published Saturday, February 18th, 2012

BlueCross BlueShield: Change atop Cameron Hill

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    File Photo The BlueCross and BlueShield logos hang on the company's old building in downtown Chattanooga.

A former hospital executive will head Tennessee’s biggest health insurer next year.

Bill Gracey will succeed Vicky Gregg, who has served as chief executive officer at BlueCross BlueShield of Tennessee for 10 years, the company announced Friday. Gregg retires Dec. 31.

Her departure comes as the company adapts to the changing face of health care. Gracey said he plans to complete the initiatives Gregg started during her tenure as head of one of Chattanooga’s biggest employers.

“We are right in the middle of a transition from a health insurance company to a health solutions company,” said Gracey, the insurer’s chief operating officer since October 2010.

The sweeping Affordable Care Act changed the way health insurers must do business and, whether or not the act survives as it is now, Gracey said, it pushed insurers to take a fresh look at their operations.

“It’s been one of the great opportunities,” he said. “Whether we like or dislike the act, we all support the idea of health care reform.”

Gracey has overseen BlueCross’ government and commercial business since joining the insurer in 2009. Before moving to Chattanooga, he served as chief operating officer of Nashville-based LifePoint Hospitals and served for four years as a BlueCross board member.

While at LifePoint, Gracey helped grow the system from 23 to 51 hospitals in 17 states. Before helping lead LifePoint’s 21,000 employees, Gracey held leadership positions at a variety of nonprofit, investor-owned and privately owned operations, including Nashville-based Hospital Corporation of America.

After taking charge of BlueCross’ 5,300 employees, Gracey said he plans to focus on individual consumer products. In the coming years, the Affordable Care Act will shift health insurance from a government- and employer-selected model toward more of an individual-consumer-selected model, he said. BlueCross plans to make its products more customizable, personalizing plans for individual consumers.

To illustrate the point, Gregg uses her iPad.

“They make iPads, but I can decide what applications I want on there and download them very simply,” Gregg said. “They are going to want that same level of customization, that same level of support.”

That familiar strategy is revolutionary to the health care industry.

“It means, quite frankly, a wholesale paradigm change,” Gracey said. “They [consumers] will be seeing health care options side by side, so at the same time we need to improve our offerings, we also need to improve our administrative price structure.”

LEADERSHIP CHANGE

Gregg, 57, knows plenty about how the health insurance system works. Before coming to BlueCross, she collected more than 25 years of experience as a nurse, working in hospital administration, long-term care and health care benefits and financing.

While leading the company, she helped push for electronic medical records, oversaw construction of the company’s Cameron Hill headquarters campus and established the Tennessee Health Foundation.

“The one thing that I feel so good about is the formation of our foundation,” she said. “We have been able to fund some terrific programs within the state that really truly have had an impact on people.”

Under Gregg’s leadership, BlueCross boosted enrollment by more than one-third and kept premium increases below the industry average. She is the highest-ranking female executive in Chattanooga, and was one of the first women to head a major business in Southeast Tennessee. In 2010, she was given a compensation package of more than $4.4 million.

Gracey said he plans to continue Gregg’s leadership style, but increase the responsibility of top executives.

In the past year, 12 people in top leadership positions left BlueCross of Tennessee, something Gracey largely attributes to retirement.

With experience both as a hospital and insurance head, Gracey said he feels particularly well-suited to lead BlueCross.

“The biggest advantage of having worked on different sides, different pieces of the puzzle called health care, is I understand the overall view of health care very well,” he said.

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