Soaring to New Health · 2026-07-16 · 42 min
Key moments - from our scoring
Substance score
66 / 100
Five dimensions, 20 points each
Managed care organizations are caught between rising operational pressures and shrinking margins, with Pennsylvania's Medicaid MCOs facing a particularly tight funding environment dictated by state budget appropriations rather than market forces. Victor Fields brings 15 years of managed care experience spanning behavioral health, special needs populations, and D-SNPs, while Joe Glinka provides direct visibility into Pennsylvania's fragmented system where 26 hospitals have closed and 46 changed ownership in five years. The episode explores how organizations like Highmark Whole Care are responding to simultaneous challenges: post-pandemic Medicaid disenrollment, drug cost inflation (particularly GLP-1s and specialty pharmaceuticals representing nearly 40% of spend), siloed data systems across medical, behavioral health, and long-term services domains, and accessibility gaps in 16 rural counties. The speakers emphasize that successful execution requires deep member understanding, operational discipline (HEDIS measures, NCQA standards, health risk assessments), and strategic infrastructure investments - Highmark invested over $50 million in platform interoperability during the pandemic. For MCO executives and plan administrators, this episode clarifies the gap between strategic intent and operational reality, and why engagement metrics often differentiate high performers from struggling peers.
Medicaid MCOs operate under state-determined capitation rates set by the Department of Human Services budget appropriation, not competitive pricing. Combined with aggressive trend costs in inpatient, outpatient, pharmacy, and dental, and nearly 40% of spend driven by pharmaceutical costs that MCOs don't control, margins have compressed to under 1% or negative 0.9% as of 2024.
The primary concern is that disenrolled members are becoming uninsured rather than enrolling in state exchange plans like Pennie, because subsidies are limited. This creates a public health risk as uninsured individuals delay care and then present in emergency rooms at higher acuity.
Transportation coordination is consistently underestimated: beyond distance to providers, plans must account for pickup time, wait times between appointments, meal access, and the need to maintain member independence across coordinated Medicaid and Medicare benefits - particularly in rural areas.
They systematically measure member data (creating information, not just collecting data), develop targeted disease management plans based on that analysis, and critically, measure member engagement to close the communication loop rather than simply tracking outreach completion.
HR1 legislation passed in 2025 will change eligibility requirements. MCOs must coordinate with states to implement new eligibility rules, identify members who drop and return (typically sicker due to care delays), and manage the resulting cost and complexity impacts.
Our reviewer’s read on each dimension, with quotes from the episode.
The episode delivers substantive operational insights specific to managed care - funding constraints, HR1 implementation, data fragmentation in tripartite systems, and the acuity problem post-unwinding. However, much of the discussion stays at the strategic level ("funding is the lifeblood," "meet members where they are") rather than drilling into novel mechanics or surprising findings that would surprise an experienced operator. The specifics on transportation coordination, GLP-1 cost management, and capitation rate dynamics are valuable but familiar to the sector.
in the Medicaid space, Pennsylvania is what I would call a trif market where you have separate managed care domains for physical health or medical health, uh, behavioral health, and then long term services and supports
in the last five years in Pennsylvania, 26 hospitals have gone under. Uh, another 46 hospitals have been, have experienced ownership changes
The episode recycles familiar managed care playbooks: the importance of engagement, data-driven disease management, using AI/chatbots for member communication, and infrastructure investment. The "platinum rule" framing and the notion of "responsible growth" are presented as insights but are conceptually conventional. The discussion of policy-execution mismatch is timely but not deeply original; the tension between legislative pace and operational reality is widely acknowledged in regulated industries.
we want to know you, we want to guide you, we want to care about you. But most importantly, we don't want to fail you
treat others the way they want to be treated. And when you ask someone how they wish to be treated
Victor Fields brings 15 years in managed care with hands-on leadership at multiple health plans and special needs expertise; Joe Glinka sits as plan administrator and trade association chair. Both are practicing operators with direct P&L accountability and real-time policy engagement. They are not pure thought-leaders or consultants - they are in the trenches managing Medicaid and D-SNP. This is solid practitioner caliber, though neither commands the national stature of a C-suite exec at a top-5 plan or a regulatory figure.
I have spent the last 15 years in managed care, first in North Carolina with a behavioral health plan
I have the privilege of the director of the, or the plan administrator for Pennsylvania
The episode contains useful specifics: 3 million health risk assessments at Highmark, 26 hospitals closed in 5 years, 46 ownership changes, margins at -0.9%, 16 of 27 counties rural, 750,000 Medicaid renewals under HR1, specialty drugs now 50% of pharmacy spend (up from 20% a decade ago), 7 cents administrative cost per dollar. However, many claims lack supporting data (e.g., "6 plus percent increase in pharmacy costs" cited without year-over-year comparison or sample). Broader statements about member propensity, outcomes, and no-show rates are asserted without numbers.
At Highmark, we have over 3 million health risk assessments
Today it's over 50% of pharmacy costs, just the specialty drugs
The hosts ask solid setup questions and allow guests to elaborate, but rarely push back or probe contradictions. When Joe mentions margins at -0.9%, no follow-up on how the plan remains solvent or what the break-even threshold is. When transportation is identified as a pain point, no challenge on what Highmark has actually solved vs. what remains unsolved. The conversation reads as a well-organized panel rather than investigative dialogue; hosts accept assertions like "we've invested well over $50 million" without asking for validation or context. There is limited genuine disagreement or uncomfortable questioning.
Victor, before we jump in, congratulations on the new role. Uh, can you share a little bit about your journey
Well Dan1 know that we are measured every single year
Computed from the transcript - who did the talking, and the words that came up most.
Managed care organizations are navigating increasing complexity as policy changes, funding pressures and rising member needs reshape the healthcare landscape. In this episode of Soaring to New Health, Highmark Wholecare leaders Victor Fields and Joe Glinka discuss the operational realities facing Medicaid and D-SNP organizations and what it takes to execute successfully in today’s evolving environment.
Transcribed and scored by The B2B Podcast Index.
Speaker A: Welcome to this episode of Soaring to New Health, focused on evolving the healthcare experience for our people, our communities, and our clients. Whether you work in the healthcare industry or are a client or friend of Prospire, you're sure to learn something new when you tune in. This podcast series will cover a wide range of topics, from health disparities and how to address them to the latest regulation changes and how to navigate them to the future of healthcare and how it affects your organization.
Speaker B: Welcome to Soaring to New Health. I'm Chris Mladenovich here with my co host, Dan Krogan. Today we're talking about the state of managed care in 2026 and the growing gap between strategy and reality across Medicaid and dual special need plans. Managed care organizations are facing rising market complexity, tighter margins, and increasing stakeholder expectations. More than ever, successful health plans are defined by their ability to execute at a high level. We're excited to be joined by Victor Fields, president and CEO of Highmark Whole Care, and Joe Glinka, Director of Pennsylvania Health Choices. Victor. Joe, thanks so much for being here.
Speaker C: Victor, before we jump in, congratulations on the new role. Uh, can you share a little bit about your journey and what brought you to Highmark Whole Care?
Speaker D: I have spent the last 15 years in managed care, first in North Carolina with a behavioral health plan similar to those that are here in the state in the Commonwealth, then went on to the district working with, uh, children with special needs. And prior to Highmark Whole Care, I
Speaker E: was in Minnesota leading a health plan that had special needs D. SNP and
Speaker D: so excited to be here and looking forward to our journey together.
Speaker C: Yeah, well, thanks for sharing that. They're lucky, uh, to have you. A lot of great experience coming into Highmark Whole Care, uh, since you joined, what stands out the most about the environment in managed care, and, and, uh, the way that they're operating right now.
Speaker D: What has stood out to me is
Speaker E: since the unwinding of Medicaid after Covid,
Speaker D: we've seen just a steady decrease in individuals enrolled. And so being able to connect with them, engage members, because that's what primarily
Speaker E: managed care organizations do, we engage members.
Speaker D: Um, and so with those shrinking roles, we find that it's even more challenging to do education. And that's why we're here doing today's podcast, because the more we can educate the populace, the better off we are in ensuring those most, um, vulnerable receive
Speaker E: the services they need.
Speaker C: And since you joined as well, has anything surprised you early in your tenure? Whether it's operational, culturally, or from a leadership perspective?
Speaker D: I wouldn't say surprised. I've been coming to Pennsylvania for years. My grandmother lived in Reading, so as a kid I used to come here for the summ. But you really appreciate the variety and
Speaker E: diversity that exists in the Commonwealth.
Speaker D: You know, from the western counties all the way to the east, from south to the north. And we serve primarily populations in two zones of the five zones, uh, southwest,
Speaker E: as well as Lehigh Valley capital.
Speaker D: And even within each of those zones
Speaker E: you get, um, a different variety. Uh, for those communities, you have rural, you have urban.
Speaker D: Um, and so I've come to really
Speaker E: appreciate the electric here in the Commonwealth.
Speaker B: So, Joe, as you talk with MCOs across Pennsylvania, are there common challenges or themes you're seeing emerge, regardless of size or market?
Speaker F: Yeah, there are many. Uh, I'm going to come at this from a Medicaid lens because that's my primary responsibility with Highmark Whole Care. And in Pennsylvania being our largest market, I have the privilege of the director of the, or the plan administrator for Pennsylvania. But yeah, there are numerous, uh, challenges and common themes that plans are experiencing. You know, the lifeblood of any business is funding. Uh, funding is at a premium. We live in a very, um, I'd say a unique funding environment. Whereas we as Medicaid managed care organizations, Highmark Whole Care certainly included, we don't tell Pennsylvania how much it's going to cost for them to buy us. Uh, we're at the mercy of a state budget process and based on what is appropriated to the Department of Human Services, that is going to then cascade downward to dictate what the plans are going to be, um, awarded in terms of a capitation for the upcoming year. And it's basically, here's what you're going to have and do the best you can with it. So it's a very compelling financial environment across the board. Our competitors, uh, as well as we are experiencing aggressive trend costs across multiple domains. That would include inpatient, outpatient, pharmacy, uh, dental, vision and so forth. I mean, these, um, there are costs that we can have some control over, but there are a lot of costs that we don't have control over. For instance, pharma is one. We don't set drug pricing yet. It's nearly 40% of our spend in the, in the Medicaid space. Uh, we're seeing an increased acuity across our members, uh, where members need more and more services. Uh, and that's a common theme across all plans. There are data sharing limitations in Pennsylvania. In the Medicaid space, Pennsylvania is what I would call a trif market where you have separate managed care domains for physical health or medical health, uh, behavioral health, and then long term services and supports. And um, in the highmark whole care experience we are always focused on holistic care. Uh, but that goes beyond just medical. You know, there's a behavioral health component to everybody and that, that component really has an influence on whether or not a person's going to comply or adhere to a care management plan. Um, comorbidities across that street, so to speak, do influence one another. So when you have challenges from a data sharing standpoint, it makes it very difficult to get to the true holistic care that we're, that we're striving for. Um, we have the HR one that's on the horizon, that's on everybody's minds. There are requirements coming up uh, for that legislation that was passed in 2025 at the federal level. Uh, so we're uh, in preparation for its uh, implementation. And then I would just say accessibility to care too is always on our mind. We have a very challenged population. Uh, it has been clearly documented that the poorer people are, the um, worse they perform. From a health care standpoint, even with equal access to care. It's all about access. And what we're seeing in Pennsylvania right now, especially in a rural context, is some real challenges. Uh, of the 27 counties that we serve, 16 uh, of them are considered rural. So we've got to make sure that we can accommodate our members from uh, getting them to the providers in a timely and relevant way in order to get their.
Speaker C: There's a lot happening across managed care right now. Policy shifts, operational changes, pressures, workforce challenges, um, changing member needs. And it's all kind of happening all at the same time too. As you look at this year in 2026 and you can even start broadly, what's the biggest differences between 2026 compared to the previous years?
Speaker F: In the last five years in Pennsylvania, 26 hospitals have gone under. Uh, another 46 hospitals have been, have experienced ownership changes. And uh, what that does that can have a destabilizing effect when it comes to the availability of hospitals throughout the Commonwealth. So we've got to make sure we, we make the money work and try to spread it as much as possible to get people to care. We need um, I can also say that probably within the last 12 to 18 months we've seen a decline in enrollment across all managed care organizations. We're no exception to that. We're still trying to get our finger on what some of the primary drivers are to that um, but our question is, if they're coming off of Medicaid, where are they going? Because, um, although Pennsylvania does have a state exchange called penny subsidies are few and far between there. So if you have someone who's dismissed from the Medicaid program and you don't have affordable options in the state exchange, you have people who are uninsured and uninsured people tend to take care of themselves or they delay care again. Now when they present, it's most likely going to be in an emergency room and you have a bigger problem to solve for it. Just increase the overall cost of the healthcare platform.
Speaker B: Where are you guys seeing most of the pressure operationally? And uh, as a follow up to that, what are some of the organizations and MCOs doing out there to react to those pressures?
Speaker D: Chris, that hits at the center of some of the many, many changes that Joe previously mentioned. And so each of those changes drives an implementation plan that then increases the complexity. Um, I talked about earlier our need to educate in communication. So, uh, just, uh, this past summer, with the implementation of HR1, the requirements around eligibility will change again. And so how will we work with the state to share those new requirements? How will we work with counties with reestablishing eligibility? How we will then, uh, identify those who have dropped and who come back, uh, who tend to be sicker when
Speaker E: they come back because they didn't get care.
Speaker D: How do we manage that? And that's part of the rising cost. So the complexity that we're seeing from these pressures, eligibility being one high cost of drugs that Joe mentioned, all you have to do is turn on your television and you'll see some of the specialty drugs. Um, there has been a great effort by the Commonwealth to address GLP1s.
Speaker E: Um, they implemented that for calendar 26.
Speaker D: We are seeing, um, the benefits from those changes ensuring that those who need
Speaker E: that medication are receiving it.
Speaker D: Um, so those are the challenges. It comes into the implementation with the amount of changes. The second piece of your question, the structure from a few years ago as AI has come on board, how we communicate with, um, newer generations. So snail mail just isn't what it used to be. And it was, you know, four and a half percent at best response rate. And so how we're able to use, uh, sms, how we're able to use other vehicles, uh, to communicate with members and that contributes to our ability. And so AI, whether we're using, um, chatbots today or not, are ways that we have to continually evolve to meet
Speaker E: and communicate with members.
Speaker D: Because again, at the fourth Forefront managed care plans.
Speaker E: We need to engage members.
Speaker D: And so we always are thinking with whatever the implementation of the new regulation,
Speaker E: how are we going to engage the member?
Speaker F: If I could just add a couple things too. I totally agree with Victor, But I wanted to come back again to the funding because, uh, it is the lifeblood of the business. HMA reports that, uh, in 2024, margins fell to under 1% or less than a negative 0.9%. And, uh, that is significant because, um, you know, when you think of an insurer or a managed care organization talking about margin, uh, what we do with that margin is we end up reinvesting it back into our organization to bring greater value. And we've never forgotten about who's really paying the bill for organizations, uh, like high. It's the taxpayers. And so we've got to be able to offer value in that context. Uh, I would also say one of the other things that we wrestle with is when we're subject to procurement. And, um, in Pennsylvania, we've been involved in procurements. Oftentimes procurements are protested and they delay the implementation of the upcoming contract. And it's very difficult to prepare when you're held in limbo. And you don't exactly know how we're going to proceed forward, uh, based on how long the protests go. So, uh, that is something we have to be nimble, uh, on and be able to pivot. Uh, I would also say that one of the things that we're facing is an intensified oversight, uh, of regulatory authorities, uh, and really a higher standard that plans are being held to. For instance, in Pennsylvania, uh, we have the opportunity to qualify for, uh, performance, um, incentives, provided that we achieve certain performance metrics per the Department of Human Services, uh, and rightfully so, they are now raising the roof on that. I mean, the posture is, and we agree with this, that incentives should not be expected. They should be earned. And we'll do everything we can to earn. But it does compel an organization to make sure you have the right people, the right processes in place in order to be able to stretch and, uh, achieve those ends.
Speaker B: Yeah, those. Those procurements cost a lot of money in terms of dollars and time.
Speaker C: When we think about specifically Medicaid and D. SNP populations, the coordination required is incredibly complex. Victor, you were just discussing a lot of the complex, the complexities required for this population. Um, where do organizations tend to underestimate the operational work that's involved when managing these populations?
Speaker D: Well, I think one of the challenges, because D. SNEP deals with our More mature members, they have ongoing needs, uh, they're not able to do what they used to. And um, so transportation becomes the one
Speaker E: of the first things that gets escalated, that's needed.
Speaker D: And I was just talking with the provider group and the challenges of coordinating transportation and their outcomes are driven by their ability to have make those appointments. If the no show rate is higher, then that impacts their ability to receive
Speaker E: the care that they need and that adversely impacts the uh, outcome.
Speaker D: So we were talking about how, you know, in some cases the transportation gets them there early in the morning, 9, 10 o', clock, it's not picking them up until, you know, three, four o'. Clock. So what happens for grandma, for her
Speaker E: to receive lunch that day?
Speaker D: And so we were solutioning around that because um, the d. SNP population is a population that has both Medicaid and
Speaker E: medicare and it's the Medicaid portion that pays for their medical care.
Speaker D: And we want to make sure they retain access. Uh, Joe talked about the number of
Speaker E: rural counties that we serve and that further complicates the transportation.
Speaker D: Um, it's not just the time and
Speaker E: distance to get them from the member's
Speaker D: home to the provider. It needs to also consider the amount
Speaker E: of time and distance that the transportation takes to get to the member and back.
Speaker D: And so it adds a level of complexity but nothing that we can't solve for. Uh, when I also think about the um, decent population, we also are wrestling with maintaining independence. And I learned from some folks a few years ago, it's not the golden rule, treat others how you would want
Speaker E: to be true treated, but it's the platinum rule. Treat others the way they want to be treated. And when you ask someone how they wish to be treated and then you're
Speaker D: able then to understand what does independence
Speaker E: look like for them so that they've
Speaker D: been admitted to the hospital, they now need to be discharged, do they get stepped down to a long term, uh, acute facility, do they go back in the community, do they go home, that they go home with the wraparound services that they need, do they need them for a short period of time, do they need it for a longer period of time?
Speaker E: And that coordination between their Medicaid benefits and their medicare benefits are important.
Speaker D: So as an mco, uh, we're paying attention to that. And I think as long as we think about it in terms of the
Speaker E: platinum rule, we'll get it right.
Speaker D: But when we don't and we think about process,
Speaker E: we won't meet the needs of our members.
Speaker B: From the member perspective, where do organizations have the greatest opportunity to improve the experience?
Speaker F: My experience at the plan, uh, has been extensive. My first 10 years, 10 and a half years, I actually signed people up on our plan and I got a bird's eye view of that. So I would say that from a member perspective, um, as far as breakdowns, it's not being able to meet them where they are if we don't meet. And that's always been part of our mantra at heimer, Cold care, to meet the member where they are. And it's not just a tagline. Why do we do that? Because the more we understand about our member, the more we're going to be able to work with the providers that are serving them, actually rendering the care to tailor a care management approach that's unique to them and also conducive to their compliance. Um, so, uh, as far as um, as well as other potential um, breakdowns, communication gaps, I mean over the course of time, Highmark Cold Care, through its member experience, UM team has communicated benefits of this plan through a language line in over 100 different languages. Uh, you'd be surprised at how many different languages and that's just in Pennsylvania. So we have a very diverse population, um, completing timely information that's not only on renewals, uh, which are done annually or semi annually, depending on what population we're going to be talking about in Medicaid, but also even when it comes to cases of appeals and grievances. A uh, lot of times appeals and grievances cases wouldn't get to that point if all the information was provided up front and it would have had that transportation, uh, challenges. I mentioned those before from the member experience. If you can't get to not only a provider, if you can't get to work, if you can't get your kid to daycare, you can't get to work, if you can't get to a food bank, you don't have um, access to wholesome ah, food as well as a grocery store. You're living out of a convenience store which is not going to be conducive to a healthy lifestyle. And then provider access issues as well. I mean those are things that are very near, uh, and dear to the UM plan, um, members, um, art from our experience.
Speaker C: Well there's obviously a lot of focus on outcomes and member experience as we talked about now the platinum role. Um, but behind all of that there must be operational discipline. Right. So what do organizations that execute well tend to do differently from those that struggle in this area?
Speaker D: Well Dan1 know that we are measured every single year.
Speaker E: There are HEDIS measures, there's capsules, surveys,
Speaker D: and those are paid attention to, and those are actually available for the general
Speaker E: public, um, by ncqa, uh, the first
Speaker D: with the HEDIS measures and how we're trying to show that best M practices
Speaker E: are implemented and that gets measured of how well we're doing against those HEDIS measures. So what are those that are doing it differently? What are they doing? Well, they're taking the data and they're actually creating information.
Speaker D: And how do we do that? Well, at Highmark, we have over 3
Speaker E: million health risk assessments. And so you take that knowledge and
Speaker D: you understand, look, uh, alikes, you know, polychronic conditions, rising risk potential members, and
Speaker E: you're able to then identify best practices, disease management.
Speaker D: And so the organizations that are doing
Speaker E: it well, they're starting with the base data, they really understand their members and
Speaker D: what story they're seeing, and then they're
Speaker E: enacting plans to address it.
Speaker D: So is it a population that has, uh, diabetes? And we know that they're. There are lots of solutions out there today, but we still have an inordinate
Speaker E: number of Americans living with, uh, type 2 diabetes and not with an A1C below 8.
Speaker D: So it's not only just knowing how many, it's what we're doing and what
Speaker E: I've seen the better organizations doing.
Speaker D: So one, they measure. Two, they create plans. And I think a lot of us have plans.
Speaker E: Three, they do outreach. But usually the missing element for those that perform best is engagement. Have they measured and see that the members have been engaged? Because when the members engage, that means that communication loop is closed, right?
Speaker D: You communicate, you make suggestions. Because at Highmark, you know, we're now describing, we want to know you, we want to guide you, we want to care about you.
Speaker E: But most importantly, we don't want to fail you and to engage you into a level so that we understand where
Speaker D: you are, as Joe said earlier, meet you where you are, we then have
Speaker E: that ability to guide and care and, uh, not fail you.
Speaker D: And so that's what the better ones
Speaker E: do because they engage, engage. And that's that metric that I think we're focused on to differentiate Highmark Cold Care from others in the space.
Speaker B: Gentlemen, one thing we talked about throughout this season of Soaring to New Health is the tension between growth and operational readiness. Organizations want to grow, they want to expand capabilities and move faster, but operations still must support this growth. How do leaders balance those sometimes conflicting goals effectively?
Speaker D: The challenge that you're trying to allude to, uh, I think, Chris, is where do you invest?
Speaker E: And that investment in your infrastructure, that investment in people.
Speaker D: Right.
Speaker E: People process technology and data.
Speaker D: So our ability to make investments in highmark whole care, uh, during the pandemic,
Speaker E: invested well over $50 million in its platforms. The, those investments actually enabled us to have interoperability with other platforms. And so that's how you balance. How do you grow but build capacity? Uh, one of my prior plans, uh, we were building a platform, and we
Speaker D: were intentional in building that platform so
Speaker E: it could support the entire population of
Speaker D: the state, not just our membership, because we had no idea when or what would happen in the future.
Speaker E: And because we designed it that way,
Speaker D: when the state asked us to merge and absorb two other organizations and we
Speaker E: tripled in size, we retained that capacity.
Speaker D: So as leaders, I always say to, uh, those that I mentor, as a leader, you're going to have to help the organization. See around the corner is not what's
Speaker E: in front of us today, but it's
Speaker D: what's around the corner. And so those investments that are in your infrastructure, that expand capacity, those investments in your people so that they have rewarding career opportunities, ultimately pay off because you're able to meet the needs of your customer. In our case, it's the Commonwealth and
Speaker E: it's the members of our health plan.
Speaker F: I would say being part of a large organization too, the growth, uh, opportunities are going to differ. Uh, in a commercial setting, you may have a, uh, national account that comes on board that has thousands and thousands of people that need to be served from a member experience standpoint. And so you got to be able to scale in order to be able to serve and make sure it's a remarkable, uh, experience is what Highmark stands for. But in the Medicaid space, uh, the growth tends to be a lot, um, more measured and deliberate. Unless, of course, there's upheaval in the selection of plans through a procurement where you may have a plan to exit and now whatever their enrollment is going to be looking for new plans. Um, so, um, in either case, we're always going to be identified. Do we have enough people? Because it takes time. You got to identify your candidates, you got to onboard them, you got to trade them even before they're ready to serve the greater good. And that takes time. Uh, so no matter what the growth is, we're always looking at, um, at that from that perspective.
Speaker C: Yeah, from, from our lens, in our business, what you guys are describing, we call responsible growth. Do you think that some organizations are moving faster than their infrastructure? Can realistically support. And when growth outpaces that readiness, what usually starts to break first?
Speaker E: Well, what usually breaks first is communications.
Speaker D: Right.
Speaker E: You always have to be mindful of what your communication plans are. Your customer can accept that you have challenges, um, but if you can't communicate that. And so what we saw during the pandemic, with continual enrollment, we saw nationally Medicaid rolls grow from 68 million to over 93 million. That's 25 million people. And as a percentage, that's over 35% growth. And so now immediately, and this, during the pandemic, you had, um, vaccinations for Covid, you had additional lives covered. Some states rolled out the expansion population. So here you have these market changes occurring.
Speaker D: And so what you have to be able to say to your membership is, here's what we're doing and, and give them a reasonable expectation. Now, why does it break whatever it
Speaker E: is that doesn't work out the way planned.
Speaker B: Right.
Speaker D: And your culture as an organization about to plan, to study, to react, and
Speaker E: your ability to re engineer on a continual basis, so that continual improvement means you shorten that window each and every time that it takes for you to recover. And so that then builds credibility when you're talking to members, when you're able to say, we weren't able to deliver
Speaker D: this time, but here's what we're doing
Speaker E: about it and here's why. And an example I'll give is one
Speaker D: of my prior plans did not get
Speaker E: out their, um, membership cards at the beginning of the year. There was a printer issue, a vendor issue, but ultimately we're responsible.
Speaker D: And so there were members who were going out, going to their providers, needing to provide it. It's January, their updated cards, they didn't have them. And so the accountability to say, here's what went wrong and here's when you're going to get your card and then communicate to the providers to say, here's what's happened, here's when they're going to get their cards.
Speaker E: Reduce the swell that would happen if you're silent. You have to communicate. You cannot be silent.
Speaker B: There's obviously a lot of policy movement happening right now across Medicaid and D. Snp. Um, what operational implications do you think organizations may be underestimating as they respond to policy and funding changes?
Speaker D: I think what they underestimate something that
Speaker E: we alluded to earlier, and that's the ability to have a sustainable plan without reasonable funding. And there's a bunch of guidelines around this, whether the rate adequacy which there's federal guidelines, um, but I love what our actuary says. You ask three actuaries, you get five opinions.
Speaker D: Um, and so the challenge around funding
Speaker E: to align with, with those policy changes. Cause inevitably you make a policy change, it's going to impact utilization, it's going to impact, uh, enrollment and, or it's going to impact cost. And ultimately we need those three actuaries
Speaker D: to help us figure it out. What will that do to the overall program cost and then have it to be funded. So, uh, what many states are asking
Speaker E: now, including the Commonwealth, is with the
Speaker D: changes in eligibility and the potential for potential loss in enrollment, there will be
Speaker E: over $2 billion of lost revenue by the Commonwealth.
Speaker D: What can they do to retain that
Speaker E: membership and what can they do to supplement that lost revenue?
Speaker D: And as an industry, we've offered many, many suggestions.
Speaker E: We actually, uh, through our trade association, had over 75, presented 20 of them, uh, directly to the Department of Human Services and Highmark, uh, directly communicated several
Speaker D: others, trying to address how can revenue be retained? Because there's a tax that the Commonwealth was able to charge hospitals and MCOs that they will no longer be able to collect to credit towards their contribution. So the Commonwealth will have to make that up. And so we have come back and said, here are some options. Well, now here's some other policy changes. And so with the, uh, HR1 eligibility requirements, we have learned from the unwinding, um, that those that are retained are sicker. And because they're sicker, that higher acuity, they have higher medical costs. That higher medical cost means if we're going to have a financially sustainable program,
Speaker E: it needs to be funded so we
Speaker D: get compensated on what's called a capitation rate per member per month. And so if we get reim, we get reimbursed, say, $600. Well, that was based on the acuity
Speaker E: of a thousand people. Well, when 800 people remain, those 800 on average are sicker than the thousand, because it's usually the healthy 200 that leave not the sickest 200, as you can probably appreciate, because they the need.
Speaker D: And so we again have to get
Speaker E: those three actuaries in a room and
Speaker D: ideally come up with, uh, maybe two recommendations and we monitor that change. So funding is, I loved how you phrased the question is as important as
Speaker E: the policy change that gets made, because we gotta put the two together to make a viable program within the Commonwealth.
Speaker C: Sometimes those policy changes happen much faster than organizations can operationalize them. Where do you see the biggest disconnect between the policy direction and the Execution,
Speaker F: uh, reality, I would say it's in the expectations of regulators and the legislators believing that things can happen quicker than what reality would clearly dictate. I'll uh, give you for instance right now, Victor had mentioned HR1 um, which is federal legislation is what's going to impact the number of times that those who are on Medicaid expansion have to get renewed over the course of time. It also has co pay implications and so forth. But the renewal of over 750,000 Pennsylvanians on medical assistance is going to put a strain on the actual renewal process because you still have another 2.3 million people who are going to go uh, through the process annually. You have a cohort that's going to go 750,000 going to go through it twice a year.
Speaker B: So.
Speaker F: And the complement within the county assistance offices throughout the Commonwealth is not nearly 100%. It's more like in the mid-80s. So this is added workload on to a uh, working complement that's going to be more challenged in terms of keeping pace. We also have, you know, with respect to how that takes flight, um, there will be exceptions and people will not have to fulfill a community engagement or a work requirement because they're medically frail. There are many codes that can help uh, indicate the frailty of an individual that would preclude them from the requirement. We're still wrestling going back and forth. The state is, I should say with CMS as far as defining what those codes are. And the interim final rule they came out with respect to community engagement has a response time. This all takes effect 11 of 27. So when it comes to defining the codes, when it comes to defining how mc, what, what other uh, processes will MCOs have to provide information to their state regulators so decisions can be made. What's the format of that data? What's the cadence? You just don't put together technological ramps like that in a week or two. It takes time. You have to test them and so forth. So it's the pace of play, you know, which uh, you know you have a federal government that's saying that this needs to happen. States have the opportunity to file good faith waivers if they're making a good faith effort to get an extension Federal government's already communicated to states. Don't even try it. So that is, that's a significant thing, uh, that just comes top of mind for, for me.
Speaker D: So Dan, as you can see, Joe is very knowledgeable and, and I must compliment Joe that he has uh, not only lended his expertise to Highmark Whole Care. But he's on, he's the chair of our trade association. He's on what's called the Mac. The Mac is the vehicle that the Department of Human Services is using to um, pay attention to the community and the advocates around HR1. And so he's ensuring that Highmark Holcare stays at the table and is a valued partner. Partner, uh, with the Commonwealth, with the Secretary Arkoosh and her team so that we make this as seamless as possible to the participants in the Medicaid plans.
Speaker B: As you guys look ahead over the next six to 12 months, where should managed care leaders really be focused?
Speaker D: Well I hate to sound like we're being repetitive but we just talked about
Speaker E: the implementation of HR1.
Speaker D: So let's about talk. Just, just take that for what it's,
Speaker E: for what it is because we've talked about it.
Speaker D: I think over the next 6 to 12 months you what we hear, especially when we're in Harrisburg, we hear cost
Speaker E: of care and we hear access and impact of outcomes.
Speaker D: And with the rising cost, especially the
Speaker E: medical Trends now in 26 also being another double digit year, how do we help the Commonwealth deal with the rising cost of health care?
Speaker D: We have made suggestions that are programmatic obviously but we are constantly evaluating. And so I Talked about those 3
Speaker E: million health risk assessments that Highmark uh, has uh, in the marketplace I talk about best practices around disease management. Um, but our pharmacy costs are rising. And though the Commonwealth address GLP1s that
Speaker D: help bend that cost curve, we're still
Speaker E: seeing a 6 plus percent increase overall in our pharmacy costs.
Speaker D: So the um, GLP1s are down but
Speaker E: the others are still up.
Speaker D: And I remember 10 plus years ago when specialty drugs were roughly 20% of pharmacy costs.
Speaker E: Today it's over 50% of pharmacy costs,
Speaker D: just the specialty drugs. Which means that overall pharmacy costs are
Speaker E: growing as a percentage, uh, as our overall medical spend.
Speaker D: So there are great innovations that are occurring but we have a rising cost. And over the next six to 12 months, months as we look at potentially limitations on revenue because of the implementation of the things in OB3, this rising cost comes in direct conflict.
Speaker E: And so our understanding to uh, make
Speaker D: it a financially sustainable program, we're focused
Speaker E: not only on the policy changes but also on funding.
Speaker D: So that's what we're looking at over
Speaker E: the, the next six to 12 months.
Speaker F: The only thing I would add is really um, looking at the productive and responsible use of AI. You know we are managed care organizations. We're not just paying uh, claims payers we're actively engaged in our provider community to make sure that our members have what they need when they need it. So you know there's a risk in the insurance business when you're taking care of folks, you're paying claims and so forth. And it's okay to look at the here and now, but what we're really focused on is what's the emerging risk look like, who is next, who can we meet upstream, tame the cost trajectory earlier where you can save costs and have someone not get to point X based on what we're seeing in their, in, in their data. So um, being able to leverage those tools appropriately and, and with, with rigor, uh, so that we can reach the conclusion we need to reach in a timely way.
Speaker C: If we fast forward three to five years, what do you think successful managed care organizations will look like operationally?
Speaker D: Uh, I think they'll be technologically enabled.
Speaker E: I think uh, we're seeing it across many industries. What's happening? Uh, we talked about generative AI, but
Speaker D: in addition to improved technologies, I think what we're going to see in the uh, more so on the three year horizon probably than the five year horizon
Speaker E: is how we keep this still a human business.
Speaker D: Because ultimately of the 3 million lives
Speaker E: that are covered by Medicaid in the Commonwealth, we are dealing with individuals and
Speaker D: our ability to effectively incorporate new technologies.
Speaker E: But keep that human touch will be
Speaker D: extremely important for us and we are
Speaker E: constantly evaluating how we manage their care.
Speaker F: I couldn't agree more that the uh, technological leverage is going to be a ah, huge emphasis moving forward. And that suggests to me that um, administratively we're going to be leaner as an organization. We've seen it happen thus far. Uh, the proportion of our dollar that we spend on administrative costs is about 7 cents on the dollar. And when you're looking at a medical loss ratio in the 90s, it doesn't leave much for margin to reinvest back into the organization. I believe organizations will be uh, striving to understand their, for instance things like their member propensity to only actually engage in care, you know, so we can work on through motivational interviewing and to motivate behavior to do that, um, we need to be able to accurately capture relevant health factors that will dictate a person's future path. So we can be prospective in our approach. Um, an example of um, one of the tools I think that's going to be prominent is ambient listening. We see it in a hospital setting. We're also going to be using it in a care management setting that frees up administrative time for a care manager to actually manage care rather than take notes and be caught up in that administrative uh, uh, function. And then I think uh, one of the things we need to do as well is create consumer friendly tools to actually empower people to engage in their own care. Realize, you know, we've got limitations in every population, including Medicaid, but there are plenty of people who are highly engaged in their, in their healthcare path and we want to be able to provide them tools to be able to do that.
Speaker C: And ultimately what's going to separate the organizations that thrive from ones that struggle?
Speaker F: Uh, a couple things and it might sound like, well, jeez, that's so obvious. But I think an organization's ability to pivot based on conditions that they're operating within, market developments, industry developments, uh, organizations need to be able to do that uh, and do that responsibly. And then they also need uh, to have the courage to make changes when it's necessary. Necessary. It's very easy for an organization, a family, an individual to be mired down in this is the way we've always done it. And that type of mindset is not going to allow uh, an organization to thrive, uh, as it continues to evolve in whatever industry it's in.
Speaker B: Victor, Joe, thank you both for joining us today and sharing your perspectives on where managed care is headed and what organizations are navigating operationally right now. Really, really appreciate the conversation with you
Speaker C: guys and thanks to everyone listening. Be sure to subscribe and follow along and keep Soaring to New Health that
Speaker A: concludes this episode of Prospire Soaring to New Health podcast. Don't forget to tune in to the next episode. To find more information on our hosts, guests or Prospire services, or to listen to previous episodes of the Soaring to New Health podcast, please visit www.prospire. soaring to new Health was produced by Prospire and Big Science pods. Please visit bigsciencemusic.com for more information.
Other episodes covering the same guests and topics, from across The B2B Podcast Index.
Cash Pay From the Pharma Manufacturer Point of View, With Ophelia JohnsonRelentless Health Value · on GLP-1 medications86 / 100
#288 Why Great Companies Lose Their Way After Going Public with Eric Ries Author The Lean StartupGrowCFO Show · on GLP-1 medications84 / 100
Kal Wahab, Chief Administrative Officer at Oregon Health and Science UniversityThe Risky Health Care Business · on Medicaid managed care84 / 100
Extreme Heat’s Impact on Healthcare Use and SpendingA Health Podyssey · on Medicaid managed care83 / 100
Ben's Den LIVE! at Fuse 2026 | AI in Healthcare: Beneath the Frothy SurfaceBen's Den · on HEDIS measures82 / 100
Ep. 101 - Virtual Physical Therapy Was Written Off as Impossible. Ashok Gupta Proves It’s Not.Working Healthcare · on Rural healthcare access81 / 100Stars as a Protection Strategy72 / 100From Strategy to Scale: Why Growth Breaks Without Execution
Behavioral Science: Why Good Ideas Fail in HealthcareCompliance as Infrastructure, Not OverheadBeyond Healthcare