Interview with Mass Assoc of Health Plans CEO Lora Pellegrini

Massachusetts Association of Health Plans (MAHP) leader Lora Pellegrini got interested in policy and politics at a young age. She had the opportunity to work with luminaries like Ted Kennedy and John Kerry early in her career, as she rose to prominence in healthcare policy.

Our discussion focuses on critical issues such as pharmaceutical pricing and hospital efficiency in Massachusetts. We explore the regulatory challenges in drug pricing and the necessity for hospital systems to innovate and enhance performance. Lora provides expert analysis on the impact of major players like Steward Healthcare and Optum in the Massachusetts healthcare sector. 

She also shares the historical perspective on healthcare reform in Massachusetts, and issues a call for employers to re-engage in support of affordability as they did back in the days of RomneyCare.

As of March 2025 HealthBiz is part of CareTalk. Healthcare. Unfiltered and can be found at the following links: 

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Host David E. Williams is president of healthcare strategy consulting firm Health Business Group. 

Episodes through March 2025 were produced by Dafna Williams.

Transcript

0:00:00 - David Williams
Health insurers are not always the most popular players in healthcare. They provide benefits to patients, hold the line on costs and promote accountability from providers, but health plans also get blamed when they appear to be stingy or unfair. So how do health plans see the world and what role do they play in quality, cost and access? Hi everyone, I'm David Williams, president of strategy consulting firm Health Business Group and host of the Health Biz Podcast, a weekly show where I interview top healthcare leaders about their lives and careers. My guest today is Lora Pellegrini, president and CEO of the Massachusetts Association of Health Plans, a nonprofit committed to promoting high quality, affordable and equitable care. If you like this show, please subscribe and leave a review. Lora Pellegrini, welcome to the Health Biz Podcast. 

0:00:56 - Lora Pellegrini
Thanks. Thank you for having me, David. 

0:00:58 - David Williams
It's a real pleasure. So, Lora, I want to ask a little bit. We'll talk about what's happening today with health plans in Massachusetts and more broadly, but I'd like to learn a little bit about your background, your upbringing, your career. Tell me a little bit about your childhood and any influences that have stuck with you. 

0:01:13 - Lora Pellegrini
Yeah, so I, you know, grew up in a small town in Massachusetts, had a pretty normal childhood, except that on my last day of second grade my dad was killed in a plane crash, and so I would say that that really changed my life and my family's life. So I think because of that experience I was always much more mature for my age, always took, you know, incredible responsibility and became very serious about my career at a very young age and actually wanted to be a congresswoman. So when you go into your security questions I probably will have to change it now. Congresswoman was my dream job. Yeah, so I loved politics. At a very early age I went to Catholic school. The nuns would tell my mother that I should vote because I knew everything about the candidates and where they stood on issues that. 

After high school Bishop Fann High School in Attleboro I went off to college and I majored in government and did internships in Washington, interned for Ted Kennedy for a few years, and when I came out I got a job with John Kerry and worked in his office and then went to work for Mike Dukakis at a very young age in the governor's office. So those were like incredible experiences and I kind of started at the top, and that's what's interesting about working on campaigns and getting in early, that you can working in a campaign. I met some of the most senior people in our state who were involved in politics, who were elected officials, and it really was able to give me a trajectory into the line of work that I loved, Lora, I have to say first of all, as I was looking through your bio, a couple of comments. 

0:02:58 - David Williams
One is that I often tell people if they can get involved with the campaign or even working, let's say, in state government. Get involved with the campaign or even working, let's say, in state government, you can get a ton of responsibility at an early age. That really, you know, goes far, you know long-term career-wise. But I have to mention also that I saw where you, you know, went to school at Wheaton College, and I have to say that there are two women that have been in my life that have been there very impressive. One is my mom, who went to Wheaton, and then another was Sandy Moose, who was one of the top leaders at Boston Consulting Group and, I think, actually the first female management consultant really in the world. 

So you're now the third person that I know of others, but I'll put you in the top three. 

0:03:36 - Lora Pellegrini
I think it was an incredible experience. It's really where I gained my voice and any self confidence that I might have really came from professors listening to me and really wanting to inspire me to speak my mind and speak my peace and speak my truth. So it was an incredible experience there and I will say you're right on about campaigns. I would say to any young person who might be listening, or their parents you know, you need to be a sponge. You are a sponge at a young age. You pick up and absorb everything, but raise your hand. I was always the person who would volunteer to do anything and I really became, I think, very instrumental and an integral part of a campaign because I was always willing to do whatever it took to get the job done. 

0:04:18 - David Williams
That's great. You know you had some of those early roles, but then you know, somewhat more recently, more sort of, you know, senior leadership role in terms of being head of the Massachusetts Women's Political Caucus. 

0:04:29 - Lora Pellegrini
What, is that organization? 

0:04:30 - David Williams
What's your role been there? 

0:04:31 - Lora Pellegrini
Yeah, so that I did this about over 10 years ago. I was president of the Massachusetts Political Caucus. We are an organization that is committed to electing pro-choice women to office in Massachusetts and, interestingly, over 10 years ago, when I would talk about the caucus and the influence that we had and the changes we were making, people were like, yeah, abortion's here to stay, we're fine, like what's the? 

purpose. And here we are right, just over a decade later, facing really unimaginable risks to women's health care. And so I came back to the organization this year, as so many not-for-profits did. They had a really rough go of it during COVID because they were so dependent on in-person events, and so they're struggling financially. And so I've agreed to come in at least for a year, maybe two, to try to right the ship and to get them back on their feet financially. And I just say to my board all the time we're struggling right now, although we're turning it around, but we should be the strongest we've ever been, given what women are facing nationally. 

0:05:31 - David Williams
Yeah, I mean, I suppose you know you could have been seen. As you know people shrug their shoulders. You know, 10 years ago or even more recently, and we only have to look at the news in the past. You know, few days coming out of Arizona, of what, you know what the implications are and that you shouldn't, just you can't, rest and be assured of anything at this moment. 

0:05:52 - Lora Pellegrini
Absolutely not. I think yesterday's decision in Arizona was pretty shocking and you know, a decision that happened before the Civil War, and so you know I was a big fan of not that I like the subject, but the Handmaid's Tale and it feels a lot like we're living in that world right now. 

So, I think women and men need to get politically motivated, they need to tune into the issues and if you're not, you're going to get a country you deserve, and I think we have a great country that. I want to make sure that it's going in the right direction. 

0:06:17 - David Williams
Yeah, I mean the Civil War. 

0:06:19 - Lora Pellegrini
So it's really you know it's just, you know, women's health care. I think we it's health plans too. We believe contraceptive coverage is essential part of women's health care, and the attacks on that, the attacks on abortion, so that's what I'm doing with that, and it's great work. 

0:06:40 - David Williams
So good that you've come back to that. I'm sure they appreciate the leadership I know you probably had. You know certainly a role in healthcare and the various administration roles and campaigns, but you also worked at Harvard Pilgrim. Was that your first real introduction to the health plan world. 

0:06:59 - Lora Pellegrini
It was. It was so. What I was going to say earlier is I lived in Texas for a few like three years. I was really interested. I worked in the Texas state legislature, worked on a variety of issues, but when I came back to Massachusetts I was looking for a job. And it's really ironic it was in the late 90s. 

Harvard Pilgrim did not have a government affairs like anyone even doing government affairs and it's such an integral part of what we do today and so I got the job at Harvard Pilgrim. 

It wasn't that I was really like going to work for a health insurer, it was just a great job that was available and Harvard Pilgrim was a great company and I just became very committed to the mission and it sounds ironic like it was my dream to work for an insurance company. Harvard Pilgrim had a great mission right. We were trying to provide comprehensive health insurance coverage at an affordable price to our members and at that time it was before the ACA and what we did in Massachusetts around health care and health reform. But certainly I believe that everyone needs to have adequate health insurance right, and when you get sick you want to know that card's going to work and you're going to be able to see the providers you need to see and get the care you need, and I think the folks I represent all believe that. But we're trying to make health care affordable, so that's how I got into this. Served at Harvard Pilgrim for 13 years before this role. 

0:08:15 - David Williams
Sounds good, and so then, why did you join to run an association? 

0:08:22 - Lora Pellegrini
So I had been on the board for a long time when I was at Harvard Pilgrim, the Mass Association of Health Plans, and I did really believe I had the skill set to lead the organization. 

So politics, understanding how government works, that's a key part of it. It's also being able to work with people to find compromise. And so, you know, I felt like I had the right skill set to lead. And Massachusetts is a very progressive state and so in that leadership, you know, really hoping that I could show political leaders that the health plans in Massachusetts, the ones that serve Massachusetts, are different and there is a social conscience and, again, that notion of we're trying to do do good. And part of doing good is trying to keep healthcare affordable for our members and unfortunately, I don't think every, every other constituency I'm not sure a lot of them share that belief. You know we've passed universal access right. Everyone's going to have some form of health insurance or they have access to it. But affordability how do we keep it affordable? So this experiment through the Affordable Care Act, with what we've done in our state, can remain viable and it doesn't collapse because of the cost. 

0:09:38 - David Williams
It's a good name, the Affordable Care Act. You know it implies affordability. It's about a lot about access, are there what's the tension in terms of access versus affordability? You know? 

0:09:48 - Lora Pellegrini
I just I look at you, know. So we did the access piece. We've done Medicaid. We've done a subsidized product for folks who make too much money for Medicaid but are too poor to really afford private insurance. We haven't done as well on the cost side and that was part of the agreement in Massachusetts when the business community came together with state officials and then our law that we passed in our state really became the framework for the Affordable Care Act nationally. So, and we still in Massachusetts I like to remind people we're doing our taxes. Right now it's tax season. 

0:10:21 - David Williams
We all have an individual mandate. 

0:10:23 - Lora Pellegrini
We're required in Massachusetts, as an individual, to have health insurance, and so I think part of my frustration is, you know MAP, the organization I represent. We're really committed to affordable health care. We're trying to take finite resources and spread them, take finite resources and spread them. But a lot of other actors in this space, I don't think, have gotten the memo and I think it's very much about trying to maximize profits, make the health plans the bad guy and push their agenda, whether it be higher reimbursement or whatever it might be, or to take away any tools that we have to try to um make healthcare affordable. So removing prior authorization that's been a big issue this year in the legislature um, which would just drive costs through the roof Astronomically we actually did a study on that that it would increase everyone's premiums by about a thousand dollars a year. 

0:11:15 - David Williams
Nice, so um. So I was going to ask you kind of what the key issues are. I could hear affordability. I could hear you know removal of the concern about removal of the tools to promote cost containment. Are those the key issues? What else? Yeah, I think you know we were just. 

0:11:36 - Lora Pellegrini
I just got a phone right before this. I'm talking about drug prices. Yeah, you know, I just got on the phone right before this talking about drug prices yeah. 

You know, the average profit of the pharmaceutical industry is about 23%. 

Health insurers make about 1%, if they're lucky, usually less, and we're very highly regulated. The hospitals and the pharmaceutical industry do not have those same requirements, and we also have a lot of new drugs coming to market that are very, very, very expensive, and so how are we as a country going to be able to afford that? I think we're seeing, with Ozempic and some of the new diet drugs that are getting a lot of play they're breaking the bank for the federal government and for states. So I would say pharmaceutical spending, provider prices, provider demands we're seeing 20 and 30 percent rate demands, despite the fact that Massachusetts has a cost benchmark that we're all supposed to be trying to follow to keep our spending in line with the state's consumer price index. But we're seeing huge demands from providers. And then, of course, we've got what's been really dominating the news in the past few weeks is private equity and the steward crisis and what's happening there. So those are the big issues in my space, right now, yeah, that sounds like enough. 

0:12:48 - David Williams
Enough issues to to deal with. So some of them sound like they are a national issue, especially the pharmaceutical one, is not necessarily going to differ state by state, is not necessarily going to differ state by state. Do you have a sense that what you're seeing on the provider side is that different than elsewhere with the sort of big increases that you're looking at? And then, of course, stewart is not in every state, although they're quite dominant, right? 

0:13:13 - Lora Pellegrini
So there are things I would say. On the pharmaceutical side, there are things the states can do. Obviously, what we're trying to do through CMS is probably going to be the most beneficial where they're trying to establish a price, but there are things that states can do, such as prescription drug boards that look at the pricing and hold the pharmaceutical manufacturers accountable for their pricing. I think sometimes the public shaming is all you really need. So there are things, but obviously the tools are more at the federal level. On the provider prices, I think Massachusetts is unique in that we pay providers among the highest, if not the highest in the country, rates of reimbursement, and I've been doing this for a long time and I have to say it never seems to be enough. And so it's starting to make me wonder how efficiently our hospitals are running, and as somebody who has an elderly mother who, unfortunately, is up close and personal with the healthcare system a lot of the time it doesn't run that efficiently. 

You know, my mom waited a week during COVID. 

She was in the hospital, she had AFib, waited a week to get a CAT scan, like they were about to discharge her. She wasn't on any heart monitors or anything. She sat in a bed for a week waiting for a CAT scan, and that wasn't because of overcrowding or whatever, it was just that she was stable and other things were taking precedent. But I think you know we need to use better use of the hospital and the diagnostic testing because she could have, if she had gotten that test quickly, could have left the hospital and freed up that bed for somebody who needed it. So, you know, I think the frontline workers did an amazing job during COVID and I know they're exhausted. But I think the hospital system needs to work more closely with the insurers and we need to figure out how we can work together to make a more streamlined system, whether it's on some of the administrative stuff that we can simplify for them, but also on their side, how they can be more efficient, because consumers and employers can't take 20 and 30% rate demands. 

0:15:10 - David Williams
Yeah. 

0:15:11 - Lora Pellegrini
We can't agree to those. 

0:15:12 - David Williams
Yeah, so you mentioned Steward Healthcare and that's gotten some attention because they've had a financial crisis and there's been concern about the stability of their hospitals. It looks like they may be selling their physician practices physician network to Optum. How do you look at that from the sort of the Massachusetts perspective and, from you know, how do your members look at that? 

0:15:38 - Lora Pellegrini
You know, I think, that the health plans were concerned about the quality of care in those hospitals and the Department of Public Health is now in there monitoring that and I believe there's a sharing agreement now among other hospitals so that they do have the devices, the tools that they need to do any procedure that might be coming their way. So of course, we know that story in the Globe where the woman bled out and hemorrhaged and they did not have the right equipment. So I think they've taken care of that problem through the Department of Public Health. But that was a major concern of the health plans Are our members safe going to those institutions? I think. 

Now the question is what hospitals could close and not create a crisis and which ones must stay open because they're really critical access hospitals that need to serve their community. And how are we going to make that happen? I think that you know MPT, which owns the real estate, has given a bridge loan to Stewart, but I think they've said that needs to be. They need to have in place or needs to be paid back in June by June, and they need to sell the physician group in order to raise the money to do that, or else there could be potentially a bankruptcy of stewards. So the Optum deal seems to be. Optum seems to be the only one who has stepped up to want to buy the physician practices. But then that raises concern because they've already bought, you know, atrius and Reliant. 

0:16:56 - David Williams
Yeah. 

0:16:56 - Lora Pellegrini
So you know, I think, for our plans right, I'm not saying in this instance I think we're always, you know, concerned about consolidation and whether it's going to add value. And I know the regulators are looking at this. But this is a big problem for the state and so you know they're going to have to figure this out. But obviously we're looking at all of that and the DOJ could be involved. I guess I just don't know, looking at all of that and the DOJ could be involved, I guess I just don't know. 

0:17:22 - David Williams
I think they're on a tight time frame, so I don't know if the DOJ will be involved in looking at this. I know that you know. On the one hand, I don't want to go to the hospital you talk about, your mother probably like to have been out of the hospital. I don't want to check into a hospital. You want it there though when you need it. There does seem to be when when hospitals are threatened, like with the Stewart situation. I know that, for example, senator Warren saying you know the number one priority is keeping the hospitals open, and I wonder whether that makes sense as the number one priority, given what you said about you know, cost and efficiency. Is that? Should that be the focus? 

0:17:58 - Lora Pellegrini
You know, I think that might be a broad statement. I think maybe the question is we need to ensure that patients have appropriate access, and that really leads us to statewide planning, which I've advocated for a long time, and people are starting to look at that again. We have hundreds of transactions that have gone through the Department of Public Health for expansions, additional beds, new equipment, and I'm always scratching my head because if you build those things, you need to fill those things or use those things, and so if we had more of a statewide planning mechanism, we could see where we have redundancy, where there are critical needs. And so my hunch is on some of these hospitals they maybe could close and that's hard for any legislator, it's their district, but they maybe could close because a lot of care pre-COVID was really moving out to the outpatient setting. 

There are so many surgeries and things that happen today in an outpatient setting. But there are some that are critical. So I think more planning by the state would help answer some of those questions. But for politicians, I'm going to tell you, it's probably the hardest thing to think your hospital might close, because that is jobs, that's good paying jobs in your community. 

0:19:08 - David Williams
Yeah, fair enough, let's wind the clock back a little bit. In Massachusetts, and you're talking about the landmark legislation we had here that really formed the basis for the Affordable Care Act. Now, interestingly, of course, affordable Care Act was Obamacare done under a Democrat. Here it was called Romney Care and you know, governor Romney was not a Democrat and it seemed to me at the time it represented a very interesting consensus among different groups, focusing on access, yes, but also cost, including the business community, and I'm wondering, you know, has that changed? And I seem to see, for example, the business community less active perhaps than they were at the time. Yeah, what's occurred? You know the players have changed. 

0:19:55 - Lora Pellegrini
I sometimes wonder if I've been doing this for too long, because I've seen the different players go through. I will say the players have changed. I sometimes wonder why I've been doing this for too long, as I've seen the different players go through. I will say I'm a Democrat. I was in the room when Mitt Romney presented his plan on health reform and I was like awestruck. It was so brilliant. It was brilliant how his vision and what we have today may not be exact. And what we have today may not be exact. And at the time I remember when they wrote the law in Massachusetts, they wrote it giving, like our state's health connector a lot of authority to figure out how they were going to operate, gave, you know, the Health Policy Commission a lot of authority to figure out their rules. So I remember I worked for Charlie Baker at the time and he was calling me as we were reading the law and he was like, like what do you think? And I said, well, it's all going to really depend on who the next governor is, what this all looks like. And Deval Patrick won and he controlled a lot of the implementation of this through those various entities and so maybe the exact vision. 

I think, for instance, romney would have thought that exchange the connector where we the market for buying products. They saw it as like the Expedia of healthcare. You could go in if you wanted to go to a Holiday Inn type health plan. You could have that kind of low cost bare bones. If you wanted the Cadillac and want to stay at the Ritz, you could have the beautiful like fully loaded health plan and there'll be lots of choices for you. And what has really evolved is a very prescriptive approach. So those things you know changed as time went on. So it's just been interesting. I think the first decision they made was adding prescription drug coverage, mandating that be part of a benefit. Back then, prescription drug coverage, a lot of people didn't have it as better than their policies, but that was something proactive. 

So you know, having a more progressive governor, it got you more progressive policies. I would say. All in all, the law has been a tremendous success. On access, we have almost everyone in our state covered. That's, I think, a wonderful thing. I think where the rubber's hitting the road right now is on affordability. The business community doesn't really spend a lot of time on healthcare. Most of the organized groups and that's a difference. When I was doing this at Harvard Pilgrim, they were very involved and there's a new coalition that is emerging. I think that may be just focused on healthcare and that may help bring some balance to the conversation. But, as you started out this conversation, the health plans alone, talking about affordability, is not going to win the day. People think we have ulterior motives. We want to pay our CEOs millions of dollars and that's why we're talking about the things we're talking about. I can tell you that's not the case, but I probably do need some allies in this conversation to be successful. 

0:22:44 - David Williams
Fair enough. Well, I think you know business, obviously paying the bills, so they're not paying attention to it. But there's a real trade-off. You know, if your cost that's already a big cost goes up by 20% in a year, that affects your hiring, that affects your capital spending. It's not just something that you can shrug off. So I think it's time for that employer coalition. So I'm looking forward to seeing how it rolls out. 

0:23:08 - Lora Pellegrini
Yeah, absolutely. 

0:23:09 - David Williams
Lora, I have a last question for you, which is if you find time, with all that you're dealing with, to read, if there's any books that you might recommend to the audience to read, if there's any books that you might recommend to the audience. 

0:23:26 - Lora Pellegrini
So I read everything on politics. I've read everything, most recently on the Trump administration, from his staffers. I'm into the Liz Cheney book that she's written. And then one of my CEOs today told me I had to read a book I think it's called Nuclear War, which sounds a little too depressing. 

It does yeah, that is going to be. I guess it's a New York Times or soon to be a New York Times bestseller about nuclear war and what would go into that, and the decision making and then thinking about the kind of president you would have who would have to make those decisions. So that'll be next on my list. But I'm doing a lot on Audible, which I find is the way. I can read books because you can go for a walk and listen to your book or be in the car. 

0:24:00 - David Williams
Oh, that sounds good. I have not read the Liz Cheney book, but she was the speaker at my daughter's graduation recently, so yeah, she's really quite amazing. 

0:24:09 - Lora Pellegrini
Yeah, and I think she's a truth teller, and it's funny how truth tellers are sort of isolated. Yes, yeah, that's not a job. 

0:24:20 - David Williams
If you want to be mispopular, yeah, exactly, Great. Well, Lora Pellegrini, head of Massachusetts Association of Health Plans. Thank you so much for joining me today on the Health Biz Podcast. Thanks so much, Dave Bye-bye. You've been listening to the Health Biz Podcast with me, David Williams, president of Health Business Group. I conduct in-depth interviews with leaders in healthcare, business and policy. If you like what you hear, go ahead and subscribe on your favorite service. While you're at it, go ahead and subscribe on your second and third favorite services as well. There's more good stuff to come and you won't want to miss an episode. If your organization is seeking strategy consulting services in healthcare, check out our website healthbusinessgroupcom.