New Marketplace 2015

From Health Care Provider to Payer: One Executive’s Perspective

Interview · February 2, 2016

After decades in academic medicine and management, Harold Paz, MD, MS, left his position as chief executive officer of the Penn State Hershey Medical Center and Health System in 2014 to become chief medical officer and executive vice president at Aetna.

He sat down with NEJM Catalyst’s Thomas Lee, MD, to talk about the perspective he has gained in his new role.

Thomas Lee: What’s different about your new place in the health care system compared to where you were in the past?

Harold Paz: Clearly, there are some real differences. In terms of my role, I left being CEO of a large health system and medical center and dean of a medical school. I held these types of responsibilities for around 20 years; prior to being at Penn State, I was dean of Robert Wood Johnson Medical School and CEO of the medical group there.

The role of chief medical officer [at a health insurance company] is a different role, but it’s one of tremendous opportunity to focus on strategy, quality, and medical policy, through the lens of scientific and clinical data. It is an exciting time to think about ways to create an innovative health experience for all of our members.

Clearly, the roots and origins of Aetna are in insurance — it is for-profit, and this is the first time I’ve worked for a public company. But there are many remarkable similarities. Aetna is committed to the same mission we had when I was leading Penn State’s health system, which is to build a healthier world. One of the reasons I made the move is that I think there are enormous opportunities to form collaborations, partnerships, and new organizational structures between physicians and hospitals, and payers.

The world is evolving such that these relationships will continue to grow and succeed as we move toward value-based health care design and reimbursement structures away from fee-for-service medicine. I think there are going to be unique opportunities for a company like Aetna to better enable physicians address the health status of their patients and the communities in which they live and work.

Lee: What strategic advice would you give to those leading health care delivery systems?

Paz: The most interesting thing about making the move from running a large health system to joining Aetna is the opportunity I’ve had to work on new technologies and approaches to care that are developing through innovation. Aetna Clinical Innovation and new start-up companies are offering new ideas that are quite different than the traditional approach to patient care delivery and even the traditional the doctor / patient relationship.

With the influx of big data, new technologies, personalized medicine, the emphasis on community-based care, and understanding how determinants of health impact health status, we will see a rapid transformation in the U.S. and globally in health care delivery overall. Frankly, at times, working in a traditional health care setting, it is possible to miss how these emerging technologies and approaches are going to radically change the way care is delivered.

Further driving this will be worsening shortages of clinicians along with an aging population and increased burden of chronic disease with population growth. All these factors will exacerbate already limited access to care — and will ironically open the door to other approaches of care delivery that we’re only beginning to appreciate and understand.

Lee: What does it take for health care mergers to produce value in the marketplace?

Paz: Without a doubt, health care in America is moving from what Paul Starr described years ago in his book, The Social Transformation of American Medicine, as a cottage industry to something very different, and it clearly parallels what’s happened in other industries in this country. Frankly, that’s not surprising. I think our focus has to be how we can take a multidimensional view of improving health and health status in our communities, and it has to be done by looking at all five determinants of health.

Health care is obviously a critical one. But social determinants of health, socioeconomic status, genomics, the environment, are all important. They all come together within communities and affect each individual patient in multiple different ways. The inevitable benefit of all the changes we’re seeing, both on the payer’s side and the provider’s side, are new and innovative models of care delivery focused on populations and communities where payers and providers work collaboratively to improve access and quality and eliminate waste in the system. Of the three trillion dollars that we spend on health care in this country — which is just one of those determinants of health status — roughly one-third, by most estimates, goes to waste. If we can find ways to repurpose and reinvest that trillion dollars into improving health care, everybody’s a winner.

Lee: Do you have any particular advice for leaders of academic medical centers?

Paz: First and foremost, focus on training the next generation of physicians, nurses, and other health care clinicians in ways to be successful as health care evolves and continues to change in this country. When we give someone a medical degree, the education and training has to be durable so that that individual is successful for many, many years to come. It’s everyone’s responsibility to make sure that these individuals have the ability to provide outstanding care as the relationship between doctors and patients evolves, and as we move toward a more patient-centric universe.

Finally, we must address the opportunities around access to care and quality of care while finding ways to reduce the cost of care. Until we are able to successfully address the issue of affordability, it will remain a burden not only to our patients but also for our nation as a whole.

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