After 12 years with Blue Shield of California, I resigned last week as Director of Public Policy. I’d raised concerns internally that Blue Shield wasn’t doing nearly enough to meet its duties to the public as a tax-exempt nonprofit, but senior management dismissed them.
If this were an internal corporate matter, I wouldn’t be speaking out publicly now. But Blue Shield doesn’t belong to investors or its managers; it belongs to the public. If it’s not benefiting them, that’s a public issue. And with so little difference between the way Blue Shield and for-profit insurers operate, it seems clear that it is not focused on serving the public’s interests.
This isn’t to say that Blue Shield does nothing of benefit for the public. Within the health insurance industry, Blue Shield has long been a leading advocate of health care reform. In addition, the Blue Shield of California Foundation, which distributes about $35 million a year to community clinics, domestic violence shelters, and support for healthcare reform implementation, does real good. But these benefits are a paltry return (less than 1%) on a public asset, which is what Blue Shield is, that is worth perhaps as much as $10 billion.
Given how little Blue Shield does for the public, those assets would far better serve Californians if they were instead invested in the state’s healthcare safety net. And such a choice does exist. As I explain elsewhere on this site, Blue Shield’s assets could be transferred to the public and the company operated instead with financial backing from investors.
With millions of Californians failing to get the care they need because healthcare programs for low-income Californians are so badly underfunded, those billions could make a big difference for a lot of people. It won’t be easy getting Blue Shield to do the right thing, but that’s a goal worth fighting for.