, certainly as it was. And so, I have a lot of respect for the work that both of those leaders are doing to try and stabilize the situation.

ConvergenceRI: I have respect for Dr. Wagner, who was willing to sit down and talk with me recently. [See link below to ConvergenceRI story, “When convergence works, and silos get broken down.”]

I don’t practice gotcha journalism. I believe I am very fair in my questioning. In my opinion, Lifespan seems to be continuing a decade of bad behavior. Even though I approached Dr. Fernandez personally, he said he did not wish to be interviewed, after I was not invited to the big Brown/Lifespan news conference. And, I admit, I got angry about that.

It’s difficult. I am trying to do my best to report accurately and honestly about what is going on. Someone recently called me “the barometer of truth.” I’ll take that as a compliment any day of the week.

My question, back to you: How can I do a better job? What are the things that you would like to see me report on? What are the topics that I can shine a light on to help you in rebalancing the three-legged stool?    
WOFFORD: I am interested in the issue of Medicaid rates. So, if that is something you feel you can make some progress on, I think more transparency there would be really helpful. My sense is that we actually need some analytic work to be done, by people who have access to the data.

ConvergenceRI: Like what Manatt did for the Rhode Island Foundation? 
WOFFORD: They looked at commercial payment to hospitals. But, I think we need work on Medicaid payments, beyond just hospitals. Being the data geek that I am, I think of it like a pie chart. For commercial, half of it is hospital. We have some insights there now.

We don’t have insight into the other two pieces, which is about one-quarter – the pharmacy spend and the physician spend. So that piece of work needs to be done. And then, on Medicaid, we just have anecdotal information.

I think the Insurance Commissioner’s Office did work on community-based services.

ConvergenceRI: I did a news story on that. [See link below to ConvergenceRI story, “New OHIC report recommends $45M increase in Medicaid provider rates.”]

The problem, as I saw it, is that they had to base their reports on fee for service, because that it is what the Legislature told them to do, and they couldn’t go beyond that.

I believe they now have the authority to go beyond that. I agree with you. Until we have an accounting of where the money goes, it’s hard to say how the money is being spent.    
WOFFORD: Yes. I think we need more insight there. But I don’t know if it is a reporting issue as much as we need some data reporting to come out, so we can all see the data.

ConvergenceRI: Let’s talk about pharmacy.    
WOFFORD: You know how passionate I am about the challenge of pharmacy costs.

ConvergenceRI: Yesterday I was reading the STAT newsletter, and they were claiming that it was the middle people who are profiting from pharmacy – the pharmacy benefit managers, which once again, comes down to Optum, which it turns out is one of the largest pharmacy benefit managers.    
WOFFORD: I don’t think they are the largest. I think Express Scripts and CVS/Caremark are the two largest, And then, Optum is the third. I think they are the big three. But I think Optum is the smallest of the three.

ConvergenceRI: Small?    
WOFFORD: Of the big three? I think Optum is the smallest, but I would just say, if you ask the Pharma companies what their profit margin is, I think it is an interesting question. I think it is 70 percent.

Are there lots of flaws with the PBM business model? Yes. Like the big three and how their business practices [are run], I think that there are a lot of challenges, and a lack of transparency,

We are part of Prime Therapeutics, which is a pharmacy benefits solution company that is transparent. So, I am big believer in being able to see the flow of dollars, and I think that is something that the big three PBMs are not.

I think there are a lot of problems with them, but I would also say: look at the Pharma companies, look at what is happening at GLP-1’s [the anti-obesity drugs] right now, look at the pricing of those. [One is] a thousand dollars a month here and just $95 in France; it’s not about the cost of the drug. The profit-margins that Phama is enjoying are incredibly high.

So, I don’t think we need to point at the PBMs and say, “They are the problem.” I would say that, for Rhode Islanders, the cost of prescriptions keeps going up. And, it’s not sustainable. And so, we have figure out a way to bring those costs down.

And so, I think writing stories about the outrageous costs that people are experiencing are is really helpful, because it is an ongoing challenge. We’ve had a 43 percent compound annual growth rate in costs of specialty drugs over the past five years. It’s just not sustainable for people.

And these are such expensive drugs. We are the cost-sharer for these drug. And they are really, really high. And, we have to figure out a way to address it. We’re doing a lot of things we are excited about, and we are proud of, and it’s really, really hard to make progress.

And, I look at the Pharma companies, and I think about how we get beat all the time on the lobbying sector. And the fact that you think now that it is the middle man and the PBM…

ConvergenceRI: No, no, no, I didn’t say that. I was saying that STAT, owned by John Henry and his wife, think that. I don’t know whether I buy the prejudice that John Henry brings to the table.  
WOFFORD: Fair enough.

ConvergenceRI… and the Boston Globe…    
WOFFORD: I’m just saying that, it’s now part of the conversation; it’s the PBMs. That’s the result of Pharma doing a masterful job of pointing the finger.

I would say that what people don’t understand about Pharma, [when Pharma claims], “Oh, if you bring down the cost, how are you going to fund R&D?” Well, they [Pharma] spend more on advertising than they do on R&D.

I think we need to find a way as concerned citizens to bring as much transparency to the costs on the pharmacy side. Because it is the only way that we can try to bring costs down for people.