CEO Perspective

Dear friends:

I’m grateful for this opportunity to share a few thoughts about the critical challenges facing our state’s health care system and what we are doing to address them.

First, let me say we have a lot to be proud of in Massachusetts. We’ve led the nation in reducing the rate of uninsured; we have world-class hospitals, physicians, community health centers and research programs; our not-for-profit health plans are among the highest rated in the country for member satisfaction and quality; and we’re one of the top states for public health outcomes. But there’s still a lot of work to do.

Our health care system is stressed. Statewide, we don’t have enough primary care and mental health providers to meet the rising demand. Hospitals are experiencing staffing shortages and financial pressures from all sides. Many clinicians are frustrated and burned out. Breakthrough drugs and procedures are coming on the market with sky-high price tags that insurers, employers or individuals will have to pay, if we want access to these new and innovative treatments. Consumers and patients are too often confused, frustrated and let down by a lack of clarity, coordination and continuity in their care and coverage. Important questions are being raised about how health plans help to manage the cost of the care their members receive. And, there are far too many racial and ethnic disparities in who gets needed care.

These challenges aren’t unique to Massachusetts, but are compounded by the fact that our state’s health care costs are among the highest in the country. Spending on hospitals, physicians, and pharmacy services has been growing at the fastest rate in more than a decade, exceeding regional inflation and wage increases. Those higher costs are being passed on to individuals, families, businesses and every level of government, pushing aside other worthy priorities and making our state less competitive.

Our #1 priority continues to be affordability. At Blue Cross, our role as a health insurer is to spread the financial burden of health care costs across a large population – in our case 3 million members – so that individuals and families can get the care they need without facing financial ruin. We negotiate with hospitals, doctors and drug companies for the best possible price and pass those savings on to our members and employer customers.

What sets us apart from the growing for-profit sector in health care is that, as a tax-paying not-for-profit, we focus on creating value for our members, customers and communities, not shareholders. More than ninety percent of every premium dollar is spent on hospital care, physician services and prescription drugs, and our operating margin is less than one percent.

I’m especially proud of our market-leading work in improving access to mental health, women’s health and health equity, and we’re a leader in developing value-based care models that pay clinicians based on their ability to control total costs and improve quality. Of course, all of this is made possible by the extraordinary people who have chosen to work here.

Given the current environment, we don’t expect the cost pressures to ease off any time soon. So, in the coming year and beyond, we’ll be taking an even more disciplined approach to become more efficient in the running of our business, while continuing to work aggressively and collaboratively to slow the growth in spending for medical and pharmacy services.

How can the health care community unite around solutions? While there are a lot of open questions about how the Trump administration and new Congress will address key health care issues, we know that changes are coming. We’ll monitor and weigh in on the national policy debates as needed, but our focus will continue to be on what we can accomplish here in Massachusetts.

And there’s nowhere I’d rather be doing this hard work. The vast majority of health care stakeholders are patient-focused, community-oriented and mission-driven. Many of us have been collaborating for years to protect our status as the state with the lowest rate of uninsured residents. We’ve always known that affordability would be the hard part, and it certainly is.

Health plans, providers, pharmaceutical companies, employers, community leaders, lawmakers and regulators need to join forces behind solutions that address costs, quality, access and equity. We have to reinforce our shared interests and values, and identify, prioritize and resolve, wherever possible, our inherent conflicts. At Blue Cross, we’re committed to working with anyone and everyone to make that happen.

Thank you for your partnership and support.