Durham County

Blue Cross and Blue Shield of NC names new CEO

Patrick Conway was picked to lead Blue Cross and Blue Shield of North Carolina on Tuesday. He will start on Oct. 1, 2017.
Patrick Conway was picked to lead Blue Cross and Blue Shield of North Carolina on Tuesday. He will start on Oct. 1, 2017.

Blue Cross and Blue Shield of North Carolina, the state’s largest health insurer, chose its new chief executive officer on Tuesday.

Dr. Patrick Conway, who currently works for the Centers for Medicare and Medicaid Services, will succeed current CEO and President Brad Wilson, who announced his intentions to retire in February.

Conway, who has been with CMS since 2011, is its deputy administrator for Innovation and Quality as well as the director of the Center for Medicare and Medicaid Innovation.

Conway, 42, will begin at Blue Cross on Oct. 1 – though Wilson, 64, will remain on staff for a transition period.

“Blue Cross NC’s role in transforming the health care system in North Carolina is a model that other plans aspire to and that I want to work with the Blue Cross NC team to further improve,” Conway said in a statement. “I look forward to collaborating with Blue Cross NC employees, health care providers and employers to deliver the best health outcomes and best service experience at the lowest cost for our customers.”

Blue Cross declined to say how much Conway would be paid as CEO, though Wilson received total compensation of $3.5 million in 2016.

Blue Cross, which has 4,800 employees, is one of only two insurers to offer Affordable Care Act insurance plans in North Carolina and the only one that offers them in all 100 counties.

The Durham-based company insures approximately 3.9 million people in North Carolina, of which around 500,000 are on ACA plans.

Last week, the insurer announced it had overestimated its expenses and that it would be lowering its rate increase request from 22.9 percent to 14.1 percent. The company had asked the N.C. Department of Insurance to approve the higher amount in May based on three months of medical claims submitted earlier this year on policies covered by the Affordable Care Act.

“The individual market in North Carolina has become less volatile,” Brian Tajlili, Blue Cross’s chief actuary, said in a blog post last week.

“Put simply, we got information in June and July that made us confident we could reduce our requested rate increase for 2018,” he continued. “At Blue Cross NC, we have gotten a better handle on the anticipated medical costs of people covered in this group which has made it easier for us to estimate the necessary price of our ACA health plans.”

The fact that Blue Cross lowered its rate increase is evidence that Conway will be coming into an improving business situation for the insurer, said Brendan Riley, a health policy analyst at the North Carolina Justice Center.

In 2014 and 2015 combined, Blue Cross reported an overall loss of more than $400 million on ACA plans. However, that number decreased to a loss of $38 million in 2016.

“Absolutely, the picture is looking more positive in terms of the individual market,” Riley said. “But the Trump administration can still do a lot to change that.”

The single biggest factor for the company’s 22.9 percent request in May was a Republican proposal to defund cost-sharing-reductions for low-income individuals on the ACA.

About 67 percent of Blue Cross’s ACA customers in North Carolina qualify for these cost-sharing reductions – and recently President Donald Trump has threatened to end cost-sharing-reduction payments.

“It’s still not clear what the Trump administration will do, and it’s still not clear if Congress will do anything to help further stabilize the market,” Riley said.

Zachery Eanes: 919-419-6684, @zeanes