A Conversation With Eric C. Hunter, MBA, CEO of CareOregon

Eric C. Hunter, president and CEO of CareOregon, has been on the Managed Healthcare Executive (MHE) editorial advisory board since October 2020. He spoke with Peter Wehrwein, managing editor, and Briana Contreras, editor, for a recent version of MHE’s “Meet the Board” podcast.

This transcript has been edited for clarity and length.

When we spoke last year, one of the main topics of conversation was your proposed merger with SCAN Health. That merger was abandoned after you ran into opposition in Oregon. What, in your view, was the source of that opposition?

We’re still trying to recover, frankly, from a lot of effort, literally years of work that our board and leadership team put into crafting what we thought was an amazing opportunity to support Oregonians — our members, our providers, our communities — better and longer into the future, with a partnership with an organization that had a like mission and vision. What’s ironic is that the opposition to that deal didn’t come from folks who had concerns about what we would necessarily do together or that we’re doing anything wrong or that Scan’s a bad company. We often said that it was opposition of love, in that folks were worried that we would no longer be who we’ve been for 30 years. This is our 30th anniversary of serving the Oregon population, and there was a palpable fear that by combining with anyone — for profit, not for profit, Oregon, California — that there was a chance that we would no longer have the focus on Oregon that we’ve had, no longer have the focus on serving the most vulnerable populations. Some even harbored PTSD from previous combinations that had happened in Oregon decades ago, when Regence and Cambia came together, got regional and stopped doing Medicaid. That was the kind of concern, but I think it really drove the bulk of the opposition.

Eric C.Hunter, MBA

Once that was entrenched, with some very throaty advocates for the opposition, it became a chore to get the narrative, as we really saw it, out, with the assumption that it was a good thing because we had spent so much time working on it and crafting an agreement that protected Oregon, that protected our members and our providers and our staff, our independence as much as possible.

The fact that this combination was meant to basically leave CareOregon as it was, there wasn’t a lot we could speak to about what would be different. When you leave a void in the conversation, people come up with their own narratives. I think … what happened is that we thought we’re the good guys; we thought it’d be easy. And we were wrong.

Your principal argument for the merger was that it would give you access to scale and capital. Iknow you are still licking your wounds, but now you still have that problem. Do you have any thoughts on how you are going to deal with this issue of capital and scale when you are facing much larger competitors?

I think one of the things that we came out of this process with was a desire and a renewed focus on instead of sitting back and waiting for opportunities that come to us and reacting to them, we’re going to proactively identify what we need and who we may need to partner with and the products we need to be in and go after that, to do exactly what you’re talking about.

I think any of the previous arrangements that we discussed were happenstance. There were conversations that had happened that led to something. But now we’re being much more deliberate and saying, to meet those needs that you identified, our need to diversify products, our need to have access to capital — to really keep up with the Joneses, as they say — and not just the big nationals for profits. There are some dynamics about large regional players, whether it’s Kaiser Permanente and Risant Health, it’s Providence and Providence Health Plan, it’s Regence and Cambia, it’s PacificSource. All of those entities are doing their best to shore up their operations and get bigger, faster, stronger, and the demands on the Medicaid side are so great that what we’re seeing is our admin percentage going up every year to meet the needs of our members and the requirements in the state. And that’s what we’re trying to head off. We need to find greater product diversification, increase admin, really dig in and vet AI [artificial intelligence], and really understand how we can get more operationally efficient. We were still investigating a number of options. Some things might be organic. Some things might be partnerships with others. We’re looking at other products. We’re going to be very deliberate, but we will be meaningfully aggressive in the space. And, as opposed to the previous deal, we’ll work harder to make our case sooner about … the positive impact it will have on populations.

The people who had concerns about Scan, they undoubtedly heard your case about needing capital. Did they have ideas about how you should go about doing that? Have you had to adjust your strategy to take into account their points of view? Or did they just did they just not hear your story about the need?

I don’t think I don’t think the most of them believed it. I think that they come from different places and have different connections. I think they see the world a little differently. They see the strength that we currently have. They see the size and scale and scope of CareOregon, and they believe that we have nothing to worry about. They haven’t seen some of the details of our finances. They’ve seen a couple of good years during the COVID years, which allowed us to invest most $250 million into our communities. But they don’t know about the losses or think about the losses we had before that, or the losses, as we speak, year to date.

I think that they don’t necessarily have the same visibility into the impacts of what some of the other players in the market are doing in the changing regulatory environment. It’s a new administration at the Oregon Health Authority. We’re really looking forward to working with Dr. [Sejal] Hathi and her team, but we don’t know exactly where that’s going to go.

So there’s a lot of things that I think that that folks might have taken for granted. We’re doing great now, but my job isn’t just simply to make sure that CareOregon is OK this month or this quarter. I won’t be here — or maybe I will — for our 60th anniversary. But my goal is to make sure that there is a 60th anniversary, and that we’re able to do the things the way we do them now, then.

There’s a phrase that I learned from a mentor decades ago that if you’re not managing growth, you’re managing decline. I’d rather manage growth.

Unlike a number of states, particularly down South, Oregon didn’t rush in to kick people off the rolls because our motivation is keeping people healthy, not necessarily saving money; we’d love to do both. But primarily, it’s about serving people. So, the Oregon process is actually still continuing.

They’ve done the majority of the population and they really tried to start with those folks who would be easier to get redetermined. Where we’re at now is the last 120,000 to 130,000 people who could be more difficult to get redetermined, some of whom have higher acuity, they were saved until the last, sowe’d have more time to engage them and educate them, and hopefully keep them on the rolls. And so, we have seen a decline in our Oregon Health Plan* population of 8%. We anticipated about 16%. We anticipate more. But we’re pretty happy with where we are so far.

The overall proportion [of people with health insurance] hasn’t declined much at all. I was on the task force that worked on a bridge plan to try to mitigate people losing Medicaid coverage to keep them from being uninsured. Oregon created a Healthier Oregon program where the state pays for coverage of people, regardless of their citizenship status, and so that population has been enrolling in our plans. For this bridge plan, Oregon is leveraging federal funds to have people who were on the expanded Medicaid program between 138% and 200% of the federal poverty level — they will be on the Oregon Health Plan through the coordinated care organizations. So, we’ve had some folks who would have dropped off altogether sort of grandfathered in to stay with the plan. And starting July 1, we will even have people from the marketplace plans (at those income levels) coming over to the Oregon Health Plan.

The bottom line is that Oregon was deliberate about trying to keep people covered. We’re very thrilled with that because we’ve been able to hold on to a lot of our membership and even grow in some areas.

Could you tell us about this preventive residency program you have established with Oregon Health & Science University (OHSU) and how it might improve the health of Oregonians?

Because of the role, even within Medicaid, that CareOregon plays, we are uniquely positioned to feel the burden of serving those folks who use federal qualified health centers and the most vulnerable of even the Oregon Health Plan population. We have seen with the overall issues of access for patients, those folks were most directly impacted. Our partnership with OHSU is long-standing. It came to be that we said look together, how do we increase not only the access and capacity at some of these clinics but enhance the training of those physicians that are going to those places so that they truly understand the population. It is different. There are nuances to how you work with them and to understand the levers you can pull to actually keep people healthy.

We think this will do a bit. It won’t do everything. It won’t solve all the problems. But I think it’s a good progress step to say, let’s get more people out there so providers can get hands-on training in dealing with this population.

Hopefully, they want to practice there when they get out
of school.

We’re in a presidential election year. What role do you see healthcare playing in the election? Any thoughts on what issues the candidates might use — or abuse — to win over voters?

I think that one area that I know will be used, is already being used and hopefully will be used more is the fight for reproductive rights. We’ve had a banner on our emails in the past and some of our pages that says, for lack of a better term, abortion is health care. I mean, health care is health care. And the idea that folks would legislate health care benefits based on anything other than the needs of the patient is abhorrent to me.

So, I think that will be an issue. It impacts people every day in Oregon. We’ve got states to the north and south, Washington and California, that are good. Idaho, to the east, not so much. That impacts what folks can get and the pressures on providers, even in Oregon.

I think also, one thing that should be more in the public eye — and isn’t — is the general sense of some folks in the arena that equity, diversity, and inclusion is a nasty set of terms. I think, particularly in healthcare, we saw with COVID the devastating inequities in the systems. If we cannot — through government entities or the courts — advocate for equity across the board, people will be hurt and will be left behind. And I think that’s unacceptable.

We’re not allowed to go out and lobby or advocate directly, but I think that our position needs to be and will be very clear that gender equity issues, gender reassignment, reproductive rights, equity, diversity, inclusion — those things are critical to a healthy population and healthy healthcare system. We’re going to advocate and support the messages around those things being at the forefront.

It is a little perilous. It is worrisome. Even access overall. There are still the threats to the ACA [Affordable Care Act] years later. They tried repealing the ACA before. They failed, luckily. But there are a lot of provider systems that are already in trouble. Without those members having coverage, they would be out of business, destabilizing the entire system.

As CareOregon we have to stay out of politics, but we have to advocate for our members and our communities, so we’ll find a way to do that.