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    The expanding role of managed care organization COO


    In the managed care and health insurance arena, it has become more common for a chief operating officer (COO) to slide into a vacant chief executive officer (CEO) role. J.D. Hickey recently made that move for BlueCross BlueShield of Tennessee, as he capitalized on previous experience as a CEO and as a McKinsey consultant. Kenneth Burdick also made this transition for WellCare Health Plans—he, too, is a former CEO, most recently at Blue Cross and Blue Shield of Minnesota.

    PadillaPart of what is happening is that the insurance or managed care COO role has expanded greatly in recent years, with responsibilities becoming more strategic and aligned with those of the CEO. As with Hickey and Burdick, executives often transition back and forth between the two roles within different organizations. The traditional perception of the COO role, across industries, is that it is there to free up the CEO to do more visionary, creative work. The COO takes care of internal business so that the CEO can look externally.

    Yet what we see among health insurers is that COOs are being used in varied and creative ways. There isn’t quite the clear separation of the two positions as in the past, and COOs are now being valued for their ability to take on responsibilities well outside traditional operations. Some organizations are just hiring their first COOs, building in responsibilities that fit their present needs rather than borrowing any template for what this executive is supposed to do.

    Profiling today’s COO

    KratzIn preparation for this article, we reviewed leadership profiles written for recent recruitments of COOs within health plan and managed care organizations. It is interesting to note the shift in language and word selection for these position descriptions in the past few years. In addition to statements oriented towards traditional COO responsibilities—e.g., operational oversight (enrollment, claims, IT, HR, etc.), staff supervision, process and performance improvement, provider contracting, budget management, and basic business development—COO descriptions require this next-generation executive to do plenty of CEO-like tasks:

    • Partner with the CEO to drive strategy and results;

    • Embrace the strategic issues of the organization;

    • Challenge the status quo and bring in fresh ideas;

    • Seek out strategic partners for quick entry into new business products;

    • Align marketing and sales goals;

    • Implement creative customer service strategies;

    • Be a highly visible spokesperson in the community;

    • Integrate organizational mission and values into management practices; and

    • Show an ability to lead in a diverse environment.

    The elements above suggest that the COO role, as constructed now, is becoming much more visible, vocal, and proactive in health insurance organizations. It is definitely a role with more sales, marketing, product development, and partner/client interaction woven in.

    Next: The DNA of the COO



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