Anthem Blue Cross, 7 hospital systems form managed care plan in California

An historic alliance between Anthem Blue Cross and seven health systems has formed a new managed care plan aimed at employers in Southern California—and the nation’s second largest healthcare buyer has signed on as the first customer.

In January 2015, the California Public Employees’ Retirement System (CALPERS) will begin offering its members the plan, which includes seven rival health systems in Southern California, including Cedars Sinai Medical Center and UCLA Health, all of which will share in profits and losses. CALPERS insures 1.4 million public employees and their families.

The New York Times reports that the plan, called Anthem Vivety, is believed to be the first to be offered by disparate hospital systems that are not owned by the plan itself. “It is really a brand spanking new thing,” Ann Boynton, a benefits executive for the CALPERS, told the NYT. “It’s such a completely different way to come at the problem.”

Anthem Vivety takes square aim at Kaiser Permanente, which has an estimated 40% of the California insurance market. “We will have a price point similar to Kaiser or better,” Barry Arbuckle, chief executive of MemorialCare, which runs six hospitals, including the flagship Long Beach Memorial, told the Los Angeles Times. “This is the next major step for managed care.”

Nonetheless, Kaiser Permanente is a formidable competitor with decades of experience in population health management. “Kaiser is a brutally tough competitor with a tremendous brand,” Steve Valentine, president, Camden Group, El Segundo, told the LA Times. “Anthem is stringing together a bunch of hospital brands with good reputations and strong facilities. But we don’t know if it will really save any money or if the public will like it.”

The LA Times also reports that Anthem Vivety will cost about 10% less than the typical plan offered by Anthem to state employers.

The seven allied hospital organizations are: Cedars-Sinai Medical Center in Los Angeles; Good Samaritan Hospital in Los Angeles; Huntington Memorial Hospital in Pasadena; MemorialCare Health System in Orange County; PIH Health in Whittier; Torrance Memorial Health; and UCLA Health.

The new Anthem health maintenance organization also will encompass the affiliated physician offices, imaging centers, surgery centers, clinics and other outpatient facilities of the allied hospital systems.