reveries - jay silverstein - oxford health plans

AUGUST 1997

Jay Silverstein barrels down the hallway with all the energy and determination of Teddy Roosevelt charging up San Juan Hill.

A young woman thrusts a press release into his hands. He scans it quickly and hands it back with a quick, "looks great, let's go with it." He barrels on.

The press release announces that Oxford Heath Plans co-founder Steve Wiggins is stepping up and handing over CEO responsibilities to Bill Sullivan, the company's 34-year-old president. The crisp dispatch with which Jay signs off contrasts starkly against the skeptical Wall Street reaction reported in the next morning's edition of The New York Times.

But Jay never wavered. "I went to Steve Wiggins and said it's time to promote Bill," he recounts. I said, 'Make him a king and he'll become a king,"

Jay Silverstein, best-selling author, pop-art collector and chief marketing officer of the fastest-growing health care company in America, was quoting William Shakespeare again. He really likes to do that. He really likes just about everything he does, and thereâs not much mystery why.

He was just twenty-six when he first joined Oxford Health Plans eleven years ago and became its one-man marketing department. Except for a brief, Hollywood-writer hiatus, Jay has lived and breathed Oxford's pathway, step-by-step. He now heads a 200-person marketing department.

Jay doesn't just contribute his energy, enthusiasm, experience, creativity and intellect to his work. He pours his whole being into it. He especially seems to enjoy tossing in his own special brand of merry pranksterism -- the kind that once caused him to be thrown out of the Vatican for staging a paintball war there.

When you consider that this $4 billion company currently operates in just seven markets, you really start to appreciate the magnitude of the tail on Jay's tiger. But you can't begin to understand the kind of marketing energy that sparked such overwhelming potential until you spend some time understanding Jay Silverstein."

What makes you so sure of yourself?

People wonder how I can look at something so quickly and say, yes itâs on strategy; or no, it's not. Or, yes, that's right; no that's not. I can do that because I look at things in terms of whether I would want something, as a person, as an individual. This is my blood. There's no dissonance between the message the company is putting out there on the advertising side and the way we are aspiring to deliver it internally.

We've also got a positive spiral going here. Bill Gates talks about the positive spiral in his book -- one of the most disappointing books Iâve read in the course of the last two years. But in his book he talks about the positive spiral and uses Microsoft as an example.

They have a vision or an idea and they bring the idea to market. Then they go to the capital markets to raise funds, and the capital markets understand the vision and relate to the people. Capital starts flooding in and there's an appreciation of the stock, which starts attracting a new level of talent and different kinds of people start joining the company and new levels of interest. It just keeps going, fueling and fueling in a positive way. Oxford is one of those stories.

You started out in advertising. You came to Oxford Health Plans, you left, and then you came back.

I went to work at Ogilvy during its heyday. There was an incredible amount of talent at Ogilvy and Mather in those years. Tons of new business. It was a great time to be in the advertising world and a great time to be at Ogilvy.

In late '85, I left with an Amex client and started a small direct marketing firm called Millennium. Then I was introduced to Steve Wiggins through a mutual friend. Steve was thinking of starting an HMO and he really had no clue what he was going to do other than that he was going to have board-certified doctors.

Here I was, somebody who had spent four years working on the American Express business at Ogilvy. We started thinking about American Express and who they are as a company, in terms of services and different audiences. There are a lot of direct analogies you could draw between American Express and Oxford Health Plans. We have members and they have members. They have restaurants; we have doctors. We are not delivering the care, but we can facilitate a better experience.

Our business is even more complex because we're dealing with your life, not just your pocketbook or wallet. Plus, there was a study put out in 1986 that said that health care is and will remain a local game. I had all of this training in how to take a global company and make it extremely local.

I came out of Harvard in '81 with a dual degree in decadence and debauchery.

I'd like to say that we planned it all out. But the one thing we didn't realize then that we now know today, is that everybody aspires to the highest quality when it comes to their health care. Weâve proven that price is not the key driver because weâve never been the cheapest health plan. Weâve proven that value is what people want. It doesn't matter what audience it is. Everybody aspires to have the best.

Going back even further, to when you were just a boy, what did you think you wanted to be?

Not a fireman. When I was in school growing up I aspired to be creative. All my friends who I grew up with are the same way. We would do projects, shows. We'd write Broadway musicals, off-Broadway musicals if you will.

Whenever we needed money, when we were in the tenth grade, a group of us would go and do stand-up comedy acts. We'd stand out on the streets of Philadelphia, do stand-up monologues and the works, with a hat out. We'd get enough money to get cheese steaks and a six pack.

But you didn't pursue a career in show business, why not?

Well, I got my chance when I took a leave from Oxford in mid-1989. I went off to L.A. and wrote a book called "I Worship The Very Dirt She Treats Me Like." I wrote it with my best friend, Josh Raphaelson, in a partnership. The subtitle of the book was, "The story of a warm, caring guy in a world of cold, calculating women."

It was really a cathartic experience. It was stories of bad relationships I had had. In retrospect, they weren't really relationships -- they were more me pursuing people. We sold a lot of copies -- about 70,000. We did radio shows, I did Oprah and Sally Jessy.

Josh and I were also working with Will Smith, The Fresh Prince of Bel-Air, on his show. We were quasi-consultants on the show, on an unpaid basis. But we were working with Will on writing a book. It was a white man's guide to hip-hop. We had sentence diagramming. Like you can say "black fly honey," but you can't say "fly black honey."

I have this theory that 300 years from now someone's going to pull out old videotapes of Dobey Gillis and there's going to be a religion following Maynard G. Krebs.

Will was hysterical. What we were doing was writing the stories, in humorous fashion, that he would end up singing. Every one of his songs was based on something that happened in his life. It was a lot of fun.

You did all of that and then you came back here. Why did you do that?

This is my blood. I discovered that my creativity, while I enjoy writing on a blank piece of paper, writing screenplays and things like that, I can have a much greater impact on people's lives here. American Express has a line, "Doing well by doing good." This is a noble mission.

The writing and publishing of the book was wonderful and something that no one can take away from me. There it is. But it was more rewarding to get a letter from someone and meet the person whose life I saved, and thanking me for saving their life, because our Active Partner program identified that they were missing a routine physical and they went in and were diagnosed with cancer and it was early enough on so they were able to avert it. It wouldn't have happened, that person claims, had that letter not come into their hands. That's really cool.

So, the more I get to do that stuff, that's the stuff that makes me keep coming back in here every day. It's also neat to be able to develop all of these new programs and initiatives because I believe we can change health care in America, that we can change the way people access it, the way people get it, the way it's delivered to people because of information. There's so many things we can get involved in and do because of the power of the data we have. That, to me, is really exciting.

What is the key difference between Oxford and all of the other health plans? What is the big idea, in effect, behind Oxford?

It's Hollywood high-concept, if you will. It's "what if you could marry a Nordstrom's and an American Express with the best physicians the world could offer?" That's the Hollywood high-concept.

There are so many things executionally that differentiate us, in the sense that we truly have implemented that vision throughout the company. There are a series of six or seven different groupings of initiatives you could look at, all under the spirit of enabling consumer choice.

When we built this thing and we had a bunch of Park Avenue doctors, and we believed that better quality doctors would practice better quality, less abusive medicine. We were selecting doctors to participate in the program who were traditionally atypical to joining managed care.

One of the common beefs about managed care is that consumers wonder if doctors are just trying to build their businesses and that's why they're joining an HMO. That's more specific to New York than other parts of the country because New York started with clinic model HMOs and so there are a lot of negative feelings about it.

The other part of the challenge we face -- and we still face today, interestingly -- is you can't sell a brand until you sell the category. Unfortunately, we're in a category that ranges in its delivery of care and service -- to use an analogy from the auto industry -- from Kia Motors to Rolls Royce. But the consumer believes we're all the same.

The consumer also has extremely low expectations of their health plan in terms of service delivery. When they call us on the phone they're prepared to do battle.

Part of the challenge we still face today is educating the consumer that there is a difference out there. The movement weâve made recently is to deliver a series of features, service features that are "forktual." They call me "Mr. Forktuality."

Beg your pardon?

You gotta be able to stick a fork in it. We used to be, "More than Health Care, Human Care." Well, what the Hell is that? It's a nice tag line. In fact, that's actually become the credo for the way that we deliver the service. It's a good thing internally, but not externally, because you canât stick a fork in it. We can't talk quality unless we give the consumer tangible things that they can understand. We can't talk service unless we give them services and features.

For example, in the past year, we've rolled out a concept called DSMs or Dedicated Service Managers. This is the ultimate one-to-one marketing. We've literally re-aggregated our service around one individual for each set of 2-3,000 people. They uniquely handle each member's needs. We've created a relational database that enables them to deal with members not only on a reactive basis, but proactive.

You must have an incredible amount of information about your members. How do you deal with issues of privacy?

All information is extremely confidential, especially the health-related information.But we have been able to become very effective one-to-one marketers and the DSM concept is one of those things that a consumer can understand. In the world of service, the consumer can understand having an individual who is accountable, who I can call upon and leave a message.

So we've created a whole company on that model of service. We've created Oxford On Call, which is a 24-hour telephone service. There's a whole series of benefits, features and services of the company that you can look at, read, understand, stick a fork in and understand the value as a consumer.

Is there any applicability to your business from packaged goods marketing?

Some. I think a good packaged goods marketer, from the Procter and Gambles of the world, brings more structured science.

I never want to be a necessary evil. That's the way I voted in the last couple of elections.

Service businesses tend to play the game without rules. Packaged goods companies have a structure by which theyâre going to think. I'm more a fan of unstructured thinking.
I'm also a fan of "show me some research, get some information, find ways to do it, but don't wait." The theme I use around here is Ready, Shoot, Aim -- as long as you're ready to re-load.

Because what are you going to learn in a test that you couldn't have learned live as long as you're prepared to be all over it and make the necessary changes? I want people to keep shooting, shooting, shooting, shooting, shooting. The one thing I've learned, is -- and I learned this from watching Microsoft -- consumers reward and appreciate innovation. And they are much more patient with an innovator.

We're going to roll out program after program after program. We're going to keep trying and trying and innovating and innovating and innovating, with the consumer in mind. And what we've learned -- and this is why we have such strong retention levels -- consumers and our doctors and our employer groups appreciate that.

Is that the thinking behind your alternative medicine program?

The numbers were there that said we should be doing it. We did a study and found that 70 percent of our members were using some form of alternative medicine. It's a classic example of being close to the consumer and being open. That's been part of the maturing of our management -- the more mature and comfortable you are the more open you are that your ideas are right. You learn to really think a little more open and to be more embracing.

And (Oxford chairman) Steve Wiggins much more embracing and is actually heavily into alternative medicine. His son has been cured of asthma using a naturopath. It woke him up to a lot of things. I always thought that the more intelligent you are the more open you are. You can imagine the battle we had with our physicians to get them to embrace the fact that there may be something to alternative medicine.

How do you do that? How do you communicate the benefits of alternative medicine to them?

What we do is talk to them about consumer choice. We go back into the history of it, in over 2000 years there must be something working. Just give us the benefit of the doubt that something must be working. This is not a replacement; it's a supplement. The consumer's going to do it anyway.

Many of the doctors have learned to accept it for these reasons. If the consumer wants it, we have to be the ones to provide it, we have to make it available.

How do you plan for that? How can you tell what people will need?

By using database marketing to understand your lifestyle, your preferences, your family history. If we do our job right, we're going to be putting information at your fingertips before you even know you need it. But it's not going to be big brother and it's not going to scare the Hell out of you.

We're always visualizing the customer. When we launched the Medicare program I closed my eyes and pictured my father. I became my father. I thought about when he goes and gets his mail who else is bombarding him.

Some of it comes from my own personal experiences. Back in 1986, I was sitting here, a one-person marketing department, I was a twenty-six year old kid. We were competing against all of these extremely large, national health plans that were coming into New York. I'm getting beat up every week by Steve Wiggins. I'm getting beat up on why we're not hitting the sales numbers. I was stressing out big time.

So I go to the beach, and I'm up at 4:30 in the morning, watching what I thought was the sun rise... but it was the moon setting. My body is shaking because Iâm stressing out. I realized that we needed a wellness program. A simple number sticks in my head -- 87 percent of most illnesses are a function of stress.

The next morning I went in and wrote letters to the Learning Annex and to the 92nd Street Y and book publishers in addition to gyms. So we had the whole spectrum of things. And that simple little vision has expanded far bigger right now into what weâre doing with our membership. Thatâs concept of Healthy Mind, Healthy Body, our newsletter.

If we can reach into your life and get more proactively ingrained in your life, as a service and a support vehicle for you, we probably can predict and prevent many illnesses from happening. In an ideal world, the next evolution for us, weâd be able to market to you that we can definitively prove that you will live a healthier life with Oxford.

Some of it comes from my own personal experiences. Back in 1986, I was sitting here, a one-person marketing department, I was a twenty-six year old kid. We were competing against all of these extremely large, national health plans that were coming into New York. I'm getting beat up every week by Steve Wiggins. I'm getting beat up on why we're not hitting the sales numbers. I was stressing out big time.

The thing I love to do most of all, if I could paint a dream of the ultimate thing in my life, it's sitting with my close friends.

What's it like, going from a one-person marketing department to today a 200-person department?

Simplest answer is that it's very, very strange. My hands used to be on all the details of getting one thing done. Today, my hands are not really in anything. I'm almost invisible in the company.

I don't measure my impact by the meetings I attend. I measure against what gets done around here that was by nature of what I've said or done. You want to become almost this god-like thing, where youâre imposing your vision and values through your creativity and really just inspiring people, providing almost invisible inspiration.

The best leadership is invisible. The greatest work that gets done around here, in my eyes, is the stuff that I didnât have anything to do with, that people have taken to another level. Or, it was my idea, I just threw the idea out. There's nothing greater to me than having an idea, and then having it implemented and executed in a way that makes it even greater than the idea you had.

I've taken the marketing team and broken it up into teams of five or six people, who are now each working with me on different projects to create a better company for the future. I pull them in groups of five at all the junior levels and we do ideation, and strategy, so I can teach them how to structure their thinking and what kind of questions to ask. I don't give them the answers. Now they also have the discipline and structure without having the over-discipline.

It seems like you're always on. You've said that this is in your blood. But what do you like to do when you're not being chief marketing officer of Oxford Health Plans?

I love to golf. Golf to me is Zen-like. I love to walk around the course. Golf is a passion. I'm playing sax again. I played sax as a kid. I love to write and to read. I love good comedy. I love to be with my wife and just hanging. Now I have a baby girl that I love to sit with and teach comedy to. I love art. I have a pretty big pop art collection.

There are times when I just sit and watch people. I'll go into New York City on the subway and I'll just ride. I'm watching people, just watching how they act and interact. You know, it's really easy to say you're marketing in Brooklyn, but are you walking the streets in Brooklyn? You don't need to do it every day.But every once in a while you better become those people. You have to understand their lives.

I got thrown out of band as a kid for getting up in the middle of a concert and playing Shotgun by Junior Walker.

I got into watching people when I coached little kids in soccer and noticed that the greatest moves that anyone could ever make were actually othersâ mistakes. A fake kick didnât happen because someone said, what would happen if we faked a kick?" Someone missed once, and saw the reaction. The greater the fake, the more real it looks, the more people act as if thatâs the way it actually happened.

No interview would be complete without asking you about your famous computer system. What's the latest?

It's alive! IT'S ALIVE!!! (laughs) That's the way I describe it. It's interesting. If we were to go back in time, I think weâve learned a lot of things along the way. While I don't regret that we've been through this, I regret what some of our customers have been through as a function of it.

So we went through this problem, where we had 1.5 million members when we made the conversion as opposed to the 100,000 members we had when we planned the conversion. It would've worked great if we had got it up and running in three to six months. We made some wrong decisions along the way because the technology kept changing so dramatically in terms of what was the right platform.

We also learned a lot about being real open with our audiences. There was always a dream that this would go smoothly and there was no need to alert people. We learned some real fast lessons, a lot of them by watching what America Online went through.

So the moment that we validated that things were not going swimmingly, there was a massive, up-front communication of what the problems were. We communicated to the best of our understanding to create the right expectation. I think some people felt we did not create the right expectation because we probably didn't communicate the worst scenario. We certainly didn't communicate the best scenario, but we didn't communicate the worst scenario.

I have a knack or passion for not paying attention. I'm usually not paying attention in a room or a meeting.

But we're through it with 99 percent retention rates because over the course of time we've built up a lot of good will. Now we have some rebuilding to do. And I think we're a better company because of it. Vince Lombardi once said that success is not measured by how quickly you rise but how quickly you rise after every fall.

You know, we have a lot of people at this company who came on board a fast-growing company and never felt pain. This experience woke up the next two or three levels of management at this company. It put fear in them about their futures, about their abilities and it made them better. And, to me, that is a massive win in the long run.

What do you see ahead for your future? What is there left for you to do?

To live up to the promise. First, to truly become one of America's greatest service operations. Second, to become a definitive database marketer, so that we really are doing great and providing a meaningful difference. Third, to be able to quantify that you will live a healthier life with us. No tag line -- hereâs the numbers.

Fourth, to create a scenario, an environment of ultimate choice, where doctors and hospitals are working in true partnership with us. Where they feel this is a wonderful company that is helping them run their business and build their business, that every Oxford patient is easier to treat and more profitable for them, as opposed to a scenario where we're the best of the bad guys, where we're a necessary evil.

We still have a long way to go. Weâve found the church now, we're working on the pew. Before I would say, we know what street we're on, and that was enough. But it's not enough anymore.
If thereâs one last piece of what we're trying to do here, it's the most important part of all, and that is we're inspiring people to have fun. That's the first question I ask: Are you having fun? Because I had a dream when we started this about the kind of company I would work for and the kind of people I would get to work with and the kind of enjoyment we would have.

The important thing for anyone who's in the marketing world to realize is, don't take yourself so seriously. And be bold! I try to tell people that. Make statements. Go out swinging.