e-News Roundup – June 9, 2011
Blue Shield of California Pledges to Limit its Net Income
This week, Blue Shield of California announced that it will limit its annual net income to no more than 2% of revenue. The company’s CEO stated that the commitment “is rooted in [its] longstanding commitment to universal coverage” and the belief that healthcare reform, alone, is not enough. “This commitment doesn’t solve the affordability problem, but it does represent a paradigm shift for a health plan.” [Press Release of Blue Shield of California (June 7, 2011)]. The commitment will be applied retroactively to 2010 and will amount to $180 million. The money will be distributed three ways; premium credits to members; funding hospitals and physicians groups to participate in accountable care organizations; and, funding local non-profits that provide healthcare to low income residents. Blue Shield of California is an independent member of the Blue Cross Blue Shield Association a not-for-profit health plan with 3.3 million members.
Mary O’Dowd Sworn in as New Jersey Health & Senior Services Commissioner
On June 9, Mary O’Dowd took the oath of office as the new NJ DHSS Commissioner, replacing Poonam Alaigh, MD, who left office earlier this year. Prior to her appointment by Governor Chris Christie, Commissioner O’Dowd served as Deputy Commissioner and chief of staff. She has been part of the department for more than three years. Read more.
MSNJ Joins the Fray over CMS’ Proposed ACO Rule
This week, MSNJ joined the chorus of organized medicine against CMS’s proposed rule on a Medicare shared savings plan under Medicare, better known as the accountable care organization (ACO) rule. MSNJ filed comments that focused on the fundamental payment risk shift (downside financial loss), rather than shared savings, and the significant start-up costs that effectively preclude solo and small practices from participation. We expressed concern that the savings would not be achievable under the proposal. Notably, even those entities with significant experience in coordinated care agree. For example, while the Cleveland Clinic generally supports the concept of ACOs, it objected to the proposal concluding “that the shared savings component is structured in such a way that creates real uncertainty about whether applicants will be able to achieve success.” Read Cleveland Clinic’s comments and the Health Affairs blog on accountable care organizations.
Read a Kaiser Health News op-ed by the Director of Health Policy Studies at the Cato Institute.
There is also concern that the FTC & DOJ’s proposed antitrust enforcement policy with respect to ACOs will not be adequate legal protection and will deter ACO participation. Read AMA’s comments; MSNJ’s comments; and those of the American Hospital Association.