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Why is it more difficult to offer affordable health insurances in Santa Monica ? Illustrated by the negotiation between UCLA and Blue Shield of California

Currently we have a big negotiation fight between UCLA and Blue Shield, and this fight illustrates clearly why it is getting more difficult to receive affordable health insurance in Santa Monica. Yesterday Blue Shield sent to all the producers this very important clarification about the negotiation between UCLA and Blue Shield.

What’s at stake in this negotiation
“Blue Shield is a not-for-profit health plan, with a mission to ensure all Californians have access to health care that is high-quality and affordable. Our focus on quality and affordability is reflected in our network negotiations, but UCLA is making contract demands that would unjustifiably drive up costs for our members.

To demonstrate our commitment to affordability, this year we pledged to limit our annual net income to 2% of revenue. In comparison, according to data from the University of California website, the profit margin (net income) from the two UCLA hospitals is 15%, which is nearly four times the state average for hospitals, and almost eight times Blue Shield’s 2% cap.

UCLA is currently demanding that Blue Shield enter into a new six-month contract for both their hospitals and medical groups. At the end of that contract, UCLA has made the decision to band together with four other University of California hospitals and negotiate as a group, even though they are independent from each other. This tactic would give UCLA an overwhelming negotiating advantage, allowing it and the other four UC hospitals to drastically increase their charges and make care less affordable for our members. We cannot support this contracting strategy to increase UC’s reimbursement rates at the expense of our members. We are refusing to accept UCLA’s demands – and are calling on them to do their part to keep care affordable.

UCLA is one of the highest paid Blue Shield network providers in Southern California. Under our current contract, Blue Shield already pays UCLA for inpatient hospital care at rates 41% higher than our Southern California average and approximately three times what Medicare pays.Under its current Blue Shield contract, UCLA enjoys a 35% profit margin. Its rates have increased 98% since mid 2006.

We hope that UCLA will reconsider its position and that we can reach an agreement with them.”

I hope that this interesting message of Blue Shield illustrates that not only health insurance companies are for profit but also that hospitals like UCLA, who have at the West Side of Los Angeles a power position, and  think more about profit than the greater good of caring for the community.

Being affected by Blue Shield’s decision, let us help you to find affordable health insurance in Santa Monica.

 


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