BLUE SHIELD: Invests $100 Million In Information Technology
Blue Shield of California announced it will invest $100 million over the next three to five years to completely overhaul its information technology system, a move the nonprofit hopes will allow it to compete successfully against its for-profit peers. The San Francisco Business Times reports that the amount is "about 6% of revenues, or double the industry average." The investment, financed by earnings accumulated from strong growth over the last two years, will not only replace the company's old mainframe system, it will also establish a database "to collect critical information on physicians' care practices, in the oft-spoken HMO goal of finding method to the health care madness." Although Blue Cross had a narrow 2% profit margin this year on revenues of $2 billion, the Business Times reports that "two years of record growth ... gave Blue Shield the largest PPO and fastest-growing HMO in the state." Blue Shield CEO Wayne Moon said, "The environment is going to change. As prices rise, patients will both pay more and have more say in their health care. That means they will also need far more support in choosing doctors, understanding their options and finding the right care" (Bole, 12/21 issue). Click here for recent California Healthline coverage of information technology and health care.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.