What Does Being a Not-for-Profit Mean to Us?

Operationally, it means we don’t answer to Wall Street – we don't need to generate returns to shareholders. Philosophically, being a not-for-profit means we’re guided by our mission to ensure all Californians have access to high-quality health care at an affordable price.

As a long-standing supporter and early proponent of universal coverage, we are committed to the success of health reform, which will only be achieved if health care is made more affordable. In 2011, we took a tangible step towards this by pledging to limit our net income to 2 percent of revenue. If we earn more than 2 percent net income in any year, we’ll give back the difference to our customers and the community.*

Based on 2010 and 2011 net income, we returned $475 million to our customers and the community. This is just one step in a long series of steps to reduce the overall cost of health care. Read more about our pledge.

We are leading the way in the delivery of affordable coverage and access to quality care by:

  • Collaborating with hospitals, physician groups and customers to set up accountable care organizations (ACO) aimed at delivering more integrated, cost-efficient care. Blue Shield currently participates in seven ACOs throughout California, including hospitals, physician groups, and employers. These ACOs deliver integrated care to over 100,000 Blue Shield members in Contra Costa, Orange, Sacramento, and San Francisco counties, as well as the Central Valley.

  • ACOs are a key part of delivery system reforms that are included in the Affordable Care Act, and we’re taking a leadership position in California and the nation.

  • Piloting a hospital quality improvement program with Adventist Health and the California Health Care Coalition to improve quality and reduce costs for patients in the Central Valley. Hospital quality in our state varies widely - different facilities see very different hospital-based infection and complication rates, medical error rates, and rates of adherence to treatment guidelines. Sub-standard quality not only harms patients, but actually inflates the cost of health care by increasing lengths of stay, readmissions and the use of health resources.

  • Improving timeliness and accuracy of claims processing through our Partnership in Operational Excellence and Transparency program. This enhances our relationships with network hospitals by providing opportunities for data-driven discussions that improve transparency and operation efficiencies.

  • Rewarding high-performing providers with Pay-for-Performance Programs that encourage best practices from physicians, control the rising cost of health care, and ensure members receive access to the care they need.

Finally, being a not-for-profit means being committed to all Californians. One goal is to expand access and choice for the underserved, low-income population. We have contributed more than $170 million to the Blue Shield of California Foundation since 2005, which supports the healthcare safety net in California.

The Foundation also works to build a strong, coordinated network of domestic violence service providers in California. As one of the state’s largest philanthropies, the Foundation was named to BusinessWeek's top 20 most generous corporate foundations.**

Our employees are generous as well, with their time and dollars. Our company culture is marked by a strong spirit of volunteerism. In 2011, more than 3,000 employees volunteered in more than 125 community projects and donated nearly $400,000 (with matching funds) to nonprofit organizations. To further impact our communities, Blue Shield promotes and facilitates nonprofit board service by our leaders.

Read more about Blue Shield Cares community involvement and social responsibility.

* With approval by the board of directors

** Businessweek: America's Most Generous Corporate Foundations