Preferred Care Partners: Joseph Caruncho, CEO

by HCE Exchange on August 19, 2010

Preferred Care Partners is enjoying significant success and growth. The Medicare Advantage Health Plan

’s has grown to more than 21,000 patient members in and around Miami-Dade, Broward, Lake, Sumter and Marion Counties, Florida. The Miami-based company employs a little over 250 employees and Preferred Care recently expanded its coverage area to Medicare beneficiaries in Lake, Sumter and Marion Counties, Florida, making Preferred Care Partners one of the largest privately owned Medicare Advantage health plans in the State of Florida.

In 2005, Preferred Care Partners acquired the Medicare business from Neighborhood Health Partnership, at the time, the largest HMO in Miami-Dade County. This acquisition caused Preferred Care’s membership to grow significantly. Seemingly overnight Preferred Care became one of the largest privately owned Medicare Advantage Health Plans in Florida with revenue in excess of $300 million. Providing care options for a large percentage of older Florida residents, Preferred Care’s growth rate didn’t stop there. In 2007, Preferred Care reported a growth rate of nearly 700 percent for a three-year period and was named by INC Magazine as one of the fastest growing companies in America. And recently Preferred Care invested nearly $12 million on infrastructure, namely implementing a brand new software solution for health care administration system called Facets by TriZetto. This state of the art system allows the organization the ability to expand to a million members and creates efficiencies and reporting capabilities

CEO Joseph Caruncho founded the company in 1996 after 13 years as a corporate healthcare attorney and currently works as CEO overseeing the growth of PCP. As Chief Executive Officer, Caruncho directs the health plan’s corporate strategy and oversees Preferred Care Partner’s management team. In 2005 he was named both the Ernst and Young Entrepreneur of the Year in healthcare in the state of Florida and Healthcare CEO of the Year, by the South Florida Business Journal. He followed up these recognitions two years later by being named to Hispanic Business Magazine’s list of 100 Most Influential Hispanics in the US.

Principles of Simplicity and Patient Care Partners

When you listen to Caruncho speak about the company, there is a very apparent theme that Caruncho continually wants to reinforce and that theme is a message of simplicity. Caruncho strives for simplicity in both organizational structure and systems and he’s always on the look out to make sure that things don’t become more complex. Preferred Care Partners emphasizes four fundamental principles that tie into the improvement of members’ health: providing access to health care services, choices regarding health care needs, simplification of the health care system and embracing member’s diverse culture and background.

Start-up Smarts

Preferred Care Partners embodies the entrepreneurial spirit that is attempting to solve some of the problems with health care, especially when it comes to managed care and government programs. Preferred Care Partners had its origins in the late 1990’s, when Caruncho learned of new legislation that would allow for the creation of Provider Sponsored Organization (PSO), that let physicians bypass the traditional HMO route and contract directly with Medicare.

“When I was in practice, I would be representing physicians and providers and I would hear them complain over the years about the way HMO’s managed care and it was kind of an adversarial relationship between the HMO and the physician. When this legislation presented the opportunity, I thought it was a good opportunity to offer an alternative to the traditional model.”

Enrolling a few doctors at first, Caruncho’s ideas were validated when he received overwhelmingly positive feedback, which gave the burgeoning group the motivation to launch a pilot program to test out the theories further. “We began the pilot program with a few thousand members. While we went through our licensing process, which took a significant length of time because we were the first PSO in Southern Florida that was recognized by Medicare.”

Tackling the Status Quo

After gaining licensing, the organization continued to enjoy growth under the original management team, “Most of the management team started out while we were till in development so that was important to me because I didn’t want to start the company hiring a lot of traditional HMO execs; we got a bright young team and they’ve all been with us every since.” Keeping this independent spirit and staying true to the organization’s roots is very important to Caruncho especially as the group grows bigger every year. “We started as a small group, wearing many hats. I like to say we all licked the envelopes and answered the phones, so one of my biggest responsibilities is to maintain that start-up mentality, while recognizing that in order to grow as quickly as we have, you need to build infrastructure and processes. So the question becomes: How do you grow while preserving the entrepreneurial spirit?” Caruncho refers to this process as social architecture.

“Culture is the result of what you do, it’s something you design, it’s proactive. I’ll challenge anything that smells of bureaucracy.” Caruncho believes that one of the keys to Preferred Care’s future success relies on it maintaining a simplistic system.  “I’ll almost always challenge someone who says ‘we used to do it that way, but we can’t do it like that any more, now that we are bigger.’ Talk like that sets off an alarm in my head!”

A Commitment to Employees and Members

Besides inspiring his employees to think outside the box, Caruncho sees maintaining a roster that grows with the organization as very important. Preferred Care finds itself in the unique position of having employees who want to stay for the long haul. Ensuring that these long-term employees have the skills needed to progress through the organization means setting up a training program that develops leaders. Inspired by their original junior marketing team who rose to the position of department directors, many employees have begun at entry-level status only to become part of the company’s leadership team. And Caruncho is building on that resource with many programs to aid in retention and quality. “We’ve always promoted, in fact, we’ve bent over backward, to promote from within. The entrepreneurial spirit is ever-present. Employees see that the senior management started at entry level, so people believe they can build a career here.”

“As the company gets better we have to address how we give them the skills to do this.” Implemented through the human resources department, the organization began Preferred Care University, a training and development program. Polling different departments helped to create a curriculum, which includes teaching effective presentation skills, leadership course and technical training. There are also three-day programs for all employees and Florida International University has become a partner in assisting with course creation.

Caruncho says employees look forward to the courses because they view them as an opportunity to acquire leadership and technical skills that they can use to move forward within the organization. “We highly encourage participation, but it’s not mandatory. Mostly everyone takes advantage of the education program though. We do it during business hours so we aren’t asking them to take time away from their families and it’s at no cost to them, we feed them, they enjoy a fun experience, so it’s obvious why few people turn it down.” Caruncho adds that he always makes it a point to attend some of the sessions so that staff see that senior management buy into the program as much as others do.

“When we started, we were the new kids on the block, the comment on us was we were naïve, but we’ve grown from a start-up to the third largest privately owned Medicare plan in our market, first in terms of a privately held health plan. Over the years we formed great relationships with our doctors, we treat them well and they are very loyal. Our members are also quite happy with us; we were rated first last year in terms of overall care in the state by our members.” Caruncho credits programs like their feedback program with helping to improve member satisfaction. The organization has phones set up only for outbound calls to members, so that they can collect feedback and learn how to better serve their membership. Caruncho says this has worked very well to increase retention rates. “We put our brightest people in customer service, the idea is that if you want to improve your members health, you can’t do it if they leave after six months.”

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{ 4 comments… read them below or add one }

gail hosford March 1, 2011 at 1:43 pm

i am very disappointed with preferred care partners gold plan mainly the argus dental program that gave me no indication that there is a 1500.00 limit for my dental services per year i am in the liberty plan with them and recently got turned down for services because they claimed i had met my yearly limit. i attended 2 seminars before reaching my decision to join the gold plan and i have a detailed brochure out lining all benefits of argus dental plan and no where in the brochure or your summary of benefits does it indicate i have a 1500.00 to my benefits i feel i have been slighted and regret enrolling i feel your agents should be better informed and the dentists that accept this

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antoinette witscher June 6, 2011 at 5:50 pm

Thank you Gail for letting us know about this. You are right, nowhere do I see anything about the $1500 limit. I will now think very carefully about what dental treatments I have done. This is probably why dentists who did not go along with the plan also were not aware of so there’s a lot more money now for them to make. Where before I had a choice of 1 0r 2 dentists, now I see they are all on the bandwagon.

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ALBA GOENAGA November 15, 2011 at 6:35 pm

POR FAVOR CUANDO LLEGAN AL CONDADO LEE, NECESITAMOS UN PLAN COMO EL DE UDS, GRACIAS Y ESPERO RECIBAN ESTE MENSAJE

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