Daniel J. Hilferty wants to make sure Independence Blue Cross is prepared for health care reform with full coverage Featured

3:59pm EDT September 29, 2013
Daniel J. Hilferty, president and CEO, Independence Blue Cross Daniel J. Hilferty, president and CEO, Independence Blue Cross

It became so quiet, so fast, that you could have heard a pin drop in the conference room at Independence Blue Cross.

Daniel J. Hilferty had been talking to his team about health care reform and the ways it could impact the 7,472-employee health insurance provider in the near future.

“So I’m in the middle of giving my point, and I’m being forceful,” says Hilferty, the company’s president and CEO. “And Paul Tufano, our chief counsel says, ‘Dan, I disagree, and this is why.’ The whole room went silent. He articulated a point of view that when he was finished, I came to realize that my position was flawed, and he was right. I admitted it in front of the group, and we went with his position.”

After the meeting, Tufano approached Hilferty, unsure what his leader’s response would be to his words of disagreement during the meeting.

“As we’re walking out of the room, he says to me, ‘Are you OK with that?’” Hilferty says. “I said, ‘OK with it? I wanted to hug you. This is what we’re trying to build.’”

Hilferty was excited that his team was showing it wanted to help Independence Blue Cross prepare employees and customers for the changes coming to health care as part of the Affordable Care Act.

“We have a strategic goal of being recognized by 2016 as the best performing Blue and a magnet to partner with other Blues in all sorts of business,” Hilferty says. “The challenge is to put a strategy in place that our board of directors and our senior management can get excited about and rally behind.”

This wasn’t about politics for Hilferty. He simply wanted his people to be ready to respond to whatever changes were enacted. Still, while he is careful not to jump too deep into the political fray when it comes to health care reform, Hilferty is a firm believer that something needs to change with health care in the United States.

“If you look over the past decade, the cost of health care in this country is now 16 or 17 percent of the gross domestic product,” Hilferty says. “If the costs are left unchecked, they could be 20 to 25 percent of our GDP. And you have more than 50 million Americans uninsured. Those two statistics alone point to the need for change in our health care system.”

But it wasn’t Hilferty’s job to solve America’s health care problems. His focus needed to be on preparing Independence Blue Cross for whatever changes were on the way.


Get prepared

The Affordable Care Act, also known as Obamacare, had become a hot topic of conversation in 2010. Hilferty’s employees, however, needed to be able to do more than just talk about it at the water cooler. It was going to be their job to help customers adapt to the changes reform would bring to health care.

“We started a series of meetings throughout the company that educated us,” Hilferty says. “We had people who became experts and we brought in external experts who would educate us on what reform meant, what we needed to do to prepare for it and what the timelines were to get ready.

“We took all that, broke into subgroups and developed plans and resource allocation through budgeting to map out how we were going to prepare for reform.”

Organizations that effectively adapt to major changes are able to focus on three keys in their transition strategy. The first key relates to corporate culture.

The cultural aspect begins with leaders and their awareness that just because they are the leader, they are not blessed with the right answer for every question.

“We want a feeling within the meeting room and around the organization where everybody feels comfortable with being open,” Hilferty says. “This isn’t about any one of us. It’s about achieving what’s best for our customers. We’re a traditional top-down organization, and we had to make people, regardless of their position in the company, feel comfortable about respectfully disagreeing or offering a different point of view.”

The situation at the meeting between Hilferty and Tufano was a prime example of what Hilferty wanted to see.

“Is it a perfect science?” Hilferty says. “No. But we’ve realized we’re a stronger company because folks are willing to weigh in with divergent points of view. Even though they might not win the day, they tend to get lined up behind whatever the final solution is because they feel like they had a voice.”

You’ll give people that voice by stepping back a bit when it’s a topic you’re not as familiar with as your department experts are.

“You’re the leader in setting the vision, organizing the company and getting everybody to sign off on a strategic and financial plan,” Hilferty says. “I’m not an expert in human resources and certain areas that go around that. So it’s about listening to those who have that expertise, who have that training and who understand the dynamics related to personnel and human resources and understand how to effectively achieve the company’s goals. Be willing to listen.”

The other keys are discipline and communication.

“Be disciplined at making sure you are being honest with yourselves, with each other and with the team about where you are ahead of pace, where you’re having difficulty and where you are spending more than your allocated budget to do things,” Hilferty says. “Do that in a way that is open, isn’t critical and keeps the focus on accomplishing the overall goal.”


Be up front with people

As Independence Blue Cross moved into some of the operational changes that would need to be made to be ready for health care reform, it became clear that efficiency would be really important.
“The biggest issue for us as a health insurer is there are new taxes, primarily a premium tax that will cost us tens of millions of dollars a year in additional federal taxes,” Hilferty says. “One of the key things we focused on related to that was using technology to really get the real-time data we needed to work with providers, our members, doctors and other health care professionals. We needed to improve our processes through the use of technology. When you do that, it can have an impact on people.”

It’s that impact, especially when you start talking about achieving workplace efficiency, that can stir fears in employees. Hilferty did not shy away from that possible outcome, but he did offer a plan to help people caught in the middle of the transition.

The plan would begin with offering employees, whose position was eliminated, the training they needed to move into a new position within the family of companies that Independence Blue Cross belongs.

If that new opportunity was available through a company that Independence Blue Cross has agreed to partner with, an effort would be made to “rebadge” that employee to work at the other company.

“We’ll work with the new company and hopefully you can transition to work with them,” Hilferty says. “If at the end of the day, there isn’t a position you’re interested in and there’s not a rebadging opportunity, we want to have a comprehensive effort whether it’s in terms of a severance package or outsourcing professional services that would assist you to advance your career somewhere else.”

Don’t make the stress of change worse by trying to sugarcoat it or by hiding behind false promises that will never be kept. Be upfront.

“It’s not easy to do that,” Hilferty says. “But in order to be competitive and be a really effective organization, we needed to face those challenges and we’ll continue to need to face those challenges.”


Reduce your stress

With an issue as complex as health care reform, it’s easy to get lost in all the details, deadlines, facts and figures that come with it. You’ve got to make sure you and your people don’t work yourselves to the point of being unproductive on the job.

“You have to enjoy what you’re doing every day,” Hilferty says. “When your work is finished, go home and get refreshed. Turn your BlackBerry off. Focus on your friends, your community, your pet ­— whatever it might be. When you come back, you’ll be more refreshed and ready to tackle it. We’ve really worked hard over the past three years to build that culture.”

As employees at Independence Blue Cross await the next few months and years for the changes in health care reform and the Affordable Care Act, Hilferty says he’ll stay focused on letting the people on his team at the $10.5 billion health insurer do their jobs.

“I’ve always gone into a position believing that if you have the right culture and you allow people to bring their strengths to the surface and you encourage them to be part of the process using their strengths, people do things that they never thought were possible,” Hilferty says. 



  • Prepare for the job.
  • Help people fit in.
  • Avoid burnout.


The Hilferty File

Name: Daniel J. Hilferty

Title: President and CEO

Company: Independence Blue Cross


Born: Darby, Pa.


Education: Bachelor of science degree in accounting, Saint Joseph’s University, Philadelphia; master’s degree in public administration, American University, Washington, D.C.


What was your first job and what did you learn?

When I was 12, I was a dishwasher at the Chatterbox Restaurant in Ocean City, N.J. I learned early that if you work well with the waiters and waitresses and you are polite to people, your job gets done more effectively. We’re about collaboration and truly being a leader in health care innovation. This is all benefiting the organization.


Who has been the biggest influence on you?

There are two people; the first would be my mother. My father passed away when I was 3. I was the youngest of five. My mother raised and educated all five of us and instilled the value of hard work and sticking together and working together. The second is a man who I had the good fortune of working for. He was the president and CEO of Mercy Health System. His name was Plato Marinakos. He taught me the value of creative thinking and team building.


Who would you most like to meet and why?

I mentioned that my father passed away when I was 3. I would love the opportunity to sit down and have a beer with the guy and just understand what made him tick. It would just be fun for me to understand who this guy was.


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