Karen Ignagni on EmblemHealth's Transition to Value-Based Payments
Karen Ignagni discusses taking over EmblemHealth and implementing a turnaround after the company experienced net losses of more than $485 million in 2014, as well as the healthcare industry's transition to value-based payment.
Transcript (slightly modified) What is the mental shift you had to make when going from running an association like America's Health Insurance Plans (AHIP) to running a business like EmblemHealth?
Well, the first thing is that this position gave me an opportunity to put into practice so many of the things we had been working on at AHIP. For example, for the last 3 and a half years, we worked very, very actively under the hood to deal with all of the regulatory and operations issues that needed to be done in terms of the exchange, making it workable, and making it effective in terms of its administrative performance.
So having a ringside seat for that, then coming here to have the opportunity to actually work with a superb group of people to actually put into practice the work we were doing to improve access, to improve affordability, it just was a real honor.
In 2014, EmblemHealth had net losses of more than $485 million. When you came to the company, what was your primary issue to begin a turnaround?
The primary issue was to develop a strategy to actually have the quickest, most effective turnaround we could execute, number 1. But at the same time, we didn’t want to solely be focused on the turnaround, the infrastructure, the reorganization we had to do and the reason I say solely is because there’s an innovation story here that I was so pleased to have found a group of people who have worked very, very diligently and actively to actually make Emblem the market leader in value-based, and I know we’re going to talk about that.
And what’s very exciting about Emblem is that we now have the opportunity to take another leap in terms of value-based, continue our leadership but continue our strong partnership with regulators, with our provider partners and with our customers ultimately.
CMS reached its 2016 goal for transitioning value-based payments 9 months early. Were you surprised at how early it reached the goal? And what does it mean for the rest of the industry?
I’m not surprised because I think that the whole healthcare system is changing now. Everybody’s gotten the memo that we have to move to a value-based system from a fee-based system. And providers, clinicians, hospitals are at various points on the continuum in terms of doing that. Our role as a health plan is to support their efforts wherever they are on that continuum so it’s not a one-size-fits all in terms of our strategy. It never has been, it will not be. It’s working with our provider partners to view them as partners, treat them as partners and provide the support they need to move along that continuum.