PNHP

Blue Shield's contract dispute with University of California hospitals

Blue Shield, UCLA end long health insurance dispute

By Chad Terhune
Los Angeles Times, August 10, 2012

Nonprofit insurer Blue Shield of California said it resolved a lengthy contract dispute with UCLA and other UC system hospitals over reimbursements for patient care.

The previous contract expired Dec. 31 as the two sides bickered over rising medical costs. These disputes have become more common across the country as some insurers try to rein in healthcare costs and major hospitals exert their market power to maintain adequate reimbursements.

Contract talks broke down between UCLA and Blue Shield in 2006 and 2008 as well.

http://www.latimes.com/business/money/la-fi-mo-ucla-blue-shield-20120810,0,3160712.story

And…

Blue Shield top executives’ pay changed little in 2011

By Chad Terhune
Los Angeles Times, August 11, 2012

Nonprofit insurer Blue Shield of California said its outgoing chief executive earned $4.6 million last year, off slightly from a year earlier, as all insurance companies faced new government rules on how customer premiums are spent.

The San Francisco company declined to comment on the value of Bodaken’s retirement pay and benefits or to reveal the pay package of his successor. Paul Markovich, chief operating officer, will take over as CEO Jan. 1.

http://www.latimes.com/business/la-fi-0811-health-insure-pay-20120811,0,1114038.story

Comment: 

By Don McCanne, MD

We should be able to agree that a health care financing system should be designed to optimally serve the health care needs of the patient. Under the private insurance model of health care financing, there should be no better example as to how that might work than non-profit Blue Shield of California’s coverage of care at the public University of California academic medical centers. Surely, a large non-profit traditional insurer and a system of public university health centers would collaborate to serve patients first.

California’s Blue Cross set the stage. It converted to a for-profit corporation, and then engaged in practices to improve investor return. An important part of their strategy was to impose contract restrictions on both patients and providers. To remain competitive, Blue Shield adopted the same strategies, blurring the distinction between the for-profit and non-profit Blues in California.

There are clinical situations in which the most appropriate care would be provided at one of California’s prestigious university medical centers. A health care financing system that was designed in the patients’ best interests would ensure access to these centers when appropriate. But that is not what happened in this instance when disputes arose over contract terms on the provider side. Though there was no dispute on the patient side of the contracts, Blue Shield patients nevertheless were potentially exposed to severe financial penalties should they access care at the university centers.

So this is what we get with the best in private insurance financing – contract disputes that are disruptive to patient care. If a single payer system – an improved Medicare – were our only program, spending would be priced right, based on global budgets and negotiated rates. Patients would no longer be restricted to contracted networks imposed on them by private insurers. Instead, patients would consult with health care professionals of their own choice and would receive care in facilities that best served their own medical needs, rather than in facilities that best complied with the business plans of private insurers.

Why do we keep paying private insurers for their expensive administrative services that they use to impede our access to care? That’s not very smart.

Blue Shield's contract dispute with University of California hospitals

Blue Shield, UCLA end long health insurance dispute

By Chad Terhune
Los Angeles Times, August 10, 2012
Nonprofit insurer Blue Shield of California said it resolved a lengthy contract dispute with UCLA and other UC system hospitals over reimbursements for patient care.
The previous contract expired Dec. 31 as the two sides bickered over rising medical costs. These disputes have become more common across the country as some insurers try to rein in healthcare costs and major hospitals exert their market power to maintain adequate reimbursements.
Contract talks broke down between UCLA and Blue Shield in 2006 and 2008 as well.
http://www.latimes.com/business/money/la-fi-mo-ucla-blue-shield-20120810,0,3160712.story

And…

Blue Shield top executives’ pay changed little in 2011

By Chad Terhune
Los Angeles Times, August 11, 2012
Nonprofit insurer Blue Shield of California said its outgoing chief executive earned $4.6 million last year, off slightly from a year earlier, as all insurance companies faced new government rules on how customer premiums are spent.
The San Francisco company declined to comment on the value of Bodaken’s retirement pay and benefits or to reveal the pay package of his successor. Paul Markovich, chief operating officer, will take over as CEO Jan. 1.
http://www.latimes.com/business/la-fi-0811-health-insure-pay-20120811,0,1114038.story

We should be able to agree that a health care financing system should be designed to optimally serve the health care needs of the patient. Under the private insurance model of health care financing, there should be no better example as to how that might work than non-profit Blue Shield of California’s coverage of care at the public University of California academic medical centers. Surely, a large non-profit traditional insurer and a system of public university health centers would collaborate to serve patients first.
California’s Blue Cross set the stage. It converted to a for-profit corporation, and then engaged in practices to improve investor return. An important part of their strategy was to impose contract restrictions on both patients and providers. To remain competitive, Blue Shield adopted the same strategies, blurring the distinction between the for-profit and non-profit Blues in California.
There are clinical situations in which the most appropriate care would be provided at one of California’s prestigious university medical centers. A health care financing system that was designed in the patients’ best interests would ensure access to these centers when appropriate. But that is not what happened in this instance when disputes arose over contract terms on the provider side. Though there was no dispute on the patient side of the contracts, Blue Shield patients nevertheless were potentially exposed to severe financial penalties should they access care at the university centers.
So this is what we get with the best in private insurance financing – contract disputes that are disruptive to patient care. If a single payer system – an improved Medicare – were our only program, spending would be priced right, based on global budgets and negotiated rates. Patients would no longer be restricted to contracted networks imposed on them by private insurers. Instead, patients would consult with health care professionals of their own choice and would receive care in facilities that best served their own medical needs, rather than in facilities that best complied with the business plans of private insurers.
Why do we keep paying private insurers for their expensive administrative services that they use to impede our access to care? That’s not very smart.