How I Made It: Blue Shield of California CEO Paul Markovich
The gig: As chief executive of Blue Shield of California, Paul Markovich leads one of the country’s largest nonprofit health insurers, and he is a major player in the state’s rollout of Obamacare.
Dakota days: Markovich, 46, grew up in Grand Forks, N.D., the son of two professors at the University of North Dakota. His father taught political science, and his mother lectured on economics and finance.
Much of his childhood was spent skating at the local hockey rink. His first jobs included serving as a hockey camp counselor and refereeing youth hockey games. In high school, he was a star defenseman and team captain.
Pass the puck: Markovich dreamed of playing collegiate hockey, but schools weren’t knocking down his door with scholarship offers. He walked on at Colorado College and appeared in only a handful of games his first season. After working hard in the weight room and the rink, he cracked the starting lineup as a sophomore.
Home life: Today, Markovich and his wife, Lisa, have two children, ages 13 and 10. Between soccer and other activities with the kids, he still squeezes in hockey Sunday mornings in a league in Oakland. “It’s really healthy for my ego to play on the over-40 club now,” he said.
Political aspirations: While studying political science and economics in college, he had plans to run for elected office someday. He was captivated by the late-1980s debate over U.S.-Soviet Union relations. After studying abroad in Moscow, he went to Oxford as a Rhodes scholar.
Young gun: At 24, he joined the New York office of Booz Allen Hamilton, the big management consulting firm. He worked on banking projects his first two years, but then one of the firm’s partners put him on healthcare.
Markovich embraced the sector as a perfect way to combine his passion for business with a social good that affects everyone. “It really appealed to my civic-mindedness,” he said. “If you solved a complex problem and improved the healthcare system, that would be beneficial to everybody.”
Getting the Blues: While working on healthcare projects he got engaged, and his fiance used her master’s degree in business administration to get a job in the Bay Area. So he headed west in 1995 without a job.
He landed a position as director of product management at Blue Shield, focusing on marketing and sales. The San Francisco insurer was struggling at that time. “It was a classic health insurance plan that had lost a lot of membership to upstart HMOs,” he recalled.
His bosses wanted him to shake up the company’s staid culture. But Markovich said he often ran into resistance, and by 2000 he was ready to leave.
“I left because I was getting frustrated trying to drive change at my level,” he said.
Something ventured: Markovich and two partners launched their own company, My Way Health. It tried to sell employers on high-deductible health plans paired with health savings accounts, a relatively novel idea at the time.
The group raised a couple million dollars to get started. But the dot-com bubble burst, and the stock market tanked before they could raise sufficient capital. He briefly worked for another start-up before Blue Shield hired him back in 2002 to be senior vice president in charge of a crucial customer, the California Public Employees’ Retirement System.
Size matters: He doesn’t regret his stint as an entrepreneur.
“You could move quickly in making a decision at a small company, but you couldn’t move the healthcare system,” he said. “To do that you need money and market share.”
Back at Blue Shield, Markovich rose through the ranks to become chief operating officer in 2009. He took over as chief executive a year ago when his predecessor retired. Markovich’s annual compensation in 2012 was $1.5 million. The company hasn’t disclosed last year’s pay.
The biggest challenge in the corner office, he said, is getting people to tell him what they really think. “They don’t want to bring you bad news,” he said. “But what you don’t know can kill you.”
Consumer gripes: Markovich doesn’t have to go far to hear complaints nowadays. Frustrated customers are venting about poor customer service in the transition to new health plans as part of the Affordable Care Act.
Blue Shield recently apologized for its “unacceptable” performance.
“Exchanges and health plans in California and across the country have been overwhelmed by last-minute volume and deadline extensions, which is causing serious delays,” Markovich said. “I believe we will work through all of this soon and ultimately make the Affordable Care Act a success.”
Twitter: @chadterhune
