Dan Loepp: Transformational Leadership from a True Change Agent
Gregory A. Sudderth
| 5 min read
Gregory A. Sudderth is chairman of the board at Blue Cross Blue Shield of Michigan.
Over 20 years ago, the authors of the book, “Change or Die,” argued convincingly that for businesses to succeed, they must constantly evolve. Moreover, that the most effective change comes from within, and the most effective “change agents” are internal leaders who possess the vision and fortitude to challenge the status quo.
Today, Blue Cross Blue Shield of Michigan is a completely different company than when “Change or Die” arrived in bookstores in 2000. We are better prepared to serve our members and succeed into the future – because our leading “change agent” has had the title of CEO for over a decade.
Blue Cross Blue Shield of Michigan turns 82 this year, but thanks to Dan Loepp, we are brand new. During his tenure, Dan has led a transformation of BCBSM from a single-state health insurance company to a national, diversified business enterprise serving people in all 50 states and operating an array of companies that provide workers’ compensation, Medicare and Medicaid coverage, accident and critical illness insurance, as well as business process services for other health plans and providers serving the growing Medicare market.
Inside BCBSM itself, Dan has transformed the business in profound and meaningful ways. His championing of diversity and inclusion practices completely transformed the workplace culture and resulted in multiple awards from national diversity organizations. His passion for BCBSM employees to work in Michigan’s urban centers led to the unification of 6,000 employees in downtown Detroit and served as a catalyst for other companies’ moves into Detroit.
Transformational leadership requires vision and the willingness to take calculated risks. Seven years before the Affordable Care Act, Dan Loepp created the company’s Individual Business Unit to upgrade our long-offered guarantee-issue health plans for people not covered at work. This prepared BCBSM to succeed when the ACA Marketplace came into being and all other insurers were finally required to accept people with pre-existing conditions. BCBSM is the only insurer that has consistently offered individual plans in every Michigan county during the ACA period.
Never one to settle for “the way it’s always been done,” Dan challenged the way BCBSM runs its business – and initiated two major transformations of the organization designed to streamline business processes, embrace lean principles and lower administrative costs. The most recent of these realized $360 million in value. BCBSM’s administrative costs in 2018 were virtually the same as 2016 – even though our enterprise revenue had grown by more than $3 billion. Dan saw the emergence of consumerism early on and transformed BCBSM’s approach to customer experience – building the company’s Customer Experience and Digital Experience disciplines from the ground up and creating a customer-centric culture that has resulted in an improved member experience, dynamic online capabilities and numerous awards.
Most critically, Dan had the vision and courage to champion the evolution of BCBSM’s corporate structure into a nonprofit mutual insurance company in 2013. He argued successfully that BCBSM needed regulatory reform from the State of Michigan to serve the people of Michigan in the ACA market and beyond. That reform and the transition to a nonprofit mutual has enabled BCBSM to diversify and grow – while continuing and expanding our 81-year heritage of giving back to Michigan as a nonprofit enterprise. In 2013, our enterprise revenue totaled $21 billion. Today, it’s grown to nearly $30 billion.
This growth benefits Michigan in numerous ways – including the $1.56 billion that BCBSM has committed to the Michigan Health Endowment Fund to protect vulnerable Michigan residents and improve health. Dan Loepp was also instrumental in one of BCBSM’s most recent investments in the city of Detroit. In 2019, he announced BCBSM’s partnership with Detroit to support the East Warren/Cadieux communities through the Strategic Neighborhood Fund and Affordable Housing Leverage Fund with a $5 million investment that will be disbursed through 2022. This community improvement project is close to Dan Loepp, as he grew up in that local community.
The diversification of our business is important – and today, Dan Loepp is more than the CEO of a health insurance company. He leads business entities like Lansing-based AF Group, one of the nation’s leading workers’ compensation companies, operating in all 50 states and delivering hundreds of millions in profit to support BCBSM’s bottom line. Blue Cross doesn’t take this money from its health insurance customers – and this keeps health insurance more affordable than it otherwise would be. That commitment to the affordability of health care continues year after year.
In 2019, under Dan Loepp’s leadership, BCBSM launched Blueprint for Affordability. Together with seven major Michigan health organizations representing roughly 30% of our total Commercial PPO and Medicare Advantage market, BCBSM created a transformative new payment relationship through which accountability for cost, quality, efficiency and patient outcomes are shared by all. This innovative, financial risk contracting structure of Blueprint for Affordability will ensure the highest quality patient care, while holding the line of rising health care costs. In this complex and challenging time, with so much change affecting people’s health care, we are indeed fortunate to have a steady hand at the helm of our business.
Dan Loepp’s transformational leadership over the years has prepared BCBSM to diversify nationally, which helps stabilize health premiums in Michigan. The company is prepared to succeed into the future – a future of constant change that our “change agent” at the top prepares us to confront with momentum and optimism.
About the author: Gregory A. Sudderth is chairman of the board, BCBSM
