How Aetna snagged a multibillion-dollar state contract from BCBS North Carolina

Starting in 2025, Aetna will take over a three-year health benefits contract for more than 740,000 North Carolina state employees, public educators, retirees and their dependents, upending a 45-year relationship between the state and Blue Cross and Blue Shield of North Carolina. 

The contract can be extended up to five years total and includes healthcare spending of more than $17.5 billion over five years.

Becker's sat down with Jim Bostian, president of Aetna's Midsouth and Capitol markets, to discuss how his team won out among competitors to administer North Carolina's state health plan. You can listen to the podcast version of the following conversation here.

Question: Why was North Carolina looking to replace its state health plan administrator?

Jim Bostian: I cannot speak on behalf of the state health plan, so I don't know that they were necessarily looking to make a change. Historically, the state puts out bids every three to five years, and this time was no different. The carrier that currently holds the business has held the contract for over four decades, so we were thrilled to earn the business for 2025. We think that was based on the merits of our proposal. 

Q: Why do you think Aetna ultimately beat out your competitors?

JB: We delivered a comprehensive package for the state health plan, which included our robust statewide provider network to serve North Carolina's state health plan members in all 100 counties. When we went through the RFP process, we analyzed a full year of the state health plan's provider claims and were able to confirm that over 98% of the claims and over 99% of claims dollars would have been paid to in-network providers under Aetna. We also offered competitive fees and very strong network discounts. Prior to my current role, I led Aetna's provider network team in the Carolinas for eight years, and over that time we methodically developed a comprehensive and competitive statewide provider network. At the end of the day, we submitted a very competitive response to the RFP and we're proud that we came out on top.

Q: How have you been communicating the benefits of this major change to all involved stakeholders?

JB: In building these relationships across all 100 counties in North Carolina, we've already been out in the field meeting with stakeholder organizations, and our state health plan team is based here too. We're totally committed to having a strong relationship with each of the long list of stakeholders. We're also heavily involved in our communities by supporting several local events. 

One of my favorite events took place a few weeks ago in Chapel Hill where we sponsored a back-to-school event with a local community center. We gave away school backpacks and provided health screenings and flu vaccines. As a UNC alum, it was a truly awesome opportunity.

Q: Price transparency is top of mind for those overseeing health plans today. Why do you believe Aetna is a leader in this space?

JB: We drive transparency through the tools that we offer our members and the information that we share with our benefit plan sponsors. That said, I believe that we all agree that healthcare is too complex and opaque. Improving transparency and simplicity are clear priorities, not just for our plan sponsors, but also for our plan members. 

In North Carolina, no plan sponsor feels more strongly about this than the state health plan, which spends billions of dollars of taxpayer money on healthcare every year. We think that all of our plan sponsors have the right to know exactly how much they're paying for healthcare and to whom, and we're committed to making that information available to them. For our plan members, we also believe that they have the right to know what costs they will be facing for upcoming medical services. For that, we have a robust self-service member portal that provides cost estimates that are tailored to specific benefit plans, providers, and services that are being sought. Additionally, we have the Aetna health concierge team that can help our members navigate just about any issue, from understanding benefits to finding a provider, scheduling an appointment, answering claims questions, and navigating our wellness app and online tools.

Q: Is there a larger story here beyond the North Carolina state health plan transition? 

JB: Many of the things that we've talked about with regard to North Carolina are also indicative of the change that is occurring across the industry. We're doing a better job of listening to our customers, innovating to solve problems, being more transparent, more user friendly, and having a strong commitment to reducing complexity.

More investment is certainly needed, but serious investments are already being made, both by payers and providers. In areas like improving interoperability, it is critically important to be able to provide better and more timely information to patients, members and providers at the point of care. Top payers like Aetna are also increasing their focus on better management of chronic conditions, versus just paying for acute care episodes. We're seeing more of that across all of those markets. It's also incumbent on our industry to pay better attention to improving health equity in our communities. 

Health plans are more capable and more competitive than ever before. Customers realize that they have a lot of plan options and they can change carriers now with more confidence. The strong competition in the industry is healthy from our perspective. It's key to helping control costs, improve care and drive innovation so that we can create an overall better customer experience.

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