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The Keckley Report

Reputations at Risk

By September 21, 2015March 1st, 2023No Comments

The following is an excerpt from Navigant Healthcare’s Pulse Weekly. Click here for a complete copy of this week’s article. 

As the CEOs of Anthem and Aetna go before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights tomorrow, there’s more at stake than approvals for their mega-deals.(1) Their corporate reputations are at stake, as are many in healthcare these days.

Up to 25% of a public company’s market value is dependent on its reputation.(2) As federal officials consider the advisability of these deals, their shareholders will be listening for roadblocks to these proposed deals. The employees in the four companies impacted will listen for signals about whether their jobs are at risk (so called “synergies”), and their customers—employers, individuals, Medicare, Medicaid– might be listening for changes in their offerings. The same can be said in virtually every sector of healthcare: our reputations are at risk.

Less than 40% of the public has confidence in our health system, trailing public confidence in the military, police, small businesses and organized religion.(3) Loss of public trust and confidence is not about brands: they’re controlled inside our organizations by our vastly capable PR and marketing engines. By contrast, our reputations are controlled by what people inside and outside our organizations think as they observe how these organizations operate. Reputations are what people believe to be true, whether accurate or not. More than brands, reputation matters.

Branding efforts in our industry garner lots of attention and understandably so. Brands matter. Google is counting on its brand to go head-to-head against United, Anthem and Aetna in the health insurance market via Google Capital’s acquisition of Oscar Health Insurance. It’s also leveraging its brand in the life sciences (aka Google Life Sciences) having recruited former NIMH leader, Tom Insell to create partnerships like its Novartis tear-drop analytics. GE is branding itself as a digital company alongside its medical diagnostics businesses, and Microsoft is branding its cloud-based solutions as key to advanced genetic sequencing to detect troublesome cancers. The brands Mayo, Cleveland Clinic, Kaiser, Geisinger and Intermountain figured prominently during the debate about health reform in 2009-2010, and high profile re-branding campaigns by organizations like Northshore-Long Island Jewish Health System’s NorthWell Health and others are in the news daily. The value of the Blue Cross brand is front and center as regulators and policymakers consider the future of health insurance and consolidation among the investor-owned plans. And professional services firms—accountants, lawyers, consultants, architects and others—make huge investments in their brands, carefully distancing themselves from their competition through carefully worded tag lines, color schemes and logos.

But huge investments in highly-regarded brands can be worthless if an organization’s reputation is tarnished, or key constituents don’t believe the reality about the company matches its branding campaign. Reputations are earned based on relationships and performance. They’re fragile. They’re built over years and sometimes destroyed overnight. They depend on relationships… with current employees and former employees, with customers, suppliers and competitors. And relationships in the communities where its employees live and work impacts reputations mightily.

An organization’s reputation depends on its performance—not just shareholder returns and the P&L. Where profits are invested, how leaders behave, and the authenticity of a corporate culture impact reputations.

In coming weeks and months, reputations in healthcare will be at risk. Not just the big drug companies facing pressure about their pricing or big insurers about their premium increases and the motives for their consolidation. They’re at risk in our communities where our promises to deliver high-quality care are contrasted to public data showing otherwise, and where we overpromise efficiency and cost effectiveness and under-deliver. They’re at risk in our organizations as leaders are chosen and others depart, and as partnerships and collaborations form and then under-perform when cultures collide. They’re at risk in chat rooms and social media, where stories are shared that companies prefer be kept secret.

My dad was an opera singer. He was a humble man, more prone to self-criticism than criticism of others. He scolded his sons to avoid arrogance at all costs, and he cautioned about those in his trade prone to “believe their own publicity”.

In healthcare, we’re prone to believe our own publicity. Thus, more than 800 hospitals tout their “Top 100”. Physicians buy full-page ads in airline magazines to promote themselves as one of “the best doctors in America”, and corporate spin doctors get paid handsomely to get favorable coverage for their clients. That’s why credible independent report cards matter so much—like NCQA’s assessments of Health Plan performance, CMS Hospital Compare, Leapfrog Group and others.

Whether testifying before a Congressional panel, reporting results to shareholders or providing services to patients, brands matter, but arguably, reputations matter more. They’re built over time based on relationships and performance. And they can be destroyed overnight.

The most valuable hire and toughest jobs in our organizations might be our chief reputation officers. They are responsible for objectively measuring and monitoring the organization’s reputation—how we’re perceived, what differentiates us from others, what key stakeholders inside and outside our organization believe and say, whether true or not.

Healthcare organizations—whether national or local—can’t afford to believe our own publicity nor depend solely on our branding efforts to build confidence and trust. Our performance must be verified by facts and our relationships built on good will and fairness.

It’s reputations that matter, and in healthcare, they’re at risk.



1-4“Examining Consolidation in the Health Insurance Industry and its Impact on Consumers” Subcommittee on Antitrust, Competition Policy and Consumer Rights Tuesday, September 22, 2015: 10:00 AM Location: Dirksen 226 Presiding: Chairman Lee: Anthem is proposing to acquire Cigna in a $54.2 billion deal, and Aetna is proposing to buy Humana in a $37 billion deal. Combined with United Health Group, the three will enroll 132.5 million in the U.S, or 44% of total U.S. enrollment.

2-Deloitte 2014 Study on Reputation at Risk, October 28, 2014

3-“Gallup Confidence in Institutions” Annual Survey: The Gallup organization has rated the public’s trust in its institutions since 1973. In its June, 2015 report, it reported the “medical system” had “great support” among 17% and “quite a lot” among 20%–ranking it 5th on the list behind the military (42%/30%), small business (34%/33%), the police (25%/27%), and organized religion (25%/17%) and far better than the bottom five: Congress (4%/4%), big business (9%/12%), television news (10%/11%), the criminal justice system (9%/14%) and newspapers (10%/14%). The medical system’s highest ratings were in 1975 (44%/36%) and 1976(39%/35%) but since 1993, it has lingered in the same zone as the most recent poll with approximately 40% confidence

4-NCQA: Last week, NCQA announced it will change its rating system for health plans to align them better with the Five-Star rating methodology used by CMS for Medicare Advantage Plans. Traditionally, NCQA rated more than 1,000 health plans across three lines of service: commercial, Medicare and Medicaid based on member satisfaction, prevention and treatment. Clinical outcomes and measures—such as whether kids got immunizations or whether the blood sugar of diabetic adults was properly managed—were given more weight. NCQA also weighted 9% of the rating on whether the plan was accredited by the organization. The CMS’ star system for Medicare Advantage plans differs from the NCQA’s ratings in one major area: financial incentives. Advantage plans that attain at least four stars receive bonus payments. The rest get nothing extra. Plans that have fewer than three stars for three consecutive years could get kicked out of the Medicare program.

Not-for-profit plans often performed the best across all three categories, especially those located in New England and in Midwestern states near the Great Lakes, according to the NCQA’s data released this week. Kaiser Permanente, Capital District Physicians’ Health Plan, Harvard Pilgrim Health Care, Tufts Health Plan and UPMC Health Plan all received a five-point rating multiple times. By contrast, many investor-owned insurers had low-rated plans, including Cigna Corp. and WellCare Health Plans. A vast majority of companies were in the middle of the pack with ratings of three or 3.5. Cigna has 18 commercial plans with a rating of two or lower in the NCQA’s ratings for this year and 15 commercial plans with a rating of four or higher.

NCQA Releases Health Insurance Plan Ratings,” September 17, 2015

The opinions expressed in this article are those of the author and do not necessarily represent the views of Navigant Consulting, Inc. The information contained in this article is a summary and reflects current impressions based on industry data and news available at the time of publication. Any predictions and expectations noted herein are inherently uncertain and actual results may differ materially from those contained in this article. Navigant undertakes no obligation to update any of the information contained in the article.

©2015 Navigant Consulting, Inc.