Horizon CEO Marino on expensive lobbyists, OMNIA and Medicaid

Source: NJBiz.com
Gov. Chris Christie has publicly called out Horizon Blue Cross Blue Shield of New Jersey CEO Robert Marino on numerous issues, including the company’s surplus, the compensation of its top executives and its highly paid public-policy arm. In an exclusive interview with NJBIZ from his office in Newark, Marino talked about why the company took a more proactive stance on lobbying:
“About two years ago, I went to our board of directors and said one area of the company that I think we really needed to take a hard look at and strengthen — this is before OMNIA — was our public relations, government affairs and communications function. There really was not significant change in those three corporate functions for probably the past 10 years. And, if you look at the company, where we are today, and where we were 10 years ago, this is a very large organization.
“The company grew from $5.5 billion over that period of time (10 years) to a $13.4 billion enterprise. We have a major stake in health care policy in the state. We have a major stake in driving the state towards a new paradigm called health care value. I felt strongly that this company needed a stronger voice than it previously had. Not to criticize the former staff and the former voice we had. That was the right voice at that time when this was a smaller company. So, I suggested to the board that we needed to realign those three functions and needed to strengthen that and have a greater voice in policy. Particularly health care policy coming out of Trenton…
Because of our mission, we decided to do OMNIA. We knew we were going to get blowback. Did we underestimate the blowback? Absolutely. It wasn’t a pleasant experience. I sat in here with the senior staff and there was a point where we said, ‘Holy shit, what did we do? Should we open this thing up to more?’ I went home that weekend and thought about it and said, ‘Nope, no weak knees, we stay with the mission, we need to achieve what we wanted to achieve here.’ One of the proudest things I am proud of — 70,000 previously uninsured people now have access to coverage.
“We have 900,000 managed Medicaid members. I think that’s about 52 percent market share. We are in all 21 counties, as opposed to our competitors, who are not. Our profit margin last year was 1.9 percent in Medicaid; our competitors’ average margin is close to 5 percent. We spend less on administrative costs and more on medical cost for our Medicaid members than any of our competitors — which is a good thing, because that is what you want. You want your dollar to be spent more on the medical cost than the cost of running a business.”

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