Blue Shield of California Announces Help for Independent Doctors-A Warning

An article today in Modern Healthcare announced that Blue Shield of California is launching a new program to help physician practices remain independent while giving them tools needed to succeed in value-based care arrangements (1). The program touts that it will offer independent doctors and practices tools to improve patient health outcomes while making it easier for them to focus on care instead of administrative tasks.

Blue Shield said it plans to support physicians in moving toward value-based care by investing in their practices. Investments could range from different types of affiliations to even employing the doctors in select situations. The announcement points out that independent physicians appear to be a dying breed. Furthermore, when independent physicians join an integrated healthcare system, costs increase (2).

On the surface this announcement sounds positive but the article raises a number of concerns. First, Blue Shield California is a for-profit company which had its not-for-profit status revoked by the state of California in 2014. Blue Shield California has also been known for being less than forthcoming with details regarding their business. Second, it is unclear what type of access Blue Shield plans to gain to physicians’ practices and patient files. Third, in many instances, quality measures have been nothing more than a series of meaningless metrics whose performance have not benefited patients. However, performance of these metrics has benefited healthcare executives’ bonuses.  Blue Cross and Blue Shield pays bonuses which on average are greater than 65% of the executive’s base salary. 20-25% of the bonuses are dependent on “quality” as defined by Blue Shield.

As with any dealings with insurance companies or integrated healthcare systems, physicians should be wary. What is the cost to patients and physicians? Will the company be charging for software installation and maintenance? What role will the insurance company have in determining value measures and what access will they have to patient data? Will any contractual agreement be easily canceled or will it be prolonged with the physician paying for the installation and use of any software? Will there be a noncompete clause forcing physicians to move if they decide to leave the agreement? These and other questions need to be addressed prior to any physicians signing on this or any similar agreements. Physicians considering any agreement or contract are encouraged to have them reviewed by lawyers familiar with healthcare to determine the potential pitfalls.

Richard A. Robbins, MD

Editor, SWJPCC

References

1. Livingston S.  Blue Shield of Calif. aims to help independent doctors with value-based care. Modern Healthcare. August 29, 2019. Available at: https://www.modernhealthcare.com/payment/blue-shield-calif-aims-help-independent-doctors-value-based-care (accessed 8/29/19).
2. Baker LC, Bundorf MK, Kessler DP. Vertical integration: hospital ownership of physician practices is associated with higher prices and spending. Health Aff (Millwood). 2014 May;33(5):756-63. [CrossRef] [PubMed]
3. Blue Shield of California. 2017 executive compensation summary. Available at: file:///C:/Users/Rick/Downloads/2017-Executive-Compensation-Summary-Final%20(1).pdf (accessed 8/29/19).

Cite as: Robbins RA. Blue Shield of California announces help for independent doctors-a warning. Southwest J Pulm Crit Care. 2019;19(2):85-6. doi: https://doi.org/10.13175/swjpcc058-19 PDF