Illustration by Robert Ball

Blue Cross Blue Shield’s New Marshall

In a time of rapid industry change, CEO Bert Marshall is bringing a public-health sensibility to the giant insurer.

Bert Marshall knows that life can turn on a dime. Marshall, who was then president of health insurer Blue Cross and Blue Shield of Oklahoma, arrived home from a vacation on a Saturday in late May 2012. He’d been in France celebrating his 30th wedding anniversary.

There was a message on his answering machine from Martin Foster, executive vice president of Health Care Service Corp., which oversees BCBS health plans in Illinois, New Mexico, Oklahoma, and Texas. Call me tomorrow, Foster said.

Marshall did. Foster told him that Darren Rodgers, CEO of Blue Cross Blue Shield of Texas, was moving to Chicago to handle the company’s health insurance exchanges created by the Affordable Care Act. Foster asked Marshall if he’d be interested in replacing Rodgers in Dallas.

Marshall was an Oklahoma guy through and through. His family roots in the Sooner state can be traced to the 19th century. While he earned his undergraduate degree in economics and a law degree from the University of Oklahoma in the 1970s and early ‘80s, he says proudly, the football team won five Big 8 and two national championships. He’d spent his entire career in the state.

Even so, Marshall didn’t hesitate. His daughter, Sarah, was a Texas Christian University graduate living in the Fort Worth area. He could be less than an hour’s drive from her, instead of five. Besides that, he recalls, the offer was a “huge compliment.” So he accepted it.

Marshall says the move wasn’t a big stretch: “People said, ‘You’re going to find Texas familiar: the people, the culture, and the politics are virtually identical. Except it’s really, really big. There is a lot of dirt in Texas.”

There also are a lot of customers in Texas for Blue Cross Blue Shield. The company’s Texas operation has nearly 6,000 employees doing business in all 254 Texas counties. It works with nearly 40,000 physicians and 400 hospitals to serve 4.8 million members. It has slightly more than half of the state’s market share in commercial health insurance. In Dallas-Fort Worth, it also has fierce competitors in United Healthcare, Aetna, and WellPoint.

This abrupt change—moving from Oklahoma to take on a big new challenge in Texas—was nothing new in Marshall’s book. Abrupt change had also come when he was just 10 years old.

Marshall’s father, a World War II veteran, had worked his way up from roughneck to nomadic executive at the Phillips Petroleum Co. Marshall was born in an oil camp in Venezuela. During his first decade of life he’d also lived in Texas, New Mexico, Libya, and Egypt.

One day his father returned from a trip to Beirut. He’d just been diagnosed with lung cancer. He announced the family would be leaving Egypt to return to Oklahoma. The family packed their bags, left everything else behind, and flew out of the Cairo airport the next day. His father died six months later at the age of 57—the same age Marshall is now.

Marshall vividly recalls the shantytowns outside the Libyan capital of Tripoli, a landscape dominated by clapboard lean-to tin-roof dwellings. It was his first glimpse of abject poverty. Such early experiences “and travel inevitably shape you,” he says. As a result, he adds, “I am a firm believer in diversity. I embrace different cultures and people.”

As a member of the Cherokee Nation of Oklahoma, Marshall himself is a member of a minority group. His great-great grandmother was named Green Feather. Although he is only 1/64th Native American, his unbroken lineage gives him Cherokee voting rights.

So, it’s not so surprising that an Indian headdress and shield are mounted on the wall of his 15th-floor office in Richardson. From there Marshall has an expansive view of the President George Bush Turnpike and Central Expressway. Blue Cross Blue Shield of Texas moved into its 1 million square-foot development in early 2010. Prior to that, the company was in five separate leased locations.

Marshall has a passion for public health. He doesn’t just want to improve the health of his company’s customers to lower healthcare costs. He says he wants to improve everyone’s health, period. This is not how most insurance executives approach their jobs.

During Marshall’s tenure as CEO of Blue Cross Blue Shield of Oklahoma, BCBSOK launched a Caring Van program that brought free immunizations—the ultimate public health activity—to schools, day cares, churches, and community events. In 2009 the program immunized 20 percent of all those served by the Oklahoma City-County Health Department.

That was followed in 2011 by an initiative called “Healthy Kids, Healthy Families.” The 3-year effort promotes nutrition education, physical activity, and safe environments for the state’s 500,000 children. Marshall challenged his employees to join him in a “couch to 5K” program, running weekly with employees to prepare for the Route 66 Quarter Marathon.

Then there were Marshall’s leadership roles in public-health organizations and events. The Oklahoma Tobacco Use and Prevention and Cessation project, for example. The Alzheimers Association Memory Gala. The American Heart Association Tulsa Heart Walk. The Oklahoma State Health Department’s Health Improvement Plan Committee, of which BCBSOK was the only non-public member.

Marshall says he was especially “rabid” about the anti-tobacco efforts. “The difficult part of healthcare is getting patients engaged in their health,” he says. “We’re trying to get people to help themselves.”

Marshall also had a leading role with the Central Oklahoma Habitat for Humanity. He chaired the family selection committee that determined who would get houses. Ann Felton, chairman and chief executive officer, praises his diplomacy in handling those who were turned down. “He was very personable, creative and outgoing,” she says. “He represented us well in the community. You usually don’t see [the insurance business] get into housing. But he made that link back to health. He had a heart for our ministry.”

Eduardo Sanchez, a former Texas Commissioner of Health and BCBSTX chief medical officer who’s now deputy chief medical officer at the American Heart Association, says Marshall understands public policy issues well. “Bert seems to love government and policy. It’s almost a hobby for him,” Sanchez says. “He has embraced public health solutions for the issues where it makes sense, like child immunization. He understands that we depend on a foundation of health that is dependent on public health.”

Marshall’s public-health perspective may have been shaped by his early career in state government. He is not a health-insurance “lifer.”

His parents, both children of the Depression, told him he was going to be a doctor or a lawyer. “And I wasn’t good at science,” he quips.

He graduated from law school in 1981 at the height of the oil boom. Newly minted attorneys did a lot of title work in Oklahoma. His new wife, a law school classmate, opted to do that. He wasn’t interested. Instead he was hired by the state’s insurance department, where he spent nearly a decade as a staff attorney, general counsel, and deputy insurance commissioner. He left in 1990 to enter private practice before taking an executive role at United Insurance Co., overseeing group accident and workers’ comp programs. He joined BCBS of Oklahoma in 1996.

Marshall says Gerald Grimes, the former Oklahoma commissioner of insurance, was his mentor. “I was very fortunate to work for him,” Marshall says of Grimes. “His lessons were: Always do the right thing. Do not take shortcuts, in business, or in government. And all ‘ties’ go to the consumer.”

Blue Cross has a long, pioneering history in Texas. The company actually began in Dallas in 1929, when Justin Ford Kimball, vice president of Baylor University’s healthcare facilities, developed a plan that guaranteed teachers 21 days of hospital care for $6 a year. His novel idea spread to other employee groups throughout the city—and eventually throughout the nation.

Marshall has spent a significant amount of time traveling the Lone Star state, trying to get his arms around it. He met with the CEOs of the Texas Medical Association and the Texas Hospital Association. He hobnobbed in San Antonio with the company’s top brokers. He’s frustrated that he can’t do more. His well of relationships ran deep in Oklahoma. Essentially he was starting from scratch in Texas.

Sanchez, however, says Marshall has moved swiftly to elevate the company’s profile in Houston and San Antonio. “His tool kit of traits and how he sees the world is perfect for the time,” Sanchez says. “He is an active listener. He is very engaged. He brings a tradition of building relationships and partnerships in Oklahoma and he has brought that to Texas. He is all about relationships. He uses that word often.”

Because of the Affordable Care Act, Marshall will be guiding BCBSTX during some of the biggest changes ever to hit the health-insurance industry. For insurers, health reform is a good-news, bad-news scenario.

Of the estimated 30 million newly insured Americans because of the ACA, two-thirds either will be individuals from the health-insurance exchanges or from employer-sponsored insurance sold by private insurers. Exchanges are expected to create at least $50 billion in insurance premiums in 2014 and about $200 billion by 2021, according to the PwC Health Research Institute.

On the other hand, the ACA places significant restrictions on how health insurers may run their businesses. The law prohibits setting premiums based on a person’s health, bars lifetime dollar limits, and requires insurance companies to spend at least 80 percent of premium revenue on medical expenses.

Healthcare is changing in other significant ways as well. One of the biggest shifts occurring is paying providers for performance rather than volume. In January, BCBSTX formed a strategic alliance to improve patient care and help manage costs with Texas Health Resources’ accountable care organization. (ACOs are intended to improve patient health and reduce unnecessary healthcare expenses, leading to lower costs.)

The THR/BCBSTX ACO, one of the largest of its kind in the nation, will be available to patients served by THR’s 25 hospitals. THR has 5,500 physicians with active staff privileges. The alliance extended a previous agreement that allows more than 1.6 million Blue Cross members access to in-network healthcare services at THR hospitals and 18 outpatient facilities.

Insurers historically have worked mainly through intermediaries to insure people, whether employers or healthcare providers. The health exchanges will put them squarely in the retail business.

The newly insured will be less educated, more racially diverse, and more than twice as likely to speak a primary language other than English. They also are more likely to have lower incomes, with many cycling between Medicaid and the subsidized exchanges.

BCBSTX has launched a statewide education and outreach initiative targeting Texas’ uninsured residents who would be eligible for the health insurance exchanges, which will start up in January. 

Texas has chosen not to have a state-specific health insurance exchange, relying instead on the federal government to serve the state’s estimated 2 million eligible residents. States that have elected to run their own exchanges are making efforts to market these exhanges to their residents by state government agencies. In Texas and other states without custom exchanges, it will be up to the private sector to get the word out.

The “Be Covered Texas” campaign, fully funded by BCBSTX, seeks to help the state’s uninsured population understand how the new health care law affects them, and how they can obtain individual health insurance. Enrollment for the insurance exchange will begin in October.

Marshall believes BCBSTX has a responsibility to undertake this effort because of its statewide reach, even though the company’s name is not mentioned in campaign materials. Consider it another expression of Marshall’s public-health philosophy.

Marshall describes his management style as informal and transparent. He recognizes the seismic change that’s shaking up the health-insurance industry—and the potential effects on his organization. So he says he’s beefing up the company’s media-relations department and is aiming to create a greater community focus, especially because of the health exchanges.

Sanchez says Marshall has asserted himself before when the company encountered “bumps in the road,” at some personal risk. “He stepped up and put his own reputation on the line in instances that likely would have resolved themselves,” Sanchez says. “He didn’t need to do what he did, but in doing so he’s said, ‘I want to be held accountable with Blue Cross.’ Those situations were resolved better because he got involved.”

Michelle Riddell, who was Marshall’s chief of staff in Oklahoma, followed him to Texas as vice president of strategy, communications, and community investment. She marvels at his ability to sift and prioritize the massive amounts of information that come across his desk. “You know what his priorities are. You know what his goals are,” Riddell says of the company’s new top man in Texas. “You appreciate someone with that kind of clarity. He values people and what they contribute. He has a very inclusive style. He’s really the best leader I ever worked for.” 


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