John Snyder has been president of Sanford Health Plan since July 2019, leading an insurer that serves more than 200,000 members in Minnesota, North Dakota and South Dakota. It’s part of Sioux Falls, S.D.-based Sanford Health, an integrated health system with 44 hospitals and more than 200 senior-care facilities in 26 states. Snyder previously served in several positions during his nearly 30 years at Carle Health System, based in Urbana, Ill., most recently holding the dual roles of president and CEO of Health Alliance Medical Plans and executive vice president/system chief operating officer of the health system. He recently spoke with Assistant Managing Editor David May about Sanford Health Plan’s work to support members dealing with COVID-19 and the future of value-based payment. The following is an edited transcript.
MH: You came to Sanford Health Plan about a year ago—before COVID-19 was on anyone’s radar. What were some of your priorities for the health plan at the time?
Snyder: Sanford’s health plan is about the same size as the health plan at Carle Health System. So it was a similar-sized plan, but the Sanford system is quite a bit bigger than Carle. It gave me an opportunity to come into a place and say, “OK, how do we do a better job at integrating this plan into the system?” And there was clearly an appetite among the leaders in the health system to do that. I brought that unique perspective. How do we better integrate, or truly integrate, because I would say a year ago, we weren’t that integrated with the health system.
Some of the first priorities included doing an assessment of our capabilities. Where did we need to make improvements? I firmly believe that a smaller health plan, regional health plan, really has to have contemporary capabilities that are comparable to the big plans. Just because you’re a smaller plan, you can’t skimp on member services. So that was one of the places where I did an assessment early on. We’ve made significant improvements in those capabilities.
The other thing is really being sure that we have a member focus, providing significantly better services for our members so that they really feel good about their health plan. And also, how do we integrate, whether it’s managed care, population health? Integration brings differentiation to the health plan. If we can differentiate ourselves because we’re part of Sanford Health and provide different services or provide services in a unique way, it gives us a significant competitive advantage.
MH: How did you facilitate this integration? Did you have time to make a lot of progress before COVID-19 changed everything?
Snyder: We did. A lot of it is educating people to get smarter about what the health plan really can do. It was in a couple of areas, one is just the whole care management/population health approach. Before I got here, those efforts really weren’t integrated at all. We looked at combining our care management staff and infrastructure and the health plan with the health system’s care management and staff. And looked at where we could synergize. Where can we do things together? How can we do things better together?
One of the other areas is data. We’re doing a much better job now sharing data and if you think about it, a traditional health plan has claims data. Claims data is rich; it has a lot of valuable information in it, but it’s all retrospective, it’s all historical. If you think about our clinical data, it’s much more robust, it’s more real time. And when you combine the two you have a much better predictive tool to better manage people’s health. We’ve made a lot of progress doing that.
Another area I’m really excited about is rethinking how we do prior authorization. COVID-19 got in the way a little bit, but we’re making good progress and I’m hopeful by the end of the calendar year we’ll have (a new approach) in place. Prior authorization is kind of the bane of the providers. They have to check with the insurance company before they were able to do a test or something, and there’s tremendous administrative burden associated with that. That’s everywhere. Not to get too deep in the weeds here, but we’re on Tapestry, which is the Epic claims system. Sanford Health also uses Epic, so both the health plan and the health system are on the same (platform). We’re looking at leveraging that connectivity so that we can actually do prior authorizations within the system behind the curtain, if you will. They’ll be done at the point of service, and the member doesn’t get into that mess.
MH: Your markets have never been a COVID hot spot, but can you talk about the course of the crisis thus far at Sanford Health?
Snyder: We’re primarily in North and South Dakota and because this population is not as dense, we didn’t have quite the roller-coaster ride other health systems experienced. We did have a little bit of that in Sioux Falls, in that there was a significant meatpacking plant here that had an outbreak, but other than that it wasn’t nearly as bad as it’s been in a lot of places.
But I’m sure our journey, as a health plan, was very similar to others. We did a lot of contingency planning. We did a lot of policy review and wanted to be sure, as the crisis evolved on an almost daily basis, whether you’re going to cover testing or you’re not. What other services are you going to cover and what are you not going to cover?
We certainly went through all that and did what almost everybody else did to be a contemporary health plan and cover pretty much everything. Then it was a lull, like a lot of other places, as medical care started to slow down and therefore claims started to slow down. It gave us an ability to double down on some of our capabilities. It gave us a chance to do a lot of research in the prior authorization project I mentioned and helped with some of our integration with population health and data. Things are obviously in different stages across the country. In our markets, clinical care seems to be pretty much back where it was.
From a health plan perspective, we certainly tried to pivot our products so that as people experienced different stages, whether they got laid off or didn’t have a job, and potentially didn’t have health insurance, how could we pivot and offer different products so they could have some coverage, and really tried to push that.
For example, a lot of people, if they did lose their job, that was their life-qualifying event that means they could apply for coverage on the insurance exchange (under the Affordable Care Act). And they probably were able to get a subsidy to help pay for it. We tried to get out front with those messages with employers and our members, both current members and potentially future members.
MH: Payers saw claims plummet as health systems shut down elective care and procedures. Was that the case at Sanford?
Snyder: We certainly have seen bottom line growth, because there haven’t been as many claims. It hasn’t been as substantial for us as it probably has been with maybe some other plans, just because a lot of our plans don’t have as much upside and downside risk in them. Obviously if we were at full risk and we had a full value-based agreement with everybody, there wouldn’t have been any revenue impact to the providers. I’m hopeful this crisis will kind of speed up that process (to value-based payment) because that obviously is the right way to align incentives and really provide better care in this country.
MH: Can you share a little bit about your philosophy on value-based payment? How are you working to advance that?
Snyder: One of the things we’re doing is, if you think about it between the health system and the health plan, we have a defined-risk group population that we have shared risk of and it’s a pretty big group. … For us, it’s probably 80,000 to 100,000 that we’re fully at risk for, and so it’s kind of the ideal situation, in that we control the first-dollar premium and we’re all incented the right way. We don’t have to worry about as many regulations and rules because we get (a set amount of) dollars to take care of those patients and are incented to do the right thing to take care of those patients in the most cost-effective, safe way. The more we can have those opportunities and where we can do that and prove that it works, I think that’s the future of healthcare finance. And it has to be the future of healthcare finance. It’s just how do we get there?
MH: Value-based care has been slow to advance. There’s a lot of agreement on the goals, but it’s just the speed of change.
Snyder: Yes, and again that’s where health systems that have health plans have a real advantage because typically you’re going to have a risk group that you’re both fully at risk for and you can develop and prove concepts and you find out what works and doesn’t work, and they need to take that and scale that as things grow. That’s an opportunity that any health system with a health plan really needs to look at and take advantage of.
MH: Is there anything else you think the pandemic is helping advance? Do you support keeping the telehealth waivers and other changes?
Snyder: Absolutely. As a lot of people have said, the genie is out of the bottle. People have experienced telehealth now. Providers, because they’ve invested in brick and mortar, there was some reluctance to go there. I think patients obviously would prefer face-to-face settings, but now people have experienced telehealth and virtual medicine and they realize for a lot of things it works pretty well. It certainly increases access. In the Dakotas, for example, you have to drive a long way sometimes to see a doctor and to be able to do a lot of this care virtually is an advantage—from an access standpoint, a convenience standpoint. This is especially true across the country with behavioral health. There’s just such a shortage of providers. Virtual behavioral health opportunities will be a really big thing going forward and would really help serve members and patients.
MH: What kind of policy discussion would you like to hear in the run-up to this year’s elections?
Snyder: I think the ultimate question involves healthcare financing and how we’re going to finance healthcare not only in the next couple of years, but the next decade. It’s one of those issues—the can has been kicked down the road for quite a while now and it’s just time that we figure that out. Whatever it is, the incentives have to be aligned. That’s what’s wrong with healthcare today. The incentives are not aligned, and we can’t get where we need to go until those incentives are aligned.
It’s just the old system of fee-for-service. As a health system, as a provider, as a doctor, as a hospital, I don’t get paid until someone gets sick. And of course they’re altruistic and want people to be healthy and everybody does things around the edges to have wellness programs and things. But until you align the incentives—around pay and pay systems, doctors and hospitals—to keep people well it’s going to be hard to make real progress.