Tom Vanderheyden was the executive in charge of Harken Health, an innovative startup from Minnetonka-based UnitedHealth Group that drowned last year in red ink. Subscribers in Chicago and Atlanta were drawn by the startup's offer of free wellness classes and "all you can eat" primary care with no copay at company-owned clinics, but Harken suffered like others in the individual market under the federal Affordable Care Act. Vanderheyden has now landed at Eagan-based Blue Cross and Blue Shield of Minnesota, where he's the executive responsible for diversified businesses.
Q: What did you learn from the experience at Harken Health?
A: Impacting primary care was extremely beneficial for the quality of care that people received, the downstream cost impact and satisfaction. So, we really hit everything that we had ever aspired to hit. Now, that's all on the positive side.
On the negative side, it was ... the bottom of the hill in the individual market, with respect to just medical cost behavior against premium. So, that was the mix. And you may recall United's announcement to depart [most of] the individual market, and the pressure that that ultimately applied.
Q: Was the problem that Harken Health drew sick patients due to a network of doctors and hospitals that was broader than other health plans?
A: We were the only [broad network plan] available on the exchange that year. ... [But] our financial performance wasn't vastly different than any other market participant in Chicago.
A reason that I'm at Blue Cross is the mission-based mind-set. They've been around for 84 years here. They certainly intend to be around for another 84 years. … [They have a] very balanced diversification approach and that's very attractive when you're mission-minded. So, you're willing to ... navigate your way through the down times, knowing it's the right thing for the market and for the experience that people have with your brand.
Q: Is the nonprofit world a better place to launch a startup venture?
A: Without question. Don't presume for any moment that the nonprofit incents lack of performance. If anything, I use this phrase with my team: Aggressive empathy. ... What I mean by that is, when we are mission-oriented and empathy is high in our value set ... we want to be aggressive about defending that empathy, if you will, or defending our members' needs. So, if you could take the mission orientation and combine it with slightly more patience, this team that we have … this is tip-of-the-spear innovation.
Q: Are you critical of United? Were they too impatient with Harken Health?
A: I think United has demonstrated that they are fantastic at scaling proven models. That is the gift of that enterprise. They are operationally excellent. ... I have no, zero bad feelings about United at all. I just — I was there 13 years. ... As I think about where I want to be, in terms of what I want to deliver while I'm on this planet, the mission orientation of this place is what drew me.
Q: The diversified businesses at Blue Cross include two old businesses: Select Account, which administers medical spending accounts for high-deductible health plans; and Clearstone Solutions Inc., which works with other Blue Cross plans to sell Medicare prescription drug plans. What's new here?
A: Select Account passed $1 billion in managed assets this year, which makes it a very meaningful market player. We have members in all 50 states. Next year, we will be partnered with minimally four other health plans out side the state of Minnesota. ...
[With] Clearstone, we will be providing a Blue-branded Part D product in four other states for Jan. 1, 2018, and likely a number of other states in Jan. 1, 2019.
Q: The diversified business also includes new ventures including Blue Cross investments in startups like Learn to Live and Livio Health Group. Will that continue?
A: Part of the diversification story is, yes, we are going to look at long-term, I'll say semi-organic builds, meaning we are partnering with early stage companies in building something material. We may also independently build something material. And we're going to continue to look at the Livios and the Learn to Lives where we are active investors and promoters of their offerings.
Q: At age 13 you left home to enter the seminary and pursue a life of service to others. Has that background shaped your career?
A: Entirely. I don't believe that being on the planet is about acquiring money. I think we're all put on the planet with a set of gifts and experiences, and we are charged to deliver those gifts and experiences to others. I really mean talents and experiences. My favorite quote is: "Your ability to respond is your responsibility."
Q: Is seminary a launchpad for many insurance executives?
A: I've never asked. I don't know that I've ever met any others.
Christopher Snowbeck • 612-673-4744
Twitter: @chrissnowbeck
