Pam Kehaly, President and CEO, Blue Cross Blue Shield of Arizona

Making a Difference in Our Corner of the Economy
from Pam Kehaly

What were two or three significant changes in the economy or your industry that your company needed to address this past year?

The federal tax reforms instituted last year created an unexpected projected lift to our 2018 net income. We had a decision to make: drop the dollars to the bottom line or reinvest in the company and services for our members. The decision to reinvest was easy, but how to reinvest was the harder part. I called a leadership meeting—titled “Monies from Heaven”—and asked that they each come with their top two ideas. The most significant investment we agreed on was a $10 million investment to support Gov. Doug Ducey’s work on opioid overuse in the state. Sadly, we see almost four deaths a day in Arizona due to this problem. Investing in our community aligns with our mission to improve the quality of life for all Arizonans, while supporting our customers and members in dealing with this national epidemic.

To date we have assembled a community advisory board of key local leaders, have initiated a grant program that has already awarded more than $1 million, and have incented Arizona doctors to become certified in Medication-Assisted Therapy. This is just the beginning, with much more planned over the next year to positively impact this tragic issue. 

How did you address/overcome the challenges? 

The Affordable Care Act (ACA) has provided access to healthcare for millions who were previously uninsured. And while the ACA has many positive outcomes, it comes with its share of challenges. Consistent tinkering with the legislation has created an environment of uncertainty, making it very difficult to project costs, resulting in market withdrawals, significant premium increases, and frustrated consumers. These uncertainties resulted in BCBSAZ’s decision to withdraw from the Exchange in Pima and Maricopa counties for 2017. This action angered many Arizonans who believe our position as a local, not-for-profit Blue plan creates an obligation to offer a solution for all Arizonans. And they are right. We made the decision to re-enter Pima County in 2019. A tremendous amount of work was required by the team to make this re-entry happen, and there is a financial risk to the company, but we do believe this move aligns with our mission.

What is the most impactful decision/moment over this past year in regard to management of your employees that impacted the company and or our community? 

Late last year, a number of executive retirements at Blue Cross Blue Shield of Arizona, including that of the former CEO, brought new leadership to the organization. In my first few months in my new role, I spent a lot of time listening: to our employees, our customers, and key stakeholders in the community. I learned that the organization has great strengths. We have strong relationships in the community, and have earned a level of trust among our customers and other stakeholders. Blue Cross Blue Shield of Arizona also has a strong culture. Our employees are purpose-driven and dedicated to providing the best service to their customers. Indeed, Blue Cross Blue Shield of Arizona employees are more engaged than anywhere else I’ve worked. 

 I also learned that our employees are ready for change. Change is always hard, but the marketplace is moving at warp speed, and customers are demanding new kinds of solutions. We changed our organizational structure to align more closely with our customers, we reduced organizational layers and increased spans of control for managers, we revamped our strategic plan, and we are in the midst of driving a culture change to a more nimble, market-driven, accountable organization. While our plans are built around a more nimble and innovative approach to the market, at their core is our organization’s unchanging commitment to improving the health of Arizonans. Our mission has not changed, but I believe the organizational changes and strategic roadmap we have ahead of us will be a game-changer for our organization.

 

About Blue Cross Blue Shield of Arizona

Blue Cross Blue Shield of Arizona (BCBSAZ) is committed to helping Arizonans get healthier faster and stay healthier longer. With a focus on connecting people with the care they need, BCBSAZ offers health insurance and related services to nearly 1.5 million customers.

BCBSAZ, a not-for-profit company, is an independent licensee of the Blue Cross Blue Shield Association. The company employs nearly 1,500 people in its Phoenix, Chandler, Flagstaff and Tucson offices. Through advanced clinical programs and community outreach, BCBSAZ is moving health forward. 

BCBSAZ’s signature programs and events strive to inspire health in Arizona and make an impact on the overall health of our communities by reaching adults and youth. Examples include: 

Mobilize AZ is Blue Cross Blue Shield of Arizona’s portfolio of public health initiatives that target the conditions where Arizona ranks lower than the U.S. average. Mobilize AZ was launched in August 2018 with a $10-million multi-faceted program to fight the opioid epidemic, and subsequently implemented plans to address mental health and diabetes. 

Nourishing Arizona works with organizations across the state to empower Arizonans to make healthier food choices to improve their long-term health. To date, the program has shared health and nutrition information with more than 4 million Arizonans. 

The Walk On! program, which has reached nearly 330,000 elementary school-aged children since it began 13 years ago, aims to motivate Arizona fourth- and fifth-graders to increase their fruits and vegetables, eliminate soda and add more activity to their day.

Get Fit. Don’t Quit! empowers Arizonans to live a healthier lifestyle through engaging videos with tips on how to be more active, eat better and live well. Teaming up with fitness icon Jake “Body by Jake” Steinfeld, the program is built around the idea that small steps lead to big payoffs, and shows people fun, simple, positive changes they can make in their day-to-day lives to support long-term wellness.

 

At-A-Glance

Year founded in the Valley: 1939
Industry: Health Insurance and related health services
Top local executive/position: Pam Kehaly, President and CEO
Number of years with company: 1
Number of Valley employees: 1,485
Company websites: www.azblue.com

Top 5 services/products: 

  • Individual and family health insurance plans
  • Commercial benefit plans for employer groups, along with specialty products including dental, life and disability
  • Plans are also available for Medicare eligible seniors 

Greatest 2018 milestone for the company: In August of 2018, Blue Cross Blue Shield of Arizona (BCBSAZ) launched Mobilize AZ, a multi-faceted program to address the misuse of opioids and other substances and reduce overdose-related deaths in Arizona. With BCBSAZ investing $10 million over three years, the initiative supports prevention, treatment, and recovery programs to help providers, the community and local organizations fight against the opioid epidemic.

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