The Payer's Compass: Insider Strategies for Digital Health Partnerships

Welcome to Architect Health’s The Front Door Newsletter! In this newsletter, Architect Health’s Co-founder & CEO, Sohum Shah, interviews healthcare executives, founders, and experts on healthcare innovation, digital health, and preventative care. The goal is to identify pain points in these spaces and paint visions on how to address them, inspiring decision makers at traditional healthcare organizations.

Today’s eleventh interview features Oliver Wyman alum and former Chief Strategy Officer of Blue Cross Blue Shield of Massachusetts, Sukanya Soderland. Sukanya expounds on digital health partnerships, opportunities for innovation, and strategic insights on payer trends.

Interview Key Takeaways:

• Digital Health Integration: The pandemic transformed digital health from a novelty to an essential component of healthcare delivery. Health plans should prioritize its integration to offer tailored, high-quality care options for members.

• Value-Based Care Synergy: Digital health and value-based care models are naturally intersecting, creating potential for win-win scenarios by incentivizing proactive care management and long-term health investments.

• Point Solution Curation: Health plans should aim to combat point solution fatigue by carefully selecting and integrating best-of-breed solutions that address specific member needs across their healthcare journey, acting as an "air traffic controller" to optimize the member experience.

• Vendor Selection Criteria: When evaluating vendors, health plans should generally focus on four key areas: strategic fit with enterprise priorities, operational feasibility, economic value (including ROI and cost considerations), and risk management (including data governance and security).

• Long-Term Enrollment Strategy: The concept of long-term enrollment could drive value-based care by aligning incentives for sustained health investments, potentially starting with Medicare demonstration projects or employers with highly tenured populations.

As a reminder: Architect Health is hosting a Healthcare Hackathon in Chicago on November 7th alongside Drive Capital, J.P. Morgan, and Cofactor AI. If you’re a healthcare leader interested in joining, please sign up here.

Listen to the Podcast:

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Sukanya Soderland is the former Senior Vice President and Chief Strategy Officer for Blue Cross Blue Shield of Massachusetts (BCBSMA), the largest private health plan in Massachusetts and one of the largest independent, not-for-profit Blue Cross Blue Shield plans in the country. Blue Cross’ mission is to show up for everyone like they’re the only one. The company guides members to the exceptional healthcare they deserve, affordably, equitably, and seamlessly, and is consistently rated among the nation’s best health plans for member service.

Sukanya, in partnership with the company’s management team, was responsible for developing strategies that will drive Blue Cross’ overall direction and achieve the company’s business goals. She also led data analytics, business performance and process improvement, and innovation.

Sukanya joined Blue Cross in 2018. Previously, she was with Oliver Wyman, where she served as a senior partner in their health and life sciences practice, co-founded the Oliver Wyman Health Innovation Center, and was the lead health care partner in Oliver Wyman’s digital, technology, operations and analytics practice.

Sukanya is a frequent speaker in national forums on health care transformation. She serves on the board of the Trustees of Reservations and the board of museum advisors for the Museum of Science. Sukanya holds an MBA from Harvard Business School and graduated magna cum laude from Harvard College.

Career Journey

Sohum: Sukanya, both of us started our careers consulting at Oliver Wyman. Tell us about your journey into healthcare, your work at OW and how that evolved into you leading strategy at one of the largest Blues plans in the country?

Sukanya: My journey into healthcare was serendipitous. My focus in high school and college was on initiatives with social impact. I studied sociology and economics during my undergrad years and worked with the non-profit Seeds of Peace. It was not until my sophomore year that my interest in business emerged. I was conducting research on the power of public-private partnerships as a volunteer research assistant for Professor Rosabeth Moss Kanter at the Harvard Business School. In interviewing leaders of both sectors, I was struck by the learnings that the private sector could offer to the public sector, and vice versa. I continued to work with Professor Kanter on other projects and on my undergraduate thesis, which further sparked my interest in business and led me take a role with Oliver Wyman upon graduation.

At OW, I started my career in consulting to a range of industries before joining the then fledgling Health and Life Sciences practice. It was a lot of fun building and growing that practice both organically and through acquisitions, and co-founding Oliver Wyman’s Health Innovation Center. The premise of the work with the innovation center has been to reduce the innovation diffusion gap in health care – I call it connecting the “islands of innovation” with the “mainland” where most of healthcare lives today. When the opportunity arose to join Blue Cross Blue Shield of Massachusetts, I saw it as an opportunity to have a greater impact on the field. BCBSMA is the largest health plan in Massachusetts and has a history of accomplishments in influencing access to care and innovations in value-based payment models.

Digital Health Evolution

Sohum: How has your view of digital health changed over time, pre pandemic versus post pandemic? And looking at your crystal ball, what does the future hold in store?

Sukanya: Pre-pandemic, digital health was more of a novelty, with interesting innovations that were on the fringe. COVID-19 created severe access challenges and brought digital health to the forefront. Now, it's considered tablestakes, with widespread expectations for digital access to health services.

Looking ahead, I see further integration of digital health into both traditional and alternative healthcare systems due to severe supply-demand challenges, rising financial pressures and costs, and advanced technologies like AI. We'll likely see hybrid care models emerge out of necessity, with younger generations driving demand for convenient digital solutions and senior populations increasingly looking for care solutions to support aging in place. Digital health will also facilitate novel curative therapies in biopharma and address a growing interest in alternative, holistic care approaches.

Digital Health Integration

Sohum: Blue Cross Massachusetts recently announced its partnerships with Oshi Health and Virta Health. How does digital health fit into Blue Cross Massachusetts’ long-term mission and transformation? What challenges do you face?

Sukanya: BCBSMA’s mission is to “show up for everyone like they're the only one.” To achieve this, we aim to build trust with our members, guiding them to the right care, at the right place, at the right time and price. Understanding our members on a multidimensional level is crucial to recognizing their needs and earning the right to reach out to them and help them in the moments that matter.

Digital health helps us offer high-quality, high-value options tailored to our members' needs. We are invested in knowing our providers well to ensure that they meet our standards for quality, equity and experience. One of the biggest challenges in digital health is driving engagement and adoption. We're identifying key moments, such as a member losing a PCP who may be retiring, being diagnosed with a chronic condition, or other major life events, to build goodwill and trust, ultimately establishing long-term relationships with our members.

Point-solution Fatigue

Sohum: The concept of point solution fatigue has been voiced consistently across payers, providers, and even patients. What approach has Blue Cross Massachusetts been taking to address that?

Sukanya: Point solution fatigue is widespread. There is no shortage of places where the healthcare system breaks down, and over the last decade, entrepreneurial founders have teamed up with capital partners to create an enormous array of promising point solutions. However, many of these offerings are sub-scale in terms of adoption and they are often not well integrated with the rest of the system. Blue Cross aims to curate best-of-breed solutions that offer strong evidence on outcomes and seamless integration, which many customers value. Large group customers often choose their own vendors, as advised by their brokers or benefits consultants. We accommodate these preferences and enable proper integration.

Our aim is to act like an air traffic controller, with the benefit of a meta-analytics engine to optimize across various point solutions, so that members can access what they need, when they need it, across their entire healthcare journey. The industry is moving towards platforms that tailor to specific member needs and preferences, aiming to optimize outcomes and improve their overall experience.

Vendor Selection Criteria

Sohum: What are the most important criteria Blue Cross Massachusetts has when deciding to work with third-party solutions and vendors, especially those providing digital health solutions? What prerequisites would you suggest to companies planning on selling to plans today?

Sukanya: We use four primary criteria: strategic fit, operational fit, economic fit, and risk. For strategic fit, solutions must align with our enterprise priorities which are connected to key outcome pillars: affordability, quality, experience, and equity. The clinical evidence and vendor proof points across each of these pillars are assessed by a cross-functional team of subject matter experts and vetted against needs our customers express. For operational fit, we assess implementation feasibility, including the impact on our IT resources and other subject matter experts. Regarding economic fit, we evaluate the ROI, testing the financial and actuarial impact of stated returns and considering both upfront and ongoing costs, especially in relation to IT infrastructure and cloud-based solutions. For risk, data governance, security, and the vendor's certification and track record are crucial.

Prerequisites for vendors include understanding our priorities to tailor their value proposition effectively. We are often looking for “two-fers” and “three-fers” – initiatives that allow us to achieve meaningful results across more than one KPI/outcome with the same use of existing resources. Prerequisites also include demonstrating good sales pitch hygiene. This means clearly identifying the problem, linking it to our business priorities, showing proof of results, and points of differentiation from competitors. Vendors should also outline the integration process and timeline, costs, resources needs from BCBSMA, and expected outcomes to streamline decision-making and avoid delays.

Digital Health and Value-based Care

Sohum: Digital health and value-based care are two of the most talked-about advancements in modern healthcare. Where do you see a natural intersection between the two? Can value-based care arrangements drive the adoption of digital health and vice versa?

Sukanya: Yes, I see a definite intersection. At its core, digital health introduces new ways of delivering care, while value-based care payment models focus on paying for care differently, rewarding value instead of volume, and incentivizing long-term investments in preventive care and effective chronic care management. These two can be symbiotic, as value-based payment models provide a runway for digital health companies that aim to help individuals manage care more effectively and proactively. Over time, there is an opportunity to help predict and prevent acute events and lessen the severity of health episodes to help improve people’s health and cost trajectory.

With the right adoption and integration of digital health solutions supported by value-based payment models, a win-win-win-win scenario can be created for plan sponsors, payers, risk-bearing providers, and patients.

Innovating on Long-term Enrollment

Sohum: SCAN Health Plan CEO, Dr. Sachin Jain, published an article on Forbes last year about value-based care and the issue of frequent member changes. Dr. Jain credits you with the concept of long-term enrollment. Tell us more about your perspectives on how long-term enrollment can drive value-based care, how a future shift towards that system could be approached, and what it might look like.

Sukanya: Sachin's article explains it well, and I’m not the only one with this idea. The premise is that value-based care focuses on long-term investments for preventive and chronic care management, rewarding outcomes over volume. The current issue is that most interventions that can bend the disease curve and medical cost trend don’t show actuarially verified returns within a year, which is how they’re usually assessed, due to our in-year benefit cycle. This is further complicated by member churn across health plans and employers.

Many lifestyle changes, like diet, sleep, stress management, and exercise, which are crucial for reducing healthcare costs, don’t yield immediate results. For example, reducing someone's weight significantly in a year can lower their risk of a major heart event a few years down the line. We need incentives to support these long-term benefits.

If we could shift from an in-year to a multi-year benefit design model, we could create better incentives, including consumer incentives, which are currently underutilized. This would align all parties to make the right choices for future benefits. For instance, CMMI could run demonstration projects in Medicare, influencing both Medicare Advantage and the broader market. On the commercial side, a defined contribution model, similar to retirement benefits, could be explored through ICHRA.

This change likely won’t happen overnight due to regulatory and statutory challenges, but there’s potential for multi-year models. Pilots could start with Medicare through CMMI or with employers having highly tenured populations. This approach could lead to significant investments and better member engagement and accountability. Offering clear, opt-in programs with personalized protocols and incentives could motivate members to achieve health milestones, receive rewards for progress, and use benefits in ways that matter to them.

Blues Ecosystem Support

Sohum: How does Blue Cross Massachusetts receive support from the Blues ecosystem? Putting your consultant hat on, how might smaller, independent, state based or regional plans approach innovative technologies or strategies without the support of a Blues like ecosystem?

Sukanya: Blue Cross Massachusetts benefits significantly from the Blues network, which includes 115 million members nationwide. This ecosystem offers several advantages. First, members have access to the Blue Card network, allowing them to utilize coverage in other states, often with better pricing and extensive provider networks. Second, there's strength in collective policy and advocacy. For example, many Blues plans are focusing on disparities in maternal health equity, leveraging the collective power of the network to address critical issues more effectively.

Third, the network facilitates investment in future-facing capabilities that might be challenging to develop independently. A prime example is Synergie, a company formed to improve contracting for medical benefit prescriptions like infusions and injections. This initiative helps manage the rising costs of drugs, including expensive cell and gene therapies. Similarly, EvioRx, another company developed by five Blues plans including BCBSMA, aims to reimagine the prescription drug supply chain and deploy value-based pricing through real-world evidence.

For smaller or regional plans not part of the Blues network, there are alternative strategies to access similar benefits. They can partner with other national health plans to gain network access, as seen with Point32 partnering with UnitedHealthcare. They can also join industry associations like AHIP for advocacy support.

From a future-facing capabilities perspective, regional plans might collaborate with like-minded venture capital or growth equity firms to co-develop solutions at a reduced cost in exchange for adoption across their business. These partnerships can bring innovative solutions to market while benefiting from advantageous pricing and shared development costs. This approach is somewhat akin to what General Catalyst is pursuing with their health assurance transformation effort, but more focused on the payer side.

Member Engagement Secrets

Sohum: BCBSMA is consistently rated among the nation’s best health plans in prevention, equity, and treatment. Providing a plethora of care options and health benefits is only beneficial and effective when members can access them. What is BCBSMA’s secret sauce in engaging members?

Sukanya: First and foremost, it is our associates who are engaging our members on a daily basis and having had the benefit of listening to their calls on a monthly basis, it's really remarkable. They're incredibly empathetic, kind, resourceful. They are working with members who are oftentimes at their most vulnerable point.

Dealing with the healthcare system when you or a loved one is sick and in need can bring you to your breaking point. It’s a complex system to navigate, and our associates are working across multiple screens and applications, to manage upwards of thousands of workflows. They’re there to try to ensure peace of mind for our members. So, hats off to our associates for all of what they do on that front.

Upcoming Healthcare Trends

Sohum: What are you most looking forward to for the end of 2024, going into 2025? What are some changes or trends in healthcare you are most excited to witness?

Sukanya: What I'm most curious about is what is going to happen with the Medicare Advantage landscape. As we know, Medicare Advantage has been a major growth arena for most health plans. There's a silver tsunami age wave of folks aging into Medicare on a daily basis. With the right Medicare-specific operations and focus, it has been an attractive marketplace for health plans. The penetration rate of Medicare Advantage is as high as it's ever been with an average one out of every two Medicare eligible Americans choosing Medicare Advantage.

Yet, the landscape has shifted, with CMS's lower rates, with escalating medical utilization, the rising bar of requirements for achieving four plus Star status, and the associated quality bonus payments - which are big revenue drivers for a lot of health plans. I hope the industry will continue to find ways to best meet the health and financial needs of seniors in the coming years.

Architect Health is a digital health aggregator, navigator, and vendor manager that makes it easy for health plans and their members to access virtual-first care solutions. Architect optimizes health plan RFP processes in a consolidated and comprehensive platform, reducing admin burden and costs. This helps health plans realize digital health cost savings opportunities - up to a 7x ROI. Architect's Digital Health Quality Index has vetted and scored thousands of telehealth solutions on efficacy, company reliability, and health equity. Co-founders Sohum Shah and Sidd Hariharan have deep expertise working with health plans and have built care management programs and aligned technology for Humana and BlueCross BlueShield. Architect Health is backed by Drive Capital, Entrepreneurs Roundtable Accelerator (ERA), Cherrystone Angel Group, Plug and Play Ventures, Service Provider Capital, and strategic advisors.

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