Sitting on multiple boards can benefit your company. However, it requires you, as CFO, to stay clear-sighted about your shifting fiduciary responsibilities, Bob Kolodgy, executive vice president and CFO of Blue Cross Blue Shield Association (BCBSA), said last week at CFO Live.
Because of his role at the association, whose 36 member Blue Cross and Blue Shield (BCBS) companies insure 109 million people, Kolodgy sits on the boards of a number of companies. Although their interests align, their vantage points are different, which impacts his role.
"You have to know what hat you're wearing," Kolodgy said in his keynote address at the virtual conference. "I serve on some of these boards as a representative of BCBSA, but when you're in the boardroom and a board member, your fiduciary responsibility to that organization is primary."
Kolodgy chairs a venture fund that backs innovative startups in the healthcare space. He's also a board member of two other venture funds, all of which fall under a parent company called Blue Venture Fund, which has 40 portfolio companies. He's also chair of another fund, called Plan's Investment Fund, and a board member of a healthcare data analytics company called Blue Health Intelligence.
How you communicate when you're on these and your own company's boards shifts as well. "You can't just be the internal voice inside your company saying no," he said. "You have to provide solutions and suggestions. The point is to be able to communicate and balance accountability and advocacy when you're on the inside and when you're on the outside."
One of the big shifts coming out of the pandemic for the company's federal program was a seven-fold increase in virtual healthcare services between March and August, which required the company to act quickly to reimburse for this type of care.
"It required us to put mechanisms in place to accommodate that to pay for it, and make sure our patients knew it was a covered service," he said.
The company also had to act quickly on COVID-19 testing and treatment while also educating people about staying current on their treatments for chronic illnesses.
"If you need to get routine blood tests to look at your blood sugar level, or other things that might relate to some chronic disease conditions, and you're not doing that, you stand to get into a big healthcare situation in the future," he said.
Taken together, BCBS companies invested $7 billion responding to the pandemic, he said. That entailed waiving administrative requirements, ensuring access to care and increasing telemedicine, among other things. "That was a big commitment we made and are still making today," he said.
Affordable Care Act
What happens to the Affordable Care Act is another priority of the company, he said. The prospect of the federal government shutting the program down poses a challenge if a replacement program isn't part of the mix, he said.
"That creates for us a need to make sure we have additional products," he said.
One product they're looking at is something that can help a person who loses employer provided coverage and doesn't qualify for Medicaid.
"Maybe they're caught in the middle," he said. "They're not employed or they're self-employed, so we need to have products individuals can buy that fill these gaps.
For all its size, BCBS companies faced their own pandemic-related financial challenges. On one side, many employers were going out of business, leaving employees without affordable insurance, so they were being asked to be flexible on premiums, and on the other side, hospitals and doctors' offices were seeing a drop in traffic as people stayed home to avoid COVID.
"We were getting squeezed on both ends," he said, requiring our finance team to intensity its cash management.
"The liquidity concern was one we looked at very carefully," he said. "The companies are not generally publicly traded, so that's not something to deal with." Nevertheless, he said, we still have to "manage expectations going forward amid this change and uncertainty."