a16z Podcast: How to Pay for Healthcare Based on Health

Sep 6, 2019

Patrick Conway, former CEO of Blue Cross Blue Shield North Carolina and a pediatrician deeply involved in the value-based care movement, reveals how healthcare can transition from fee-for-service to value-based models. He discusses the impact of social determinants like food insecurity on health outcomes and suggests innovative financing solutions. Conway also shares insights on navigating complex U.S. policies and the critical role of technology in driving change. His firsthand experience offers a unique perspective on reforming the healthcare landscape.

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ANECDOTE

Food Insecurity Costs

Conway treated a child hospitalized for failure to thrive due to lack of food, costing $40,000.
He argues feeding the child for years would have been cheaper and highlights the backwards nature of the system.

INSIGHT

Long-Term ROI in Healthcare

Long-term ROI on social determinants is crucial but difficult for high-churn payers.
Policy changes, like longer Medicare Advantage cycles, could incentivize long-term investments.

ADVICE

Effective Healthcare Policy Advocacy

Focus on policy proposals that improve the entire healthcare system, not just self-serving interests.
Present data and personal stories to policymakers to illustrate the impact of proposed changes.

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There's been a lot of talk about the need for our healthcare system to shift away from volume and fee-for-service, where you pay by appointment, procedure, etc, to value-based care, where you pay for both quality and outcomes—essentially, good health. But there's also been a real dearth of seeing how that might work in action, or concrete models for how to implement it at scale. In this episode, CEO of Blue Cross Blue Shield North Carolina Patrick Conway dives deep into how exactly we can make the move towards this kind of healthcare a reality, in conversation with a16z's General Partner Jorge Conde, Venkat Mocherla and Hanne Tidnam.

Conway—also a pediatrician, and formerly Deputy Administrator at the Centers for Medicare and Medicaid Services (CMS) and Director of the Center for Medicare and Medicaid Innovation (CMMI)—gets into what value-based care really means; different ideas for how payors can implement the shift away from fee-for-service and volume-based care towards outcomes; as well as the critical role social determinants (food insecurity, transportation, and more) play in our health—and how tech can be a driver of change. And finally, Conway shares thoughtful analysis from an insider’s point of view from the Hill on how to actually effect change in policy and regulation in healthcare to move the entire system in this direction.

This podcast was recorded on April 10, 2019. As of September 25, 2019, Patrick Conway is no longer CEO and President of Blue Cross Blue Shield North Carolina.

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