It takes vision and determination to challenge the norms and change the conventional course of an industry. Due to its complex nature, many details need meticulous attention to bring transformational shifts in healthcare, but there are significant opportunities for disrupters to provide smart solutions that make people’s lives better. When Erhardt Preitauer joined CareSource in 2018 he found his two decades of transformational leadership and government-sponsored health plan expertise were a perfect fit for the organization.
As an accomplished health care executive with a track record of driving significant growth, profitability, innovation, and operational excellence, Erhardt was able to leverage his extensive experience in building and leading mission-driven health care organizations to quickly adapt to the leadership role at the company. He succeeded the founding CEO, who had led the organization for 30 years and quickly adapted to the role. After just one year in the position, Glassdoor named Erhardt one of the highest-rated CEOs in the country alongside some household names. He ranked #20 on the annual list based on the favorability of employee reviews.
Erhardt credits employees with being the heart of the mission-focused company. CareSource is a nonprofit health plan with over 2 million members in six states. Founded in 1989, CareSource administers one of the largest Medicaid managed care plans in the U.S. and offers health insurance, including Medicaid, Health Insurance Marketplace, Medicare Advantage and dual-eligible programs.
At its core, CareSource understands the challenges consumers face navigating the health system and is transforming healthcare with industry-leading programs that improve the health and well-being of its members.
The Humble Beginning
Growing up on a small Hawaiian island with a diverse community based on solid but straightforward values paved the path for Erhardt’s journey. It gave him a perspective that helped him face several challenges in both his professional and personal life. He embraced these challenges, knowing “this too shall pass” and that got him to the right place. In his view, every challenge he faced set the foundation for navigating the last two years with the pandemic.
Erhardt believes that life is short so he makes it a priority to integrate fun into whatever he does. He credits his success to being surrounded by remarkable people and emphasizes the importance of this: “it’s all about people.” Erhardt considers himself fortunate for the incredible opportunities he’s had throughout his career and feels like he is exactly where he’s meant to be. He expresses, “I’ve worked for a few of the bigger national companies, but CareSource is where my heart is. I’m so grateful to lead this truly amazing and unique company.”
Healthcare with Heart
CareSource is unique in that it is the only organization that is totally independent, nonprofit, and purely focused on government-sponsored healthcare, such as Medicaid, Marketplace and Medicare. With $12 billion in revenue, Erhardt highlights that CareSource is big enough to have scale, invest in its people and communities, and continue to foster the strongest mission-oriented organization in the industry—but also small enough to pivot, innovate quickly and drive or react to new opportunities with little bureaucracy or conflict. The company also makes decisions differently and on different timelines, allowing for a highly transparent, straightforward, and longer-term view.
Erhardt believes these unique elements, along with some of the strongest operational and quality metrics in the industry, will propel its vision of being the leader in serving those with the most complex needs, while also achieving its mission of changing the lives and communities of all the people it serves.
A Transformative Impact
In its pursuit of being the best of the best, CareSource’s leadership thinks about what it does in two ways. First, it likes to raise the bar for everyone in a market it enters. Second, it also helps the entire system in these same markets—even when it doesn’t directly benefit CareSource. At the end of the day, everyone benefits.
Erhardt is especially proud of CareSource’s recognized programs that help people put their lives together outside of healthcare, commonly called social determinants of health. Many of the people it helps end up getting jobs and leaving the Medicaid program altogether. He notes, “We are the only organization that will invest in getting people off our membership rolls. We also partner with and help mission-aligned community-based organizations gain access to additional funds. Often, these organizations don’t have the needed business infrastructure or grant-writing capabilities. Helping these organizations benefits the entire ecosystem—even our competitors. We are also among the best operating and most innovative organizations in the industry. We often work with states in raising the bar in what stakeholders expect of health plans, which means everyone wins.”
Technology has advanced rapidly over the last couple of years, and Erhardt sees vast opportunities to utilize technology in new and better ways. There are a lot of traditional uses of technology in the industry such as telemedicine, data integration and clinical platforms. CareSource is investing heavily in these areas, but also investing in less traditional areas. This includes engaging people behind social media walls, supporting more being done in the home or community, and utilizing AI to help people make decisions and communicate. Erhardt says, “Engaging people is a big deal for us. Despite my team sometimes thinking I’m crazy, I also like to spend a little time and resources thinking way ahead – the Metaverse could hold a lot of potential for what we do. I realize that to the average person in Silicon Valley, these ideas are pretty mundane. In the healthcare world, this is fairly forward looking—which brings me back to the fact that there’s a lot of opportunity here.”
The Potential Change
Erhardt also has a bold point of view on the complexities of the industry. Looking at the different pillars of healthcare such as health plans, doctors, hospitals, pharmacies, ancillary vendors, PBMs, big pharma, and much more he wonders whether these entities have created unnecessary complexities and costs to preserve their place in the ecosystem. The lack of transparency can add to the challenge. He asserts, “There’s a lot of dialogue about how these different pillars can get more aligned, but I’m not sure it’s happening as fast, or as transparently as it should. I think about our mission, how we make decisions, our corporate form, our approach, our focus on lifting the entire system; we need to play a role in this. And, we are. We have crafted partnerships and initiatives in our markets that are truly unique in helping the system to better align in a fully transparent manner.”
Looking at the data, Erhardt believes that the future is in helping states serve populations with complex needs. He sees an opportunity to make a big difference in people’s lives, improving quality and impacting the overall cost of care. CareSource is preparing for it in every aspect of the organization. Its platforms are optimized for complex populations, it is piloting special programs and has hired many nationally renowned complex care professionals. Additionally, it acquired a company with a history of complex care. It’s clear that this is an issue that Erhardt is passionate about. He notes, “People with complex needs exist in every segment and population within the government-sponsored health plan. There is no clear leader in this area today—but I believe there will be one soon . . .”
When considering where he might be in the future, Erhardt sees himself at CareSource. He envisions continuing to build on CareSource’s mission and making a positive impact in people’s lives. He says, “I love the difference we make, love the people I get to work with, love the company, and love the communities we serve.”
Erhardt advises upcoming leaders aspiring to venture into healthcare to keep pointing forward, no matter what. He reflects on a conversation he had with a famous poker player. He told Erhardt, “Any idiot can win when the cards are running well.” What ultimately decided a successful versus an unsuccessful gambler was how they played when things weren’t going their way. Erhardt believes this applies to life, too; how you play when things aren’t going well determines your success. In his concluding thoughts, Erhardt says, “Don’t get too comfortable. Don’t get institutionalized. Shake things up occasionally. Surround yourself with amazing people that want to make a difference. Do the right thing for the right reason.”
CareSource is a nonprofit, multi-state health plan recognized as a national leader in managed care. Founded in 1989, CareSource administers one of the nation’s largest Medicaid managed care plans and offers a lifetime of access to care through health insurance, including Medicaid, Health Insurance Marketplace, Medicare Advantage and dual-eligible programs. Headquartered in Dayton, Ohio, CareSource serves 2 million members in Georgia, Indiana, Kentucky, Ohio and West Virginia. CareSource is also a partner in CareSource PASSE, which serves Arkansans with complex behavioral health and individuals with intellectual and developmental disabilities. CareSource understands the challenges consumers face navigating the health system and is transforming health care with industry-leading programs that improve the health and well-being of our members.