Guppy Swallows Whale Awash With TRICARE Bucks

...and it is one hell of a big whale Vern at almost $60 billion annually. Yes, the guppy was busy. Here's how it went down:

In the late 70's, concerns about the rising cost of health care cause the nations doc's to offer "Voluntary Cost Containment" out of fear Congress will come up with something worse. It doesn't work. Public and congressional attention is then drawn toward prepaid health plans AKA managed care organizations such as Kaiser Permanente. Managed care is based on the old adage that there is strength in numbers; that bargaining power to control costs becomes stronger when large numbers of consumers, the "population at risk," represent the chips in play. 

1. 
   One of nation's first Health Maintenance Organizations is formed shortly after the HMO Act of 1973 is passed. Dr. Jim Schubert, Sacramento Orthopedist, controversial in championing HMO's, is a founder of the Sacramento Medical Care Foundation, later forming the health plan; "Foundation Health lan." Foundation will be the first licensed health plan in California.
2. 1984 - Foundation is so successful it goes public on as "Americare Health Care Corporation."
3. 1986 - Merrill Lynch leads a leveraged buy out "Foundation Health Plan" reemerges.
4. Early to mid 80's - Foundation, attempting to replicate Sacramento area formula for success, acquires struggling local health plans in Seattle and Portland.
5. Mid 80's - Captain Bob Bunker, USAF, MSC, is helping launch the Air Force Medical Service' first Office of Innovation.  He decides to approach (via cold calls) managed care organizations to gauge interest in a form of managed care to supplement direct military health care. He catches the attention of Foundation executives who he and others later brief on an upcoming Department of Defense Office of Health Affairs initiative called the CHAMPUS Reform Initiative. "CRI" when launched is to be a demonstration project that, if successful will be adopted nationally and overseas. The Title would later be changed to Tricare. 
6. Mid-80's - CRI pre-contract process begins.  Interest of nation's HMO's declines rapidly as significant financial risk becomes apparent.
7. Foundation and DOD staff begin considering "risk-sharing corridor" where both share in potential profit and losses from contract operations.
8. 1987 - Foundation begins experiencing financial difficulties as their ability to manage health plans in Washington, Oregon and New Jersey fails. To raise needed cash, Foundation considers selling their large health care claims building (a former Safeway) for approximately $1 million. However doing so will drop their Tangible Net Equity below the $5 million the State requires to maintain health plan licensure.
9. Late 1988: Foundation, the sole bidder, is awarded the nation's first CRI contract and begins implementation activities. At that time, it is the largest health plan ever awarded.(No other health plans would bid because of ambiguities in the associated financial risk.) 

• Schubert is the champion of the initiative and is continued as Chairman and Chief Medical Officer of the company.  

• 

  Commemorative copy -
  original contract award

  Subsequent Foundation hiring includes MSCs and officers from several service branches; first is recently retired AF Major Tom Campbell, an MSC who had been hired by Foundation earlier at the recommendation of Captain Bunker.  
• Campbell assumes role as COO for Northern California operations serving nearly 400,000 beneficiaries. Campbell then recruits Paul Murrell, MSC Lt. Colonel and Chuck Upton, MSC Colonel who would assume Foundation corporate roles. For Northern California operations, Campbell also hires recent MSC retirees including Navy Commander Bob Legg, Army Lt. Colonel Mike Sexton, Army Colonel Jim Schlaak and Army Colonel Ed Bland as directors. Air Force Colonel and former pilot Ernie Givani also signs on as a director.    
• The health plan also begins exploring the sale of their two out-of-state HMO's.

1. 1988-'89: 
• CRI begins. All operations are largely successful with the exception of claims processing. Foundation had contracted with an external party for a claims system known as "Eagle."  It didn't work. Schubert, in attempting to defend the system causes significant government concerns and is asked to resign.  
• Foundation's CRI contract operations are favorably reviewed by external contractor, the Rand Corporation.
• The continuing influx of government contract cash saves Foundation.
2. 1989:  Foundation, unwilling or unable to manage its remote plans, sells Oregon and Washington HMOs to Dr. Malik Hassan, founder of a small successful Pueblo Colorado HMO; Qual-Med.

   

   CRI /TRICARE enrollee #2
   (Dr. Schubert was #1)
   Yes, they were still figuring out
   how to properly laminate things.

3. 1989-1990 - RAND Corporation evaluates CRI - operations receive excellent ratings overall with exception of struggling claims system.
4. 1993: Qual-Med merges with Health Net to form Health Systems International.
5. 1997: Health Systems International merges with Foundation Health to form Health Net. The 'Guppy' that Foundation sold its struggling HMOs to a few years earlier swallows the 'Whale.'  Health Net CEO is Dr. Malik Hassan who originally formed the 7,000 member 'Guppy' HMO in Pueblo.
6. 2016: Centene merges with Health Net.
7. 2017: Centene signals intent to establish regional Headquarters in Sacramento...in full circle to where this story began. 

So there you have it.  At least you have my version of it. The old "Foundation Health" morphs to "Centene", largely on the backbone of TRICARE.

(All during this period, from the early 70's, there is background noise about a single-payer system. Although based on general population health and economic logic, each time it rises it is defeated by insurers...and money. In the past few years though, the idea, primarily tagged as "Medicare for all" has continued to gain ground among a few politicians and the general population. More on this HERE)

The Last Resume'

RESUME (THE LAST)

TOM CAMPBELL, MHA

OBJECTIVE: A good cup of coffee in the morning, a fine glass of red at night - poker, reading, writing (no 'rithmetic please)... Julieann Marie always by my side.

PROFESSIONAL EXPERIENCE:

Campbell Health Management, Inc., Sacramento, California, 1998 – 2017. 

Its been a great ride thanks to the help of
a lot of wonderful people especially
Julieann Marie Campbell

Founder/Principal – Talk about boom and bust!  "It was the best of times; it was the worst of times." - Thank you Mr. Dickens - 

Man, there were some damn lean years and then again… along the way I met some really great people, some world class jerks too.  I even got canned from a couple of jobs because I couldn't figure what in the hell my clients wanted from me (probably my fault).  I will tell you this; there are people out there who naturally hate consultants.  For those, all I did was borrow their watches so I could tell them what the hell time it was.  Along the way, I spent almost four years of my life sleeping in Marriott's and got to make some life long friends among many clients and other consultants.

Chairman and Board Director – River Oak Center for Children, 1997-2009.  I had a great time with a lot of people who were doing their best to provide decent mental health services for kids.  It sucked to be constantly searching for handouts so we could provide services but we got it done and grew nicely.

Schubert Associates, Inc., Sacramento, California, 1991 - 1998

President and Chief Operating Officer – Working with Doctor Jim Schubert (RIP) was a seriously great adventure.  He originally hired me for $0 dollars.  That’s right - zero.  The company was brand new and that is where we were financially.  Schubert suffered from the lack of patience you might expect from a former practicing orthopedic surgeon but he loved innovation.  In fact, he was the brains behind one of the nation’s first handful of HMOs shortly after the Act was passed in 1972. He was also one of a couple of pivotal figures in the nation's first TRICARE contract for military families.  Our biggest engagement brought in over $2.5 million in six months after I presented our TRICARE consultant case to representatives from US Healthcare and Unisys courtesy of Big John Hammack – the world’s most accomplished drive-through VP.  After seven years, in a fit of wanton hubris, I left our company and started my own but the good Doc and I remained friends.

Consultant, Sacramento California, 1990 - 1991

This was a damn ugly time.  I bought a business with a partner who turned out to be bi-polar or something and ended up selling out to him after he didn't turn up at the office for over three months.  I also worked for a pitiful little headhunter firm for a little while but my heart was never in it.  I left after recruiting a nurse practitioner and getting stiffed for payment by the company owner.  They were world class shysters.  I worked with the former CEO of Foundation Health  for a while too, trying to drum up some consulting business. I had no idea what I was doing and was a total failure. In the end so was he but he had millions to fall back on. This is all because I really wanted to stay in Sacramento and raise our kids and as it turned out, my wife ended up doing just that (raising our kids I mean) not me.  I just went on the consultant road and regretfully became a part-time dad.

Yours truly in 
consultant mufti.

Foundation Health, Sacramento, California, 1987 - 1990

Chief Operating Officer – This turned out to be almost the greatest and in the end, the most traumatic experience of my working life.  We won the first TRICARE contract, I hired over 120 people to cover Northern California operations supporting almost 400,000 military families and we began a triple option health care plan (HMO, PPO, FFS)…all in six months.  There was a devastating failure in our claims system (outside my responsibility thank God) that caused a lot of good people to run over each other and ended with the firing of the Board Chairman and Corporate Medical Director, Dr. Jim Schubert (yes, the same Schubert mentioned earlier).  

Rand Corporation did an independent study though and loved the work my gang was doing.  A year and a half later we had a new CEO who arbitrarily integrated the commercial side of the company with the government side and eliminated most of the 120 great people I had hired. I was shoved to the side with a job that had no description to speak of.  After considering all the great work my folks had done, and the fact that they were being tossed aside I said, “f___ it” and left. 

This was my transition from the military health system with quality patient care as a primary focus to a civilian for-profit system with the bottom line as the sole focus. In the HMO world, big bucks superseded quality patient care and customer service.  It was not about patients.  It was about widgets, it was abrupt and I was totally unprepared for it.  I still have open wounds to this day. 

Air Force Medical Service Headquarters, 1984 - 1987

Corporate Director - Managed career development and placement for over 1,240 health care administrators in corporate, hospital and clinic positions.  What a great job this was.  My boss, Paul Murrell and I had the structure and support we needed to do the best we could to fulfill the mission and advance the careers of everyone.  Of the 1200+ pencil pushers (like us) we supported, 1,000 or so were on their way up and around 100 were burned out or assholes or both and on their way down. We managed them all and spread them among assignments pretty damn good.  The sum of it all turned out to be the best job I ever had.

Air Force Hospital, Great Falls, Montana, 1980 - 1983

Administrator and CEO – I loved the work.  I was really into “management by walking around” and would get up from my desk, head for the wards, peek into patient rooms and ask them how lunch was.  I loved everyone working in the hospital and they knew it.  Sure, the daily administrative tasks demanded long hours but I made up for that, typically on Saturday mornings.  I would wake up at dawn, fill a thermos with coffee, grab a couple of pbjs and head for a special spot near Helena, Montana. There, I would soak a nightcrawler and, using ultra-light tackle, plunk for trout on the Missouri river. It was at once beautiful and peaceful.    

That job got me promoted to Major three years below the primary zone – the biggest bonus (and shock) I  had in my 50+ years of being a working stiff. (Sure there was a ton of luck involved but you gotta be in the game to get lucky right?!)  My biggest career regret?...taking a job at an HMO instead of a hospital when I left the Air Force.  Years later a former Corps Chief, General Pete Bellisario would ask why I left.  I could only answer that my wife and I likely would have been very happy to stay, it was just that I was in the Air Force from the ages of 17 to 41 and, out of curiosity, wanted to start a new life to see what it was about.  As it turned out, the "new life", daughter Samantha Marie Campbell was born about a year later.  Guess I got confused about the objective there.  

EDUCATION:

MHA, Health Care Administration - Medical College of Virginia, Richmond, Virginia, 1979. 

MCV was a true ball buster. The program is currently ranked third in the nation (How'd they pull that off?!)  I worked like a dog to get through and was never so worried that I might fail at something. Yes, I had imposter syndrome big time. Julieann paid an even greater price trying to get me through it all. (For more on this see, "Grad School Kicked His Ass") 

BA, Cum Laude, Economics - Chapman College, Orange, California, 1973. This was a 3.5 year whirlwind of CLEP testing, night school and an Air Force sponsored Bootstrap program. Julieann did absolutely everything for us while I focussed on my Air Force day job and the degree.

Faculty - Adjunct professor; Chapman College healthcare administration graduate program: Teaching…I loved it. For new classes, it took me an average 3 hours prep time to teach one hour of class time and I have no doubt I learned a lot more than my students.  Preceptor; Air Force Education with Industry in management of health maintenance organizations.  The only “student” I had was Don "Aught" Palen.  The job rightfully moved from me to the CEO after a short while which was good since I was fresh in the HMO business and had no idea what the hell I was doing anyway.

BOARDS:

Chairman - River Oak Center for Children: Past Chairman and Member, Board of Directors 1997-2009; Chair, Strategic Planning and Personnel Committees, 1997-1999, 2001-2009. Arden Little League: Member, Board of Directors, 1991-1994

THE END (?)

Hell no this is not the end.
And references are NOT available so forget it. On the other hand, you could check with my bride, Julieann who has always made me look good, even when I was very bad. Now, it’s the beginning of a new adventure, another chapter for a memoir.

I’d write more but I have already exceeded the recommended two page (Forgiveness not requested) resume limit.  Besides, I am tired and still need to trim the palm trees in Molly’s Grotto at the famous Campbell Family Nor-Cal Ranch.