AHIP Ship Sails Rough Seas
by Richard Mark Kirkner
March 21, 2016
Source: Managed Care Magazine
Maybe she doesn’t seek it out. And she isn’t the maker of it. But trouble does seem to have a way of following Marilyn Tavenner around. In the nascent days of the ACA, when she was director of CMS, the Healthcare.gov website had its epic meltdown. While HHS Secretary Kathleen Sebelius faced the cameras, Congress, and much of the heat, Tavenner and CMS oversaw the website and were charged with fixing it.
Now Tavenner is CEO of America’s Health Insurance Plans, or AHIP, as it prefers to be called. Days before she started the job last July, UnitedHealth Group, the country’s largest insurance company, quit the organization. Five months later, Aetna did the same. And three key senior staff have quit since last May. So Tavenner is leading a group that purports to represent the country’s health insurance industry without having two of the five largest insurers in its ranks, important vacancies in the executive suite, and a budget deficit that in 2014 ballooned to $2 million (2015 tax records are not yet available). Throw the uncertainty of the upcoming presidential and congressional elections into the mix, and you have a cocktail that might unnerve even a seasoned executive like Tavenner and call into question the clout of an inside-the-Beltway heavyweight like AHIP.
Neither seems to have happened. Tavenner, 64, answers an interviewer’s questions directly in a measured, even Virginia drawl, congenial—“Call me Marilyn, please”—yet businesslike. “Marilyn is a superb leader,” says Dan Mendelson, Avalere Health founder and CEO and a former Clinton administration aide. “She knows from experience how to navigate both the states’ and federal governments, and I think they’re really lucky to have found her.” The AHIP board sees Tavenner as the “the insider of all insiders,” says a policy analyst who didn’t want the statement attributed to him. He adds simply: “If she can’t solve our problems for us, who the heck can?”
And AHIP is not about to be relegated out of the major leagues of health care politics—and that’s not just Tavenner’s opinion. “AHIP as an organization will continue to thrive,” Mendelson says. “When senior White House officials want a comment on a matter that affects the future of health plans, they will call Marilyn. I can tell you from having sat in that seat that you’re not going to call 10 health plan CEOs to get their opinions about things.”
Joseph Antos, a health care policy expert at the conservative American Enterprise Institute, points to two developments some insiders read as possible signs of waning AHIP clout: the failure to preserve risk corridors for not-for-profit cooperative plans and Democrats’ lack of interest in fixing the ACA. “But do they mean AHIP has really lost influence? I wouldn’t say so,” Antos says. “Without a UnitedHealth, without an Aetna, that puts a crimp in their gigantic budget. But it doesn’t necessarily mean that AHIP’s influence is less because the views of everybody else in AHIP pretty much reflect the views of UnitedHealth and Aetna, at least on technical issues.”
A major player
With offices on Pennsylvania Avenue about halfway between the White House and the Capitol, AHIP and its antecedents have been major players in American health care politics for the past several decades. The ACA’s lack of a public option on the exchanges was a concession to health plans that Tavenner’s AHIP predecessor, Karen Ignagni, helped engineer. The organization has also successfully fought cuts to Medicare Advantage, and, more recently, helped postpone the increasingly unpopular “Cadillac” tax on expensive health plans. In the ’90s, AHIP’s predecessor, the Health Insurance Association of America, spent up to $20 million on the “Harry and Louise” television ad campaign that helped derail the Clinton administration’s health reform plan. When Hillary Clinton raised questions about the Anthem–Humana and Aetna–Cigna mergers last fall, AHIP fired back that “policymakers should focus on addressing the real cost challenges facing patients—the soaring prices of prescription drugs and medical services—that drive up the cost of coverage and out-of-pocket costs for millions across the country.”
With the depth of pockets that gets people riled up about the power of special interests, AHIP can afford to spend millions every year on lobbying on behalf of its members. According to the Center for Responsive Politics, the organization has spent $65 million on lobbying over the past seven years. About $9.5 million of that was in 2015, down from a peak of $10.4 million in 2013.
In an interview with Managed Care, Tavenner said one of her top priorities is to bring both Aetna and UnitedHealth back into the AHIP fold. “How that starts is, obviously keeping the lines of communication open with both Aetna and UnitedHealth,” she says, noting that she has “long-term relationships” with both Aetna CEO Mark Bertolini and UnitedHealth CEO Stephen Hemsley. “We are still in regular dialogue.” (Extended excerpts of the interview with Tavenner).
To bring them back, Tavenner acknowledges that AHIP has to address the issues that drove them away. She lists dues and governance as problem areas. AHIP must balance the interests of large members like Anthem and Cigna with smaller plans and even members who aren’t in mainstream health insurance, such as dental and vision plans, Tavenner says. The organization is also working on strategies that will help members navigate delivery system reform and develop relationships with consumers, she adds. The goal is to resolve those issues within a couple of months, then go back to Aetna and UnitedHealth and other members.
Mergers are in AHIP’s family tree
AHIP is the result of several mergers. The current organization is a product of the 2003 merger of the Health Insurance Association of America and the American Association of Health Plans. And before that tie-up, the American Association of Health Plans was the result of two groups that represented managed care organizations, the Group Health Association of America and the American Managed Care and Review Association.
Tavenner is also working on getting AHIP’s finances in order. The organization’s budget deficit widened in 2014, even though AHIP took in almost $3 million more than it did in 2013; its spending budget was around $68.6 million in 2014, according to its tax filing. Over the past two years, AHIP spent about $2.75 million more than it brought in, the filing indicates. “While they’re not huge losses, we don’t want to continue in a loss; we want to get back into a positive account balance,” Tavenner says. “We’ve been looking at everything from the conferences we do to the consultants we employ to make sure it all supports our strategy.” In 2014, AHIP spent $13.6 million—about 20% of its budget—on five consultants. Roughly $6.4 million of that went to the Locust Street Group, a Washington communications firm headed by David Barnhart, who advised, among others, Tavenner’s former boss in Virginia, then-Gov. and now Sen. Tim Kaine. Another $4 million went to Apco Worldwide, another Washington-based communications firm.
Antos notes that it’s common for large trade organizations like AHIP to experience some ebb and flow in membership. But the financial impact of the defections of large companies like UnitedHealth and Aetna can be significant, and getting them back into the fold would probably go a long way toward solving AHIP’s budget woes, he says.
The departures of key executives have also fed perceptions of an AHIP in turbulence. Ignagni was AHIP’s CEO for 12 years and CEO of the American Association of Health Plans, one of AHIP’s predecessors, for 10 years before that. She left AHIP in May to take the helm at Emblem Health, a $7 billion New York not-for-profit that lost $500 million last year. Ignagni’s s total compensation at AHIP was $2.1 million in 2014. Dan Durham, AHIP’s then-executive vice president for strategic initiatives, served as interim CEO during the search that led to Tavenner getting hired.
At about the same time as Tavenner started at AHIP, L.D. Platt left as vice president of external affairs to take a similar job with UnitedHealth. That was just a few weeks before his new employer quit AHIP. In December 2015, Durham also left AHIP to take a similar post at the Biotechnology Innovation Organization, and Mary Beth Donahue, longtime executive vice president, resigned. Donahue has not revealed her plans.
Tavenner is taking the departures in stride and says turnover in top positions is to be expected when a new CEO is hired. Mendelson of Avalere Health seconds the notion: “Karen [Ignani] was in the seat a very long time.” And like all new leaders, when Tavenner came in she needed to build her own team, Mendelson says. Still, appearances matter, and the exodus of the familiar faces and UnitedHealth and Aetna doesn’t look great for AHIP.
Advancing Medicare Advantage
AHIP’s board met last fall to set an agenda, and the AHIP media office says the priorities it set for 2016 are fixing Medicare Advantage, repealing the “Cadillac tax” on health insurance, and influencing policy for Medicaid managed care, drug pricing, network adequacy regulations, and delivery system reform.
For now, Medicare Advantage is AHIP’s overriding priority, according to Tavenner. Her previous employer has used what she calls “the antiquated fee-for-service methodology” for Medicare Advantage—a methodology that runs counter to the value-based care that is supposed to reward providers for good outcomes and a positive patient experience. “As the program grows, it’s getting harder and harder to tie it back to fee-for-service,” she says. “We shouldn’t be looking at fee-for-service for our comparison, which gets to the issue of things like risk adjustment. We should look at Medicare Advantage as its own program, and use it to drive delivery system reform and coordinated care.”
Notably absent from AHIP’s stated agenda: salvaging the state and federal exchanges, which could be a divisive issue for AHIP members. Tavenner has taken some criticism for being too close to the Obama administration and the flawed exchanges. “They have to decide to what degree—and I think this is where the fracture is—do we invest political capital, lobbying capital in trying to rescue these exchanges?” says John Graham, a senior fellow at the conservative National Center for Policy Analysis and former vice president of the Advanced Medical Technology Association.
Tavenner says she believes in the exchanges, although she acknowledges that they need more work. “Most health plans understand that the exchanges are new—they’ve only been in existence for three years—and they’re trying to support and work with them.”
This gets to what Tavenner says is AHIP’s goal to speak to “the consumer-driven part” of health insurance. “Plans have to make sure the premiums are correct, that individuals stay in these plans, and that they understand that health insurance is a continuous obligation, not just for when you’re sick and then you exit again.” AHIP has pushed for limiting special enrollment periods. Companies that sell policies on the exchanges have complained that allowing signups outside the normal open enrollment period has confounded their risk calculations because it encourages people with expensive health problems to enroll.
But the fog descending on the way forward for AHIP—and almost everyone else in health care—is the craziness of this year’s presidential election. What would a Trump presidency mean for the ACA? And even if a Republican wins the White House, undoing the ACA won’t happen overnight, despite the campaign rhetoric. “The writing of legislation will not be a walk in the park just as writing the Affordable Care Act wasn’t a walk in the park,” notes Antos at the American Enterprise Institute. But AHIP will play a key role in shaping American health care policy, regardless of who wins, he says.
Election turmoil notwithstanding, Tavenner says she has AHIP on a course to use this year to plan for 2017 and beyond. “Regardless of who is president, regardless of how Congress looks, health care is not going away as an agenda item,” she says. “The issues of coordinated care, the issue of tying payment to quality outcomes, they’re not going away; they’re bipartisan. And when I talk to members of Congress pretty much daily or definitely weekly, everyone understands that the model has to change, that coordination of care—particularly when you’re dealing with an aging population, a population with chronic illness—has to change.”
For AHIP, the goal will be seeing that members have the data to support that and the technology to collect and crunch the data, Tavenner says. “That’s going to happen regardless.”