Tricia Keith believes deeply that the state of healthcare is at what she calls a “turning point,” with surging medical costs making it more expensive to provide and more cost-prohibitive for patients to receive.
There are a variety of variables to the problem, she says, including increasing medical expenses, skyrocketing drug prices and how healthcare is paid for.
Now Keith is in a unique position to help do something about it, having replaced the retired Dan Loepp as the president and CEO of Blue Cross Blue Shield of Michigan, the state’s largest private insurer, earlier this year.
“We are working all the time around access, around affordability because those things together create the recipe for personal wellbeing,” Keith said in a recent interview with Corp! Magazine. “And so, we need it to work for people, and we need it to work for employers.”
The key to reigning in the problem, Keith says, is getting all of the components – hospitals, physicians, drug companies, government, regulators – to work together. That’s not always the case, according to Keith.
“We have a lot of components … and they work best when they work together, but sometimes they’re working at odds and they’re competing forces,” Keith said. “Everybody plays a different role, but it’s important that we harmonize them and get them to work together because, in the end, we are all working for the same people. And that’s why this really needs to work.”
But it isn’t working right now, at least not as well as it needs to be. According to Keith, hospital costs surged some 250 percent – “That’s almost four times the rate of inflation on everyday things like groceries and gas,” she said – between 2000 to 2024 or, put another way, it equates to 47 cents of every healthcare dollar. See the video clip, click below.
In 2024, Blue Cross experienced a $3 billion increase in those costs in 2024 over 2023. With drug prices skyrocketing, 21 cents of every dollar was spent last year to promote access and affordability and wellbeing.
From 2022 to 2023, the last year for which data is available, drug prices increased 35% on some of the same drugs. BCBSM, she said, experienced a $900 million increase in pharmacy costs year-over-year between 2023 and 2024.
“They’re big numbers that are adding up and that is what drove us to the over billion-dollar loss that we had last year because prices haven’t kept up with the premiums that we pay,” Keith said. “So, when we talk about affordability, we recognize the severe strain that paying for those premiums has on businesses, has on families, personal finances. We’re raising the conversation about those components so that people understand.
“The way that system has been working together, frankly, it’s not working very well and we’re failing,” she added. “And so, we’re raising this conversation to make sure that people are working together.” See the video clip, click below.
Keith’s unique perspective has been honed over a long career with the Blues. In a nearly 20-year career with the company, Keith has served in several senior leadership roles. Before being tapped to replace Loepp, she was Executive Vice President, Chief Operating Officer and President of the Emerging Markets division.
The experience, she says, has “given me a grounding in what our organization is today and what it needs to be in the future.”
“My vision is centered on the people we serve, and we serve them best by continuing to transform, innovate and deliver value,” Keith said. “We represent them by staying grounded in our commitment to accessible, affordable care every day.”
The company launched a program they call BCBSM Accelerated to look internally at how to transform the company and to help with administrative costs. They put people in place to take out $600 million over three years, $285 million of it this year alone.
“A lot of the actions that you’ve read about in the press are all seeking to move us forward doing that, but all with the goal of creating accessible and affordable healthcare for our members,” Keith explained.
So how does the industry rein in the expenses and make health care more affordable? Keith called it the “billion-dollar question.”
First of all, she said, the goal is to have hospitals and their pharmaceutical partners to be successful. Doing that, she said, requires something she thinks might be missing in the pharmaceutical industry: Transparency and competition.
“We want transparency and competition to help drive that,” Keith said. “And, particularly if you think about it in the prescription drug industry, they are largely unregulated right now and there is no transparency in the cost prices. And we believe that this unaccountable model has an opportunity to be improved because, in the end, we believe that we need to choose patients and members first in that. See the video clip, click below.
“And so, we applaud some of the efforts that are happening in the administration right now to bring greater transparency in prescription drug costs to our members in that these escalating costs are a concern on what we do,” she added. “And so, some of the efforts that the administration is taking, some of the executive orders, we have been supportive of.”
Keith believes policies should encourage competition. There is a good way, she said, to “balance both innovation and the ability” for the drug companies to do well in that through things like different payment models.
Frankly, she pointed out, there are “a couple of payment models” out there right now where the drug companies will only get paid if the treatment works. Keith thinks that’s a responsible way to think about some of treatments in the gene cell therapies that are “coming out in the $4 million per dose price tag.”
“Those are the kinds of things that we’re looking at,” she said. “We’re asking for help with price transparency. So those are a couple of things that we’re advocating on behalf of for the prescription drug area. And remember that’s 21 cents of every dollar that we’re spending right now in health care.”
While the government and regulators are part of the financial equation for health care – Keith acknowledges them as integral parts of the team – Congress didn’t necessarily do them any favors in terms of bringing down the costs.
When they passed President Donald Trump’s so-called “Big, Beautiful Bill” last month, they left in nearly $900 billion in cuts to Medicaid. While it was being debated, Keith told Corp! Magazine she was “very concerned” about what was in the bill pertaining to Medicaid.
According to Keith, Blue Cross Complete of Michigan, a subsidiary of BCBSM, covers some 325,000 people she says are at, near or just above the federal poverty level who depend on services provided by Medicaid.
“Those are really important safety-net programs that we want to be part of, and we want to make sure that the people who need it most can access those things,” Keith said. “Obviously we’ve come through a period over the last four or five years where Medicare Advantage has been deep in the crosshairs, and those are our seniors, and we want to make sure that we’re able to continue to provide the type of services that our seniors so desperately need.”
She said Blue Cross covers some 770,000 seniors who rely on Medicare Advantage products.
“We think having a strong system to support our nation’s elders is really important,” Keith said. “And then we are also watching what’s happening in the individual market with the Affordable Care Act. I think at the end of this year, the federal subsidies are set to expire that have helped a lot of people who
are just above the federal poverty line afford individual insurance.
“And so, we we’re watching that and concerned what could happen there,” she added. “Obviously, what happens in the nation will happen in Michigan, and we want to make sure we’ve seen the uninsured rate go down in Michigan. I think we’ve been amazingly successful in Michigan with that.”
Seniors would get the preventive services they need, and Keith said she wants to see the hospital systems be financially successful and provide the quality programs that they have, as well.
In the hospital-payer mix, “they make really all their money” on the commercial market and should break even on Medicare while losing money serving Medicaid.
“Having a strong system to support what they have so that they can continue to invest and to be the great partners and employers that they are around is important, too,” Keith said. “All of these things are so interlinked, and that’s really the conversation that we’re trying to have around making sure that the system really works best together.”
Specific Medicaid cuts haven’t been announced yet – the bill includes some work requirements for what legislators have called “able-bodied” adults – Keith worries unspecified cuts could affect insurance providers’ ability to cover those who need it, specifically poor, uninsured people who would likely end up in hospital emergency rooms seeking care.
“We know the uninsured population has, in the end, higher health costs because, unfortunately, the uninsured end up in the ER with higher acuity levels, and in the end, hospitals have to deal with the uncompensated care issue and helping the uninsured,” Keith said. “We believe it’s better to have the safety net programs that will assist the Medicaid population and others making sure that folks are insured so that they get the preventative care earlier so that it doesn’t reach those ER-level concerns.” See the video clip, click below.
As insurers navigate bringing down the costs and continuing to provide quality, affordable health care, hospital systems move between three competing goals: Advancements in biotechnology, advancements in prescription drugs and the pressure of doing it all in an affordable way.
That means they have to balance the need for medical cures and advancement in health care against the cost of getting it all done.
Keith called it “a conundrum” that she believes starts with innovation. But it has to be not only ground-breaking, but it also has to be accessible and affordable.
“These innovations won’t be doing anyone any good if nobody can afford them,” Keith said. “We have to create a system that rewards innovation, but in ways that the advances don’t come at the expense of affordability.”
There are things Blue Cross is doing, including extensive work on effective medical policy, developing “deep, rich, rigorous medical policy that we have all around innovations” to improve members’ health.
They work directly with multidisciplinary physicians to ensure the latest clinical evidence is available. They work “deeply with our partners from a lot of the professional associations,” as well.
And then, in the world of pharmaceuticals, there are biosimilars and what is happening in drug cost reform. There are, in some cases, she said, lower-cost alternatives for biosimilars that “we can switch members to that avoid a lot of cost, and we’re advocating a lot for more biosimilar adoption as well.”
“In 2024 when we switched just from two different name brand drugs, names that you would recognize from seeing them on the television all the time, directly marketing to you, a process (makes them) directly tax deductible for that,” Keith said. “We’re the only country that allows it.
“But in that switch, we saved almost $60 million on two drugs alone in 2024,” she added. “And so, it’s big dollars, but all of those individual efforts are things that add up to promote affordability, and it’s critical that we continue to sweat out each of those initiatives to do that.” See the video clip, click below.
While she wrestles with the overall affordability of health care, Keith is also working out some of BCBSM’s financial challenges she inherited. She believes that, as the state’s largest insurer, BCBSM plays a “critical role” in Michigan’s economy and Michigan’s ecosystem
“That’s something we absolutely hold dear as we’ve been talking with our board about how we move forward as a company,” she said. “It is 100-percent mission-driven. And one of the things that I felt great about in seeking the role as CEO is that when you walk down the halls of this company, people can cite our mission off the top of their heads to us.
“We believe in being our members’ partner to improve their care and health, bringing innovative products forward,” she added. “And so that’s one of the things that you can feel really good about for the people who are providing health care right now.”
In addition to its efforts to reign in health care costs, BCBSM is involved in a variety of efforts to strengthen the community. For instance, Blue Cross is a major sponsor of The Parade Company and its events, such as America’s Thanksgiving Parade – the company debuted its new 100-foot long, 25-foot-high float, “A Better State of Health” at last year’s parade – and the Fourth of July fireworks show sponsored by Ford.
“The Parade Company is a wonderful institution here in Detroit and creates a couple of really great signature events that bring people together,” Keith said.
“The Ford fireworks that … is really about bringing people together, and it’s a good metaphor for what we’re trying to do as a healthcare insurance company, bringing people together to talk about solutions for the system.”
But Keith believes other programs Blue Cross participates in are even more geared toward nonmedical determinants of health.
For instance, the company’s work with the Michigan Health Endowment Fund, she said, is an example of that. This year Blue Cross eclipsed $1 billion in supporting that, funds that go directly to health and health care needs in the state of Michigan, particularly for kids and seniors.
More importantly, she said, Blue Cross is “deeply proud of our Strengthening the Safety Net grant program that we do that has free or low-cost medical, dental, mental health services for folks that are uninsured or underinsured, and in most of those dollars go to the federally qualified health clinics.
“We think that that work is deeply important,” Keith said. “One of our signature programs is the Building Healthy Communities program, and that’s been a school-based partnership that we’ve done over the years to bring healthier eating habits and frankly, in some cases, even salad bars to schools so that people can learn at an early age some of the habits that are going to help them in the long run.”
The Blues also have programs such as a food pantry grant program and others, and a Blues Caring Crew that sends employees into the community to do everything from cleaning up school playgrounds to other projects.
“It’s really, really great to see that Blue Cross Complete has a really great program where they bring teddy bears to baby showers for expectant moms,” she said. “We have a lot of really fun and great programs that in a fun way get the message out around improving people’s health and wellness.”
From a business standpoint, Keith has goals, including accessible, affordable health care, something she says is a daily focus for the staff.
But as she reflects on what she’d like to accomplish in her new job, Keith recalls the mentoring given to her by Loepp, and she wants to pass that forward to “as many people as I can.”
“I’m in my 20th year with the company and had an amazing opportunity through that time in being mentored by (Loepp),” Keith said. “I was given a ton of opportunity to do that, so certainly I want to reciprocate that with as many people as I can. It was over a year ago now when I was announced as the CEO-elect and … one of the things that was really heartening to me is the women in the company and in the community who said it was so great to be able to see a woman be named for the first time as president and CEO.
“That, I expected, “she added. “What I didn’t really expect was a lot of the men to make the comments that they did. And what they said was, we’re talking about you around the dinner table with my daughters. And that made me feel really good that it was being recognized by the selection that the board made in this as well, serving as a role model, frankly, for our employees.”
To enhance the point, Keith said she shares her personal history with employees. She grew up on a dairy farm in northwest Michigan, a farm that’s still active after 131 years. Her first job was taking care of the calf barn.
“When you take care of the calf barn, that means before school and after school, you show up and you feed them and you take care of them,” Keith said. “They don’t eat if you don’t show up. It’s where I learned early work ethic and the value of showing up. And so certainly in that case, it meant showing up physically.
“But I also talk with employees and young folks about how showing up also means showing up emotionally,” she added. “It means showing up intellectually. It means having the courage to ask the question and face the hard facts. And so that’s something that I try to model every day.”
