Alaska: Interview with Jason Gootee of ODS

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Jason Gootee is the most senior executive for the ODS Health Plan in Alaska.  He joined us for an interview to talk through how ODS is approaching the coming exchange marketplace, and what ODS has learned since opening its office in Alaska in 2004.  The second part of this two part interview will be available tomorrow.

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DJ:  Jason, thanks for making time, and letting me pick your brain a little bit.  First, how long have you been in Alaska?

Jason:  I’ve been in Alaska since the year 2000, so working on 13 years, and ODS has been in Alaska since 2004.

DJ:  So you’ve been here well before ODS.

J:  Yeah, I went to college at the University of Alaska at Fairbanks, so I drove up the highway in August of the year 2000 and never left.

DJ:  A lot of plans have looked at entering the Alaska marketplace.  ODS has been successful in Alaska since 2004, where some others haven’t in terms of sticking around.  Tell me about the ODS approach to the Alaska market.

J:  First and foremost, it started with opening an office here and having boots on the ground with people who have had success developing relationships with brokers.  If you look at the market, Premera has been here for what seems like forever, and there have been a host of other carriers who have approached this marketplace.  But if you look down the line, almost all of those carriers did not make the investment that we have made in this marketplace by opening an office here.  They tried to do it out of Seattle, Chicago or somewhere else.  Now, it’s not to say that you can’t be successful with that approach but one thing I’ve figured out is that Alaskans really do want to work with people in Alaska.  It’s part of the culture here.

I think brokers appreciate that we took the plunge and opened an office, even though we only had one employee back in 2004.  But, I think a lot of the broker community recognizes that commitment, and I think a lot of clients recognize that as well.

DJ:  What are the things you thought you knew about the Alaska marketplace, but which you had to learn over the course of time since 2004.

J:  When we first opened in 2004, we only sold dental plans through Delta Dental.  That was a strategic move on our part for two reasons.

First, quite frankly, selling dental is more straightforward than selling medical.  So it gave us time to establish relationships and feel out the market.

The second thing is that it gave us more time to evaluate the medical side of this market.  So that when we launched in 2006 we were ready to go.

Now there was a little bit of a learning curve for us because it was the first state we had expanded medical coverage into outside of Oregon.

So, it took a little bit of time to learn what works in this market, and what doesn’t work.

I’ll give you a perfect example.  Chiropractic claims are through the roof here in Alaska compared to Washington and Oregon, and I think that’s because Alaskans are a relatively active populations and they tend throw their back out of whack a little more.

DJ:  You mentioned starting first as a dental plan, but I know ODS has expanded well beyond that initial focus.

J:  Company-wide, we have our hands into things in a number of different places.  ODS as a company was founded in 1955 as a dental insurance carrier, and one of the founding members of what turned into Delta Dental nationwide.  So, that’s how we got our start.

We branched into the world of medical insurance in Oregon back in the 1980’s.  We were actually approached by one of our existing large government clients who asked us to start processing their medical claims, and that’s how we got our start in medical in the first place.

We also have two property and casualty companies under our belt which insure dentists throughout a number of states, including Alaska.

We have a company that specializes in software design for dental offices.  So we compete with some of the larger practice software firms in that arena, and we do business on the software side in several states.

ODS has a small finance company, which is still in its infancy, but which is looking to provide patient credit for dental offices.  So that’s a piece of our diversification strategy.

BenefitHelp Solutions is a subsidiary of ours, and provides FSA, HSA and other services to clients all over the northwest.

Payless, a long term care pharmacy, we actually just purchased them in 2012.  That was interesting for us because it branched us into the retail world, which we’ve not been engaged in before.  We viewed it as an interesting opportunity to explore diversification outside of insurance.

And last but not least, we have our pharmacy management program, under the name ODS, which covers over a million lives in Alaska and the Pacific Northwest.

DJ:  How much is the diversification strategy catalyzed by the Affordable Care Act?

J:  You know, not a whole lot.  We’ve had some of these companies since the 1980’s and 1990’s.  So they’ve been around long before the ACA was around.  But, to answer your question more directly, I don’t think the ACA has a huge effect on that for us simply because medical insurance is always going to be what pays the bills in our company.

Medical insurance has always been the biggest generator of revenue for us.  We view the smaller companies as a way both to provide our clients with some extra services and then especially in the case of the dental PnC companies, remember we were founded as a dental company so we continue to have a connection with the Oregon dental community on our board of directors, we’ve always tried to be a top level service provider to the dental community.

We’ve tried our best to view the Affordable Care Act as an opportunity in a changing health care world.  We’re trying to make the most of it – we’re not trying to bemoan it at all.  We’ll continue to be competitive and take care of the people that we serve.

DJ:  I understand ODS will be changing its name in just a few weeks.  Tell us about that.

J:  Yeah, Moda Health.  That will go live May 6th.  It’s actually translated from the Latin of ‘modus,’ which means ‘the way’.  So it’s a key part to our strategy that we will work to show our clients the way, and I think you’ll see that in our branding and materials after May 6th.

We have a landing page that’s already up at www.modahealth.com, which like I say, will be the place we launch on May 6th.

DJ:  Tell me about your approach to the new exchange environment.  Was the name change part of that strategy?

 J:  The name change has been discussed for quite some time, especially when we came into the Alaska market, it started getting traction in the company that we might want to change the name.  But a big catalyst for the name change was when we entered the Washington market.  As you know, there is a significant Oregon-Washington rivalry.  And trying to do business in Washington with the name Oregon Dental Service when we have such a wide range of products was starting to hinder us a little bit.

Now in the exchange environment, one of the things I think the exchange is going to do is move us to an online environment more than we have before.

And in an online environment, the companies that have the best online branding strategies and have the best logos tend to do well.  Now that’s only part of it.  You still have to have good plan design and great customer service, and we’ll continue to do well in that regard.

But, I think having the Moda name and the Moda logo is going to do well for us in the future.

The other thing that Moda will do is make it a lot easier for us as we expand into to other states in the future.

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The interview will be continued tomorrow in part 2 of the series.