Originally published by Crain's.
Joan Budden of Priority Health has some advice for her fellow CEOs, even those whose companies have nothing to do with health insurance.
Grow to scale.
"Think big and start small," she told me in a wide-ranging interview that touched on the politics of health care and the unique challenges facing her $3.7 billion Grand Rapids-based company serving nearly 800,000 members.
Budden, the company's president and CEO, said her team of 1,200 employees is adept at identifying a problem, fixing it for a small group of members, and then broadening the solution throughout the health plan.
One of her biggest challenges, she said, is helping employees understand that they can't solve every problem. "Where it is tough for me is when people are so well-intentioned that they want to take care of the member and they want to understand how the business side works," she said.
Some ask her directly, "Why do we have to make any money?"
To those employees, Budden explains that Priority Health keeps its administrative costs low and operates on a 2 percent profit margin. "It is hard to convey how important it is for us to remain financially solvent — for people who just really want to do good for people," Budden said, expressing pride in her employees' dedication to service. "Those are hard conversations."
The hardest conversations are about politics. Budden is clearly annoyed at Washington for failing to adapt and improve the Affordable Care Act, which expanded health care coverage to millions of Americans. "We could have gone with the ACA and made incremental changes from there and probably have gotten to a better place," she said. "Instead, we are trying to reverse the direction of the ACA, which is causing true disruption in the market."