‘Green Shield’ Is More Appropriate
As autumn moves toward winter and the holiday season, people often gussy up their appearances and homes, shifting to more merry palettes.
Blue Shield of California has had that same sort of medium blue as its primary palette since it began doing business in the 1930s. I think it's high time it also made a color switch – to a nice, bright kelly green and change its name to Green Shield as well. Not only would it be more jolly, it would make a lot more symbolic sense.
Because, really, how else do you illustrate why the San Francisco-based health insurer wriggled its way out of one of the primary conditions for its $2.1 billion purchase of Medi-Cal insurer Care1st Health Plan? In striking a deal with the Department of Managed Health Care to approve the purchase last month, Blue Shield agreed to pay $140 million to a variety of charitable organizations over the next decade.
But as my colleague Chad Terhune at the Los Angeles Times reported earlier this week, Blue Shield simply decided that the sum would be deducted from the $35 million it currently gives to charitable foundations annually. It's the sort of bookkeeping maneuver that almost makes the brash studio accounting that occurs in the movie industry seem amateurish.
Blue Shield already has surpluses of about $4 billion on hand -- far, far more than it's legally required to keep in reserve. So, if you're going to thumb your nose at regulators and stiff charities to keep your hands on a measly 3.5% percent of that loot, Green Shield seems a much more appropriate name.
That has also has some marketing potential – the insurer could use the lulling Renaissance tune “Greensleeves” to try and soften its image. Then again, since Henry the VIII is often credited with writing that song, maybe that's not such a good idea.
It would at least put Blue/Green Shield in familiar territory, as it has had a lot of recent brushes with head-lopping. Such as last year, when it lost its nearly 80-year-old tax exemption in California after the Franchise Tax Board decided it operated more like a for-profit organization.
Or more recently, when DMHC Director Shelley Rouillard decided to fine both Blue Shield and Anthem Blue Cross for publishing faulty provider directories for its enrollees. Blue Shield got smacked with a $350,000 penalty versus the $250,000 levied against Anthem because it was apparently a tad peevish during the disclosure and negotiation process.
Believe me, when you come off seeming as if you merit more punishment than corporate behemoth Anthem, that's quite an achievement.
Sadly, Rouillard decided to sheathe her blade over the charitable contributions that suddenly went south. She claimed that the agreement was worded to have been interpreted in other ways. Or in other words, that probably means the deal would have fallen apart if she didn't accommodate that escape hatch.
Blue/Green Shield is structured as a mutual benefit corporation, which has allowed it to avoid filing 990 tax forms, again shielding from public view how it spends its money or pays its executives. The original intent of that structure was to benefit the corporation's actual membership.
It would be a wonderful early Christmas gift if Blue/Green Shield decided to distribute, say, $3 billion to its enrollees as a mutual benefit. After all, those years of systemic double-digit premium increases must have left them a bit shell-shocked.
Of course, if Blue/Green Shield did that it wouldn't live up to its new name and palette, so that won't happen.
I guess I keep hoping for “A Christmas Carol. “ It looks like I’m going to have to settle for “It's A Wonderful Life.”
At least I know where to find a dead ringer for Lionel Barrymore.
Ron Shinkman is the Publisher of Payers & Providers.
