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$6B Magellan Health’s CIO And CTO Drives A Humanized Digital Experience

5/7/18
By Peter High, published on Forbes

Prior to joining $6 billion revenue Magellan Health as Chief Information Officer and Chief Technology Officer two and a half years ago, Srini Koushik was a consultant with IBM, a CIO and CTO at Nationwide Insurance, a general manager of a business at Hewlett Packard, and an entrepreneur, having founded NTT Innovation Institute. This diverse array of experienced gave him a deeper understanding of the value he could drive as a CIO and CTO of Magellan Health.

That said, the nature of the role of CIO and CTO changed significantly in the five years since he last held the titles. Moreover, this was his first foray into healthcare. Since then, he has seen the profound impact that technology can have in impacting customer experience on both sides of Magellan’s business: healthcare and pharmacy benefit management. Moreover, by adopting a cloud-first approach, he could more easily help the company continue to scale up. He does this all in the service of driving what he refers to as the company’s Massive Transformative Purpose.

Peter High: You are the Executive Vice President and Chief Information Officer and Chief Technology Officer of Magellan Health. Could you give an overview of Magellan Health’s business, as well as your purview?

Srini Koushik: We are a Scottsdale, Arizona-based company. However, we cover all 50 states, and we have counselors in seven or eight different countries across the globe. Magellan Health is in this business because we have a desire to help lead humanity to healthy, vibrant lives. Within Magellan, we call it our Massive Transformative Purpose [MTP]. This mission motivates us to do what we do.

When we talk about leading humanity to healthy, vibrant lives, we focus on the population that needs it the most. These are people with behavioral health and mental health conditions. These are folks that have been diagnosed across the entire spectrum of mental and behavioral health, from depression, anxiety, and addiction all the way to paranoia, schizophrenia, or PTSD.

We say people need it the most primarily because we are in 2018 and mental health issues still have a stigma associated with them. You tend to see these patients not for the primary diagnosis such as depression, but in a high-cost channel on the other end. It is as if they show up at the emergency room for a secondary condition, but that could have been avoided if you treated the primary condition.

While costs are important, we try to look at things from a member outcome standpoint. That is where we start and work from. That is how this company has had a history of 40 years of expertise in the behavioral health space. In the last two or three years, we have evolved that to a point where we are not only dealing with the behavioral health aspects of it but the total health of that individual.

Magellan Health has two big platforms for growth. One is the healthcare and the other one is in pharmacy benefits management (PBM). On the healthcare side, we have turned the tables. The traditional model for behavioral health has been that you have your healthcare provided by a certain provider. They carve out the behavioral health piece, and they allow companies like Magellan to do the utilization management and care management components of it. Magellan Complete Care, which we introduced in Florida a couple of years ago, turns the tables. This takes the individual and manages their entire health. Not just behavioral health or physical health, but other conditions as well. We introduced the nation’s first benefit plan aimed at the seriously mentally ill in Florida. When people ask me, I say, “We are actually a startup. We are 40 years old, but we are also a three-year-old startup,” because that was a first-of-its-kind plan. That was one where we entered into the market because it was absolutely the right thing to do and fit with our Massive Transformative Purpose.

You must work through that because the population we are talking about accounts for about 5 percent of the population, but about 40 to 45 percent of the costs in the system are driven by this population. As you can imagine, if you took the traditional cost view of it, this would be the last piece you would want to touch. However, we thought there was a different way for us to be able to address it. Magellan Healthcare has pivoted and started to focus on the population that needs the help the most.

Our second platform is the pharmacy benefits management platform. Our competitors are much larger, but our differentiation and our approach has been key. There are two primary drivers that drive our pharmacy benefits management business. One is the growth in the number of specialty medications. The FDA approved more than 60 specialty medications last year. The difference in specialty medications is that they are not broad-spectrum drugs that apply to a large segment of the population. These are drugs such as Harvoni, the hep C treatment. A regimen of Harvoni is about $80,000. It is a much smaller population that needs it, and it is a much more expensive treatment. We have the ability to manage the care for this specialty medication with a strict regimen. If you missed the regimen, you must go back and start the regimen again. By providing those capabilities to manage specialty drugs, we have been able to grow along with that trend.

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