Blue Shield of California Collaboration

From inception, CHCC has recognized that we must focus our purchasing power on the problems of high prices and provider-driven overuse, misuse and under-use of health care services. While our membership currently represents over 3 million Californians, even this leverage is insufficient to bring all of the major health plans into alignment with CHCC’s values and goals. CHCC therefore decided to seek one commercial health plan willing to work fully as a partner in the development of HMO and PPO networks that are higher quality, more transparent, and more cost-effective.

This decision led to a year-long process in which CHCC developed its health plan partnership criteria and met with four of the major commercial health plans – Blue Shield of California, Blue Cross of California, Health Net and PacifiCare – to discuss a new way of doing business that would involve CHCC as an equal partner in efforts to monitor provider performance, assure and improve quality, and stabilize costs.

CHCC selected Blue Shield to reinvent the conventional health plan-purchaser relationship in partnership with CHCC. In July 2007, CHCC and Blue Shield signed a Memorandum of Understanding (MOU) unique in California. We have agreed jointly to improve health care quality and affordability through a unique purchaser-payer collaboration to develop high quality, more cost efficient networks.

CHCC’s rationale for selecting Blue Shield of California as a partner in HMO and PPO network development is grounded in a broader critique of health plans as ineffective intermediaries in assuring quality and stabilizing costs. As purchasers, our financial connection to hospitals and medical groups has mostly been through health plans and insurance carriers that market their products to us without addressing the widespread overuse, under-use and misuse of health care services that may also be over-priced and inefficiently delivered. The high cost of delivery system failures is passed onto us year after year, with little system accountability.

CHCC’s goal is to correct this state of affairs by forming a unique collaboration with the one major payer, Blue Shield of California. We selected Blue Shield because it agreed to work with us as a partner, not a customer, in building HMO and PPO networks that meet purchaser expectations for safe, effective, efficient, patient-centered, and fairly priced care. Blue Shield will also provide access to wellness and other prevention and care management programs that improve health and help to reduce costs. CHCC member organizations will be able to decide if, when and how to offer these HMO and PPO networks to their own plan beneficiaries.

The partnership joins CHCC and Blue Shield in:

• Provider performance monitoring and evaluation;

• Measurement and ongoing monitoring of member health status;

• Discussion of provider contracting strategies;

• Joint or coordinated communications to help members choose best hospitals and doctors for their specific conditions;

CHCC does not and will never receive money from Blue Shield for this partnership. Our endorsement was not and is not for sale. We are almost wholly financed through membership dues and program service fees because our members see the value of building an independent vehicle for constructive purchaser influence in the health care marketplace.

Our goal in the development of this, and other, collaborations is to hold California’s health care system, as well as our Blue Shield of California partner, accountable for care that is safe, appropriate, effective, efficient, fairly priced, and available to all Californians without regard to race, gender, socioeconomic status, and geography.

For more information about the CHCC-Blue Shield collaboration, including the development of higher quality, more cost effective HMO and PPO networks for purchaser consideration, please contact us.

Watch this web site for updates on the CHCC-Blue Shield partnership. The best is yet to come.