Anthem Promises To Provide High-Quality Medical Care With New Program

Insurer Anthem Blue Cross is joining with several prominent Southern California hospitals to offer a new type of health coverage plan it promises will provide high-quality medical care at affordable prices.

The venture, to be called Vivity, brings together one of the nation’s largest health insurers with such providers as Cedars-Sinai Medical Center and the UCLA Health System. It was being formally announced Wednesday at a news conference in Los Angeles.

Meanwhile, the Los Angeles Times reported Wednesday that Vivity has already signed the California Public Employees’ Retirement System, the nation’s second-largest buyer of health insurance, as one of its first customers.

Vivity is expected to provide competition to Kaiser Permanente, the health maintenance organization currently favored by the largest number of California employers.

“We will have a price point similar to Kaiser or better,” said Barry Arbuckle, chief executive of MemorialCare, which runs Long Beach Memorial and five other area hospitals. “This is the next major step for managed care.”

The venture includes seven hospital systems in all, as well as the doctors, outpatient clinics, surgery centers and other facilities affiliated with Anthem. The insurer and the hospitals say they will share in whatever profits or losses their effort generates.

The announcement marks a major shift from the way the health care industry operates. Ordinarily, insurers assume the financial risks of providing health care when they take on customers. At the same time, they seek to make profits by pressing health care providers to accept substantially less for their services than they would bill a patient individually for.

By joining together, the hospitals and Anthem are also pitting themselves against Kaiser, the state’s largest nonprofit health insurer and a company with a well-established brand that already operates its own hospitals and has its own doctors.

“Our system is not just stitched together from existing parts,” said Peter Andrade, a Kaiser senior vice president, adding he expects it “will be difficult for others to copy.”

But if the venture can reduce rising medical costs it could provide a credible challenge, said Kirby Bosley, a senior vice president at Aon Hewitt, a benefits consultant to large employers.

“It remains to be seen. It’s not a slam dunk for Anthem,” Bosley said.

Insurance premiums for family health care coverage have risen 185 percent in California during the past 12 years. That’s more than five times the increase in the state’s inflation rate during that period.