New Premera CEO takes over during time of uncertainty

  • By Debra Smith For HBJ
  • Friday, September 26, 2014 3:37pm

Jeff Roe is a little uncomfortable with the magazine profile.

It’s not that he’s unpleasant or difficult. On the contrary, he’s gracious and accommodating, even as a photographer directs him in a photo shoot to lean into that table and tilt his head this way.

Roe is squeamish about the attention because he doesn’t view himself as any more special than any of the other 3,700 people who work at Premera Blue Cross. He views himself as just one of the team.

Sure, everyone has a different title, a different role. His new one just happens to be chief executive officer of the largest health insurer in the state.

“I realize we have roles and responsibilities, but at the end of the day, it’s about delivering to our customers,” he says. “What does it take to do that? No task is beyond me if it will help in that regard.”

Effective today, Roe takes the helm of Premera, and he does so in the midst of incredible uncertainty. The Affordable Care Act is the most significant social program expansion in recent U.S. history. Every American can access health care coverage. That has created some colossal unknowns for an industry built on anticipating and minimizing risk. There are other challenges, chief among them the ever-ballooning cost of health care.

“We’re now operating in an environment with a lot of uncertainties,” Roe says. “The Affordable Care Act is a catalyst for change, but the change is not entirely known by everybody.”

• • •

Roe came to Premera in 1996. The nonprofit, with headquarters in Mountlake Terrace, provides health benefits and insurance services. Then the company had a different name and what Roe euphemistically calls “some challenging business issues.” The insurer was in trouble financially — as in losing millions of dollars in trouble. That happened in part because of failed state health care reform, but there were other issues too. Roe liked the people and he liked the challenge of making something better.

Roe created a marketing department and helped turn an organization that had been quiet in the marketplace into a brand. He eventually moved on to sales and marketing. It seems every area he touched in the company was better for his involvement, says H.R. Brereton “Gubby” Barlow, who stepped down this year from the top position at Premera.

“As he moved into his various roles, each improved with his leadership,” Barlow says.

Others in the health care industry describe Roe as personable, a good listener, a strategic thinker and a leader willing to imagine different ways the company could reinvent itself.

“He’s someone I look forward to working with,” says Preston Simmons, chief executive of Providence Regional Medical Center’s Northwest Region.

The leadership of the Everett Clinic knows Roe well, says Chief Executive Officer Rick Cooper.

“His selection at Premera is recognition of his ability to build constructive and mutually supportive working relationships,” Cooper says. “Strengthening strategic relationships with partners will be important in the quest to increase quality of care and reduce costs for patients. Premera has distinguished itself through operational excellence and under Jeff’s leadership I expect that to continue.”

Gubby Barlow arrived not long after Roe. Under his leadership, Premera turned around. He recruited a team of leaders, and the nonprofit introduced a new suite of products and implemented a new administrative system that improved ability to process claims and serve customers. They began to snag large national accounts, beginning with Microsoft. When an effort to go public to raise capital failed, Barlow and his team found other ways to strengthen Premera’s financial position. After a trip to Japan, Barlow implemented the Toyota “lean” philosophy in which an organization focuses obsessively on what the customer values and does away with the waste. That philosophy and a set of leadership tenets became an embedded part of Premera’s culture.

Barlow, who is 64, says it’s a good time for him to step aside. The organization’s balance sheet is solid. He will continue to be available in an advisory capacity.

• • •

Roe describes himself as a strategist and a servant leader who wants to enable others to be the best they can. His biggest influences as a leader are Barlow along with President Abraham Lincoln and his father-in-law, Gene Cartledge, who rose from humble beginnings to become CEO of a Fortune 200 company. What Roe admires about his father-in-law, now retired, is the man’s humility.

“He didn’t distinguish people based on who they are or who he was,” Roe says. “Everyone was good and deserved to be valued. I hope I reflect that too.”

How to lead well is something Roe has worked on for years and thinks a lot about. His new office at Premera is nearly bare, other than a row of books on leadership. He says there’s a reason his office door is glass: He wants to be visible and available to people. When he talks about the events that shaped him, he points back to another influential leader in his life: Sen. Slade Gorton.

Roe, 49, is a local. He grew up in Bellevue and attended Sammamish High School. He was a solid student but in his own estimation, didn’t stand out in a remarkable way.

That changed at the University of Washington, when a natural talent for leadership emerged. He served as a leader in his fraternity and in the Greek system. An internship in Washington, D.C., his senior year had him thinking about public service and cemented a desire to a return to the capital.

Then Roe made a decision that changed the course of his life. He decided to work on Sen. Slade Gorton’s campaign. And he didn’t get just any job. He became the senator’s driver. It was 1988 and Gorton was running against liberal congressman Mike Lowry. It was Roe’s job to drive the senator to and from campaign functions in Gorton’s well-used beige Ford LTD. Sometimes Gorton’s dog Brigadoon came along for the ride. During those drives, Roe chatted with the senator — sometimes about the inconsequential, sometimes about the issues of the day.

“I thought it was the best job on the campaign because I spent my time with the candidate and not back at the office stuffing envelopes,” Roe says.

After Gorton won the election, Roe accompanied him to D.C. and worked in his office. The experience connected him with important and powerful people. He was immersed in “an environment of smart people trying to do good things” — people such as Mike McGavick, who later served as CEO of Safeco. He credits that time as shaping and steering all that came later. It’s in D.C. that he met his wife, Perri, who worked nearby for Bill Bradley. After his time in D.C. ended, Roe returned to Seattle and joined a consulting firm started by people associated with the Gorton campaign. A few years later, one of his consulting clients became Blue Cross of Washington — what’s now known as Premera Blue Cross.

Initially, Roe thought he might go into politics. Once he entered the business world, he realized he was, as he puts it, “a results-orientated person.” He found the public sector more focused on process.

“My feeling is if we’re going to do something, let’s do it to some effect,” he says. “Let’s conclude the work. Let’s move forward.”

• • •

Roe moves forward with some considerable challenges ahead.

Premera got pummeled in the press earlier this year after its lobbying efforts stripped a database requirement from a widely supported bill. The database would have allowed consumers to compare medical procedures from hospital to hospital.

Then, in a press release, the state insurance commissioner blamed Premera’s lobbying for “gutting” a different insurance bill that was supposed to protect consumers from Ponzi schemes and financial meltdowns.

The organization got labeled as one that doesn’t support transparency.

That bothers Roe, who says the company believes in transparency and already discloses the cost of services. He says the matter has nothing to do with transparency. The insurer didn’t want to turn over proprietary information to a third party. It contends that the numbers wouldn’t have relevance because patients couldn’t see how much of a particular service was covered by their health plan. The company was concerned about the long-term cost of the database and that those costs might be passed on to health plans and their customers.

“Premera is a collaborative place,” he says. “The extent we were portrayed as not part of the solution was difficult for us and is not consistent with how we like to do our business.”

More pressing than bad PR is the ever ballooning cost of health care, which is just under one-fifth of the gross domestic product in the U.S. and is expected to rise exponentially in the coming years.

Roe sees an industry that holds an ever larger place in the economy. He sees more integration and leaps in technology that allow hospitals, doctors and insurers to share patient information. He sees consolidation of the industry, as hospitals and providers form partnerships. For instance, Premera is working with “accountable care organizations” — networks of providers who are paid a premium to deal with all of a patient’s needs.

One of the biggest changes is a move toward focusing on wellness, he says. The old fee-for-service model rewards doctors and hospitals for performing more procedures. Instead, Premera and increasingly other health care organizations are talking about how to keep people from needing procedures in the first place.

With the Affordable Care Act, more people are shopping for health plans as individuals, not through an employer. Roe says that’s driving some good change in the industry as consumers seek information about the cost and quality of care. It also creates tremendous unknowns.

People in this state could buy individual and family plans beginning in October 2013 through the state-run Washington Health Benefit Exchange. Nearly a million individual and family plans were purchased. The majority of plans purchased were those offered by Premera or its subsidiary LifeWise.

Premera, of course, is pleased to have the customers. The nonprofit now serves just under 2 million members and is growing. In the past nine months, Premera and LifeWise’s individual market grew by 70 percent. The insurer took on 66,000 new individual members just through August. The rub is selling health care plans to individuals is riskier business than providing coverage through employers. Premera and other insurers must set rates months in advance. They’re serving new customers with new products and new rates based on assumptions rather than claims data.

National health care reform opened coverage for all, and that’s good, Roe said. But perhaps just as important, it brought all the key stakeholders to the table.

“It’s brought people together,” he says. “We’ve got to talk about how to fix this system because it’s in need of change.”

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