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Tuesday, May 28, 2024

Blue Cross CEO travels the state, marks a big political win

Dr. Tunde Sotunde became CEO of Blue Cross Blue Shield of North Carolina on June 1, 2020, in the middle of the pandemic. It was six days after “the killing of George Floyd” in Minneapolis, he adds.

Lockdowns restricted travel for the next year, inhibiting Sotunde’s ability to see North Carolina after spending the previous 15 years mainly based in Atlanta. But in June 2021, he kicked off the Extra Miles Tour with a goal of visiting each of the state’s 100 counties.

Tunde Sotunde

Two years later, Sotunde — who is a native of Nigeria, Howard University-trained pediatrician and veteran health insurance executive — has attended meetings in 72 counties from Cherokee and Clay in the west to Pasquotank in the east. In each location, Blue Cross organized gatherings with key business, nonprofit, education and healthcare leaders. (Sotunde says he’s behind schedule but will visit the other 28 counties too.)

No one suggests the touring is a primary reason that Governor Roy Cooper and lawmakers Tim Moore and Phil Berger agreed on a regulatory reform plan to aid the biggest N.C. health insurer. But a statewide listening tour couldn’t have hurt the effort, which easily passed the N.C. General Assembly despite opposition from Insurance Commissioner Mike Causey, Treasurer Dale Folwell and Durham consumer activist Martin Eakes.

“We have been the only one subject to decades of laws and regulations that don’t allow us to run our business to the benefit of North Carolinians,” Sotunde says. The new law “enables us to remain sustainable as a mission-driven, not-for-profit in a hyper-competitive landscape.”

Previous efforts to loosen state oversight of Blue Cross have failed because of concerns that transferring some of the company’s $4.6 billion in reserves to another entity would not benefit policyholders or the state. Critics say the change will mainly enrich company executives or outside investors, should the company go public.

This time, Blue Cross won the ability to establish a parent holding company that gains flexibility, but promised to remain focused on serving North Carolinians. “We have no desire to convert to public ownership, to be sold or to be acquired,” Sotunde says. “We have no desire to lose control.”

Blue Cross says it needs fewer shackles because it faces an increasingly competitive market led by larger for-profit rivals such as CVS Health, which owns Aetna; UnitedHealthcare; Humana; and relatively new entrants such as Walmart and Google.

Sotunde notes that 10 companies now offer N.C. health insurance plans for residents eligible for the Affordable Care Act (Obamacare), versus three rivals about five years ago. Likewise, the number of Medicare Advantage companies has doubled in that period, he adds.

Asked if Blue Cross can stay competitive versus much bigger companies, Sotunde is confident. “Absolutely, if we have the flexibility. We have great competitors and I say bring it on. All we have asked for is a level playing field. And we are the hometown team.”

As for the statewide tour, Sotunde cites several key lessons he learned.

    • Affordability and access are major issues, particularly in more rural areas. “We’ve got a lot of work to do.”
    • Medicaid expansion is an important step to add coverage for 600,000 residents.
    • The social drivers of health “have obviously gotten worse during the pandemic.” He cited housing support, access to proper food and transportation, workforce development and women’s health.
    • Community colleges play an essential role in training nurses, medical assistants, EMS workers and other health care occupations. “The good news is we have one of the largest community college systems in the country. We ought to strengthen it.”
    • “There is a health care workforce crisis. It’s going to be a tsunami. We, the baby boomers, are going to need more care.” In response, Blue Cross is partnering with the N.C. Medical Society, community colleges and other groups to boost the labor supply. Programs include subsidizing loan repayment plans for doctors and other health care workers who pledge to work in rural areas.
    •  Expanding the roles of “community health workers” is an important goal. “People trust who they know,” he says.

Blue Cross has membership of about 4.4 million people, employs 5,000 and had revenue of $10.9 billion in 2022. It reported net income of $36 million, with claims and medical expenses of about $9 billion.

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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