BSC Archives - Recon Strategy

Provider incentives in the commercial ACO: retaining a small share of savings in return for future volme growth

Tory Wolff August 24, 2011

Earlier this month, Blue Shield of California announced 2010 results from an ACO partnership with the Catholic Healthcare West hospital system and Hill Physicians. The ACO achieved savings of $20M on a CalPERS population of 41.5K commercial and Medicare lives (where Blue Shield was the secondary payer) — $480 per person or 13% of sponsor costs (average sponsor premium contribution estimated at $3,735 based on press report that $15.5M equaled to 10% of premiums). These results appear to be significantly better than the results of the Medicare Physician Group Practice

Blue Shield of California’s unilateral profit cap: competitive gambit or PR move?

Tory Wolff June 9, 2011

Summary: Blue Shield of California (BSC) has committed to keeping profits at 2% of revenues or less (and returning any excess). The commitment is economically meaningful: $180M of 2010 revenues will be returned; just a few years ago, BSC made 4.9% net income and, under its promise, would have had to return 2.9% of revenues. However, given BSC’s very large reserves, it has plenty of capital to fund investments or, if necessary, absorb losses. While the PR aspects of the move are interesting, it seems unlikely that this is an

Tag: BSC

Recon takes an analytical look behind select developments in healthcare

Provider incentives in the commercial ACO: retaining a small share of savings in return for future volme growth

Blue Shield of California’s unilateral profit cap: competitive gambit or PR move?

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