Head-scratching over Newsom’s choice of Blue Shield to lead the vaccination surge


This story also ran on Chico Enterprise Record. It can be republished for free.

[UPDATED at 7:45 p.m. ET]

California Governor Gavin Newsom, who sought to save a once bright political future tarnished by his abuse of the Covid crisis, hired California nonprofit health insurer Blue Shield to distribute the state’s Covid vaccine last week.

The company has said little so far about how it plans to reorganize a gigantic and complicated vaccination campaign that has confused and frustrated public health officials and vaccine seekers alike.

The agreement with Blue Shield was made as part of an emergency approval in order to circumvent the usual tendering process. Kaiser Permanente, California’s largest health plan, will also assist with efforts under an emergency contract. (KHN is not affiliated with Kaiser Permanente.)

Blue Shield’s job will be to build and manage a network of vendors to distribute and manage vaccines in numerous locations across the state, including mobile clinics, key vaccination sites, and homes of at-risk residents. Blue Shield will also develop a system of financial incentives to encourage providers to use their vaccine supplies faster, with a special focus on those disproportionately affected by the pandemic. A real-time data aggregation and reporting system will also be created.

In addition to vaccinating its 9 million members, Kaiser Permanente will establish and monitor at least two vaccination centers, in addition to other unspecified measures, to vaccinate underserved communities.

Newsom hopes that replacing the patchwork of county-to-county efforts with a centralized system will accelerate the pace of vaccinations.

The introduction of the vaccine has been plagued by early stumbling blocks, including confusing scheduling systems. Postponing the rules for vaccine eligibility; long lines that kept the elderly waiting for hours, causing some to give up their search and go home unvaccinated; and inaccurate data collection that made it impossible for state officials to tell whether Newsom had achieved its goal of delivering 1 million doses in 10 days.

Some health professionals cautiously welcomed the new plan, saying Blue Shield could help make the company, which vaccinates nearly 40 million California residents, more structured and efficient.

Blue Shield is the third largest health insurer in California after Kaiser Permanente and Anthem Blue Cross. It contracts with a large number of hospitals, medical groups, pharmacies, and other providers across the state. Newsom relies on the insurer’s extensive network of relationships to get vaccines out faster and more effectively.

Because Blue Shield “has an organization with a statewide presence and knowledge of geography and population, it seems they can think through all of the planning and logistics,” said Glenn Melnick, professor of health economics at the University of Southern California Price School’s Sol of Public Policy.

A coalition of skeptical groups representing county and regional health officials warned Newsom on Friday that its plan “threatens to overshadow our members’ core public health skills and roles”. Some health experts suggested that the decision to launch Blue Shield was related to the insurer’s history as a major Newsom donor.

Here are answers to five key questions about Blue Shield’s participation in the Covid vaccination program:

1. Is Blue Shield up to the task?

We will see. Despite his experience and influence in the healthcare industry, Blue Shield has never tried anything on this scale – with so much driving and so much eye viewing.

Skeptics note that Blue Shield’s track record of providing health care services to its participants has not always been outstanding. The introduction of the Affordable Care Act’s health plans in 2014 was flawed and fined by regulators for improper cancellation of coverage and violations of consumer complaints, among other things. In 2015, it lost its state tax-exempt status after a controversy over large premium increases and its high financial reserves.

In 2019, the last year for which data is available, Blue Shield had the second highest rate of consumer complaints among the nine largest California health plans regulated by the State Department of Managed Health Care, after UnitedHealthcare. In the assessments of the National Committee for Quality Assurance’s 2019-20 Health Plan, the lowest possible score for access to care was achieved.

2. Was Newsom’s decision politically motivated?

It’s hard to say for sure without a fly on the wall, but Blue Shield has very good relations with the governor.

According to filings with the California State Department, approximately $ 1 million was allocated in support of Newsom’s 2018 gubernatorial offer. Last year, the company contributed an additional $ 31,000 to Newsom’s 2022 campaign for the governor and $ 269,000 to its campaign committee.

“The reality, I think, is that it reflects the close relationship Blue Shield has built with Newsom, not its skills,” said Michael Johnson, a former Blue Shield executive who left the company in 2015 and is now one is its fiercest critic.

In addition, Blue Shield CEO Paul Markovich co-chaired the Newsom Task Force on Covid Testing from March to June last year. This experience has been cited by some health professionals as an asset in the insurer’s new role.

Another possible factor in the governor’s decision to mess things up is his political need to turn things around quickly to remind him that he has gained momentum from the vaccination chaos.

3. Is Blue Shield well positioned to achieve the equitable distribution of vaccines to underserved communities that Newsom has referred to as the “north star” of the new centralized system?

These communities are not a core part of Blue Shield. It has a low presence in Medi-Cal, the government-funded insurance program for low-income people – and only in Los Angeles and San Diego counties. However, there are relationships with numerous hospitals and other providers who care for Medi-Cal patients. It must also work with the counties of the state.

“It is important that Blue Shield work hand in hand with local health authorities to reach vulnerable populations who do not have equal access to traditional health care,” said Sara Bosse, director of the Madera County Department of Health.

4. What could have motivated Blue Shield to take on such a tedious task?

Payment by the state is at cost, so there is no obvious profit motive. Although Blue Shield could, in theory, use its vaccine decision-making power to the advantage of its own business, health experts doubt it would act so cynically.

“Our goal is to do everything we can to help overcome this pandemic and it is our obligation to do this work at cost without benefiting from the state,” Blue Shield said in a press release on Friday.

Melnick said he is not aware of any other health plan in the country that has stepped in to help officials with tests or vaccinations. If Blue Shield is successful, “it could answer many states and put pressure on other plans to step up,” he said. For the same reason, if the vaccine shortage persists, Blue Shield is likely to take the blame.

Johnson, the former CEO of Blue Shield, suggested a motive other than sheer selflessness. “I think the greatest value to Blue Shield is prestige,” he said. “It means Blue Shield has the ability and integrity to be entrusted with something that is so important to tens of millions of people.”

5. How are Blue Shield results measured?

It shouldn’t be too difficult to determine if the insurer is achieving two key government-set goals: accelerating the pace of vaccinations and focusing specifically on underserved communities. Both can be measured.

The bar for success is pretty low, Johnson said. “It was managed so disastrously,” he said, “that it would not be difficult for Blue Shield to improve the state’s performance so far and come out of it as if it had done a good job.”

California Healthline’s political correspondent Samantha Young and KHN correspondent Anna Almendrala contributed to this report.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation that is not affiliated with Kaiser Permanente.

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