Blue Shield of California is a health plan provider founded in 1939 and based in Oakland, California. The organization serves over 4 million health plan members and nearly 65,000 physicians across the state. Blue Shield of California was founded by the California Medical Association. Founded as a not-for-profit, Blue Shield of California was stripped of its tax-exempt status by the California Franchise Tax Board in 2014.
History
Blue Shield of California, then known as California Physicians' Service, was created by the California Medical Association on December 18, 1938, and was incorporated on August 9, 1939. The organization began offering coverage on March 6 of that same year. In 1946, the organization was among a founder of the National Association of Blue Shield Plans, which later became the Blue Cross and Blue Shield Association. Today, Blue Shield of California is an independent licensee of the national association. The Blue Shield of California health plan was the first in the nation to offer catastrophic coverage in 1950, provide coverage for a heart transplant in 1984, offer online benefit and enrollment information in 1996, and offer an online enrollment system for agents in 1998. In 2006, the National Committee for Quality Assurance, commonly referred to as NCQA, recently recognized Blue Shield as an "excellent" health plan for service and clinical quality. The Blue Cross of California, which traditionally covered the hospital portion of insurance, was a separate entity which went public in 1992 under the name Wellpoint, with the name later changing to Anthem. In 2010, Blue Shield of California, Dignity Health, and Hill Physicians Medical Group formed an Accountable Care Organization that covers 41,000 individuals in the California Public Employees Retirement System. During its first 2 years, this program reduced inpatient use and health care costs significantly. In 2014, Blue Shield of California lost its exemption from California state corporate income tax but did not officially announce this information to the public until March 2015. A claimed recent application of the duck test was the denial of tax-exempt "nonprofit" status to Blue Shield of California. In 2015, Blue Shield entered the Medicaid market by acquiring Care1st Health Plan. Blue Shield sold Care1st Arizona to WellCare in 2017. Care1st California was renamed Blue Shield of California Promise Health Plan in 2019.
Programs
Health Reimagined Initiative
It is an ambitious, systematic initiative to expand access to quality health care while making it more accessible. The program uses the latest advances and technology, as well as partnerships with medical professionals, employers, community leaders and others to improve the patients, families, and neighborhoods healthcare system.
Community outreach
Blue Shield has donated more than $500 million to Blue Shield of California Foundation since 2002, including $39 million in 2017
The Foundation awarded $25 million in grants in 2017 to advance the well-being of all Californians, particularly our state's most vulnerable populations.
Employees volunteered 26,000 hours in 2017.
Employees donated $474,000 to charities in 2017, with matching gifts by Blue Shield.
Diversity & inclusion
84% of Blue Shield of California's 6,800 employees rated the company a great place to work in 2017.
Blue Shield was named as a Top Regional Company by Diversity Inc. in 2017
Blue Shield of California was recognized in 2017 as a 2020 Women on Boards Winning 'W' Company for championing board diversity
Network
Blue Shield of California's provider network currently includes 58,000 physicians and more than 340 hospitals statewide. Blue Shield established 42 accountable care organization partnerships across the state. Since 2010, Blue Shield's ACO program has:
Cut the number of days patients stay in the hospital by 16%
Reduced hospital re-admissions by 13%
Reduced their patient care expenditure by $480 million
Other examples of Blue Shield's efforts to transform health care include:
Investing $30 million in a multi-year collaboration with the California Medical Association to develop and support a new health care model that will bring health care into the digital age, tie pay to value and create a patient-centered experience through home- and community-based services.
Collaborating with Manifest MedEx, one of the nation's largest nonprofit health information exchanges, to advance secure health information sharing between providers, plans and ultimately consumers.
Providing home-based palliative care and 24/7 support to select members with serious illness in all 58 counties in California - the only health plan in the state to offer this service.
Offering 24/7 house calls for chronically ill patients who have at least 6 of 13 debilitating illnesses, through a collaboration with Landmark, which delivers home-based medical and behavioral care and social support services.
Financial
2% Pledge: Blue Shield voluntarily caps its net income at 2% of revenue, with approval from the board of directors. More than $596 million has been returned to customers and the community a result of the pledge. Blue Shield of California was recognized as one of 2018 World's Most Ethical Companies® by the Ethisphere Institute – the sixth time to have received the honor. Financial Performance:
$20.6 Billion in revenue in 2018
$413 Million net income in 2018
A+ rating from Fitch Ratings for Blue Shield of California
A rating from AM Best for California Physicians' Service
A+ rating by Weiss Ratings for California Physicians' Service
In 2015, Blue Shield of California was stripped of its state tax exempt status following "a lengthy state audit that looked at the justification for Blue Shield's taxpayer subsidy." Such a finding indicates that the organization failed to act for the public good as required for exempt status. The organization holds billions in cash reserves, spends millions in executive pay, and provides no services for Medi-Cal recipients. The organization defends its non-profit status, but has failed to provide sufficient evidence that its actions align with such obligations.
Quality of care
In the California Healthcare Quality Report Card 2009 Edition, Blue Shield of California received 3 out of 4 stars in Meeting National Standards of Care and 2 out of 4 stars in How Members Rate Their HMO.
Controversy
In 2006, Blue Shield agreed to a $6.5 million settlement relating to allegedly modifying the risk tier structure of its individual and family health care plans. In 2008, the organization settled for $3 million with the California Department of Managed Health Care to resolve allegations of improper rescission of individual health plan coverage. Further, the organization reinstated coverage to 450 members whose plans had been cancelled and agreed to provide compensation for any medical debts incurred by these policyholders due to the rescission.
