Blue Shield CEO defends state contract
Bay Area and other regional leaders were critical of no-bid deal
As the national COVID-19 vaccination campaign ramped up in March, with increasing supplies allowing more people to become eligible for the shots, California tapped Oaklandbased health plan giant Blue Shield to oversee vaccine distribution statewide with the promise of streamlining the thousands of disparate efforts by counties, clinics and hospitals.
The move was met with a barrage of criticism. County officials in the Bay Area and Southern California who had spent months honing their local distribution systems balked at handing control over to the private health care provider.
As a result, many signed deals with the state that would allow them to continue running their own vaccination programs. Blue Shield’s no-bid deal, worth up to $15 million in reimbursements, also drew fire from critics who noted the company’s contributions to Gov. Gavin Newsom’s politi
cal campaigns and pet projects.
Last week, Blue Shield Chief Executive Officer Paul Markovich answered questions from this news group about the organization’s role. Questions and responses have been edited for brevity and clarity: Q People are getting their shots from many places — long-term care facilities, pharmacy chains, regional health care providers like Kaiser and Sutter, county health departments, community clinics, federally run mass vaccination sites like at Oakland Coliseum. Which of these does Blue Shield play a role in? A We’re in charge of the state’s network. It doesn’t include when the federal government allocates (doses directly to pharmacies, tribal nations, long-term care facilities and federally qualified health clinics). That is not within our scope. The federal government was doing the long-term care program and then stopped, so some of that came from the state. The Coliseum, that was FEMA, the federal government started to allocate directly, then ended up getting it from the state and we ended up being involved a bit.
Q
What is your response to county health officials who have argued that Blue Shield had no experience with the scope of work needed to oversee vaccination, provided no value to residents, and pushed people to use the state’s MyTurn appointment system that didn’t work very well?
A
We like to be very data-driven in these things, more objective in our conclusions about performance.
We signed up in our contract to perform in terms of improving equity, establishing a network of a certain level of capacity and reach. When we go down the list of what did we sign up to do and what did we do, we’ve achieved all of our goals at this point.
California when we started was lowly rated. We now have over 58% of Californians with at least one shot, California is now 10th among the 50 states. It’s improved a lot since we started.
Q
Did Blue Shield provide any benefit for the counties, including most in the Bay Area, that signed direct deals with the state for vaccine distribution rather than working with Blue Shield?
A
The vast majority of counties signed a memorandum of understanding with the state, but that understanding was really no different than the contract with Blue Shield. It wasn’t so much that it was a different working arrangement. It’s just that there were concerns from a number of health jurisdictions that their authority was embedded in state law and they felt uncomfortable giving up legally designated responsibility to a private entity. For us, it really didn’t matter as long as everyone committed to the work, which they ultimately did. Q You’ve said that although Blue Shield can be reimbursed for up to $15 million in costs under the contract, the company does not benefit financially. Can you explain? A We just made real clear the conditions.
We cannot profit from this, we’re just here to help. We don’t want to lose money. If I’m making this a donation, it becomes a story about another donation. I want it to cost us nothing and I want us to make nothing.
Second, I needed it to prohibit us from getting the data. I don’t want people to think we’re getting access to detailed patient information. All the ways people would perceive Blue Shield gaining an advantage, we constructed a contract that would preclude that. Show me how it is we could benefit as an organization from doing this. I don’t think you could describe the coverage of this as being highly complimentary of Blue Shield.
We deliberately made it time-bound. This is not something we’re going to be doing forever, we’re here to help in a focused time period. Q You have said equity — improving vaccine distribution among the poor — is a top priority, but state data still indicate vaccination remains significantly skewed toward wealthier communities. Has Blue Shield made progress on this? A When we started, there was about 15% of vaccine administered in targeted equity communities. We got it up to
25%. It’s fallen to 20-21% in the last couple of weeks, but that’s due to the lower age of eligibility for shots and more vaccine running through pharmacies — they don’t do as well on equity scores. … But (the rates in those communities are) still materially higher, and we expect those to grow in coming weeks.
Q
The vaccination campaign today is in a much different place than it was back in March, with the supply of shots exceeding demand. Is there still a role for Blue Shield?
A
It hasn’t run its course yet, but it will certainly run its course. This (demand) slowdown is not consistent by geography, or by provider. There’s still value in us doing two things: getting doses to places where they can be used, where there is demand, and supporting the state in what I’d call microtargeting, reaching out through mobile strategies, alternative health strategies. Even that won’t last forever. We’re getting toward the last phase of this where our effort is really going to be valuable.