Blue Shield of California - Teaching note

  • Reference: SGSB-OIT112TN-E

  • Year: 2016

  • Number of pages: 18

  • Geographic Setting: USA, California

  • Publication Date: Jan 29, 2016

  • Source: Stanford Graduate School of Business (USA)

  • Type of Document: Teaching Note

  • Industry Setting: health care

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Blue Shield of California follows CEO Paul Markovich as he navigates the challenges of running one of the largest not-for-profit health care insurers in the United States. The case begins with a history of health insurance in the US, beginning in the 1870s and working through the origination of modern day health care in the 1920s. It then analyzes the modern day industry before diving into the challenges faced by Blue Shield of California today. The case examines the potential advantages and disadvantages of acting as a not-for-profit health insurer and compares the model to for-profit insurers. Then, the case moves into a discussion on challenges and dilemmas facing the insurer today. Can affordable care organizations be the key to Blue Shield's ability to compete with HMOs, such as Kaiser? The case then discusses how Blue Shield prepared to enter the California exchange, as well as how the organization considered shifts in its business model to account for an influx of new customers. Finally, the case finishes with two industry-wide questions. First, are Medicare and Medicaid the key to growth in an increasingly competitive environment? Second, given the high level of industry consolidation, how big should Blue Shield of California be to effectively offer services to all of it's members, but still provide high quality care?