On this sunny August afternoon, joggers and cyclists pass by Mark Ganz as he strolls along the Willamette River in downtown Portland, a missionary preaching about health care.
Doctors used to be like his father, a family practitioner. “He spent a lot of time with his patients,” Ganz says. But when the retired doctor got sick a decade ago, his own physicians missed symptoms of bone marrow cancer until it was too late. Today’s time-pressed health providers don’t have the same “human touch,” he says.
Ganz, a trim 51-year-old in light chinos, is in a position to change that; he’s the CEO over Regence BlueCross BlueShield, one of Oregon’s largest health plans. Ganz’s reform agenda has transformed the staid nonprofit into an aggressive health services conglomerate whose internal literature states it is “positioning to win.”
Changes in federal health laws are barreling down on his industry and the country at large that espouse the same goals Ganz has advocated for years: better care, eliminate waste.
“His philosophy and ideal is that if we want to change the world we have to change ourselves first,” says Louis Machuca, a board member for Cambia Health Solutions, the parent company of Regence BlueCross BlueShield of Oregon and counterparts in Washington, Utah and Idaho. Ganz heads Cambia as well.
Regence is breaking new ground with award-winning technologies aimed at helping consumers understand the true costs of services, says Ganz. Health care should work more like other industries, he adds, which is why he brought executives from Nordstroms and Starbucks onto his board of directors.
Not everyone appreciates Ganz’s efforts. In recent years, the company once considered the conscience of the region’s health insurers has steadily lost members, raised rates and become a lightning rod for complaints over slashed benefits.
Some fear the changes Ganz is leading threaten to undermine federal reforms, rather than further them.
Critics “don’t understand what we’re doing,” says Ganz. “I find it interesting that people would be quick to criticize the current health care system, and then when a player like us steps forward and says ‘We are willing to change, we are willing to challenge our long-held business model to achieve a greater good,’ that we would be criticized.
“In fact, I’m proud of it,” he says.
Portland nurse practitioner Kathy Perko, one of Ganz’s close friends since ninth grade, has learned to counter skepticism of Regence among other health care professionals; she is a program director at Doernbecher Children’s Hospital.
“I say the person is not the company,” she says. “Mark is one of the most honest and kind and thoughtful human beings that I have ever met.”
Formative education
Ganz flashed unusual confidence even at age 7.
“He’d head out into the neighborhood, walk up to a door and just ring the bell,” recalls his older brother, Rick, a Jesuit priest and vice president at Marylhurst University. “He’d say, ‘Hello, I’m Mark Ganz and I’ve come to visit you today.'”
Ganz grew up in Spokane, the youngest of six in a strict Catholic family where his father emphasized accountability. He assigned each child to read 30-40 books a year, mainly the classics, and to discuss them over dinner. He periodically checked the children’s ledgers listing what they’d bought and why. They attended Gonzaga Prep, a Jesuit school.
Health insurers were not beloved by the Ganz family. In 1974, the local BlueCross BlueShield didn’t want to pay for certain procedures, so his father sued, arguing reimbursements were unjustly denied, according to a Spokane Spokesman-Review article.
Years of grueling litigation ended in a settlement, Ganz says; that “taught me a lot about living by principle, even if it costs you.”
At Georgetown University, Ganz met his future wife, Leslie, and studied to become a health care lawyer. He worked as a congressional aide, then entered private practice.
In 1995, he took a job as general counsel to the Tacoma BlueCross BlueShield. Given the past litigation, Ganz promised his father to fight to improve patient care, not hurt it.
“He saw it as vindication,” Ganz says.
In 1917, Tacoma physicians formed what became the first BlueCross, letting timber workers pool their money for medical services. The nonprofit “Blues” boomed after World War II but by the 1990s were merging rapidly to fend off competition from HMOs and for-profit insurers.
The Tacoma Blue became part of the four-state Regence Group. Named CEO in 2003, Ganz focused on bringing down the costs with “an economically accountable” relationship between patients and providers.
Fostering change
Ganz sees his goals bearing fruit. A pilot project to increase the time doctors spend with patients has worked, as have online consumer tools such as provider ratings and costs of procedures.
Changes for Regence policyholders in the Portland area further his goals. Starting in December, about 20,000 people who buy their own insurance will pay different premiums for different hospital provider networks. It’s an attempt to create competition, so market forces drive costs down. At the same time, its policyholders statewide face higher deductibles or increased premiums.
Premiums are like a community fund, Ganz says, and greater cost-sharing will lead Regence members to tap health care less and “be better stewards of their neighbors’ money.”
For his own health care, Ganz chose a health savings account offered to Regence employees. It caps overall spending but lets the individual decide where the money goes. Ganz says it changed his relationship with his doctor, leading to better choices on tests and procedures.
He also tries to eat healthy and stay fit through brisk walks, jogging and a weight bench at home in the Cedar Hills neighborhood where he lives with his wife, son, 16, and daughter, 11.
Ganz’s base salary is $950,000, but it can more than double based on company performance. This year he draws $1.94 million, but says “that’s not what motivates me. I’m in this because I want to drive change.”
Ganz knows his salary draws attention, and it makes him uncomfortable. “I don’t judge other people by what they make.”
He serves on the board of other nonprofits, including Greater Portland Inc., a business group, and Catholic Charities.
He’s kept up his reading; currently it’s “Golf is a Game of Confidence” by Bob Rotella, “Atlas Shrugged” by Ayn Rand and “The Happy Isles of Oceania,” by Paul Theroux.
“No rose-tinted lenses”
Imagine a world where you could wreck your car, then buy auto insurance afterward to cover the damage, Ganz says. How many people would pay for coverage before they needed it?
That, he says, is what happened to health insurance in Washington state in 1993. Lawmakers required insurers to cover all comers, pre-existing conditions notwithstanding, just like today’s federal changes.
Many people dropped insurance altogether until they were sick and needed expensive health care. Premiums couldn’t cover costs and insurers including Regence BlueShield in Washington, where Ganz worked, bled red ink and finally left the individual market. The state eventually backed off its mandates.
Ganz worries a similar problem could happen with the federal overhaul, because the penalty for not buying health insurance is far less than the cost of premiums. Without healthy people to share the costs, Ganz says, a recent study predicting a 38 percent jump in premiums is, if anything, low.
He says Regence and its parent company will join other insurers in lobbying to improve the law. But in the meantime, “No rose-tinted lenses at this company,” he says. “We will not knowingly put the company in the same position that we found ourselves in the mid-’90s in Washington, financially at risk because of the rules that were in place.”
He says Regence’s rate hikes in the individual market reflect a desire to not subsidize future losses from employer plans. Only by protecting the financial health of Regence can it ensure a “secure, health coverage blanket” for members, he says.
That doesn’t satisfy the critics, who say recent changes risk making coverage unaffordable for some.
Regence is one of a number of insurers that appear to be “getting rid of the sick and only keeping the healthy” in advance of federal reforms, says Mike Kreidler, Washington state’s insurance commissioner. He says people who lose coverage will go to hospital emergency rooms for care instead, costs that will be passed to all consumers of health insurance. “It’s a serious problem,” he says.
Ganz scoffs, calling the comment, “Unbelievable.
“We’ve been in business for 95 years, and our business is caring for sick people. There is no change, and there will be no change, in that commitment.”
Health plan CEO touts reform, makes waves with Regence BlueCross BlueShield, others | OregonLive.com.