Anthem Blue Cross Rivals Kaiser Permanente with Creation of New Health Plan

Insurance giant Anthem Blue Cross is partnering with seven major hospital systems to create a new health plan that executives believe will create competition with Kaiser Permanente while reducing healthcare costs.

Announced on Wednesday, Sept. 17, the eight partners have launched Anthem Blue Cross Vivity. Similar to an HMO, Vivity members will be able to go to hospitals and doctors in Los Angeles and Orange counties, including well-known institutions Cedars-Sinai Health System and UCLA Health.

MemorialCare Health System, Good Samaritan Hospital, Huntington Memorial Hospital, Torrance Memorial Medical Center and PIH Health are also a part of the plan. According to the Los Angeles Times, in addition to their hospitals, the Anthem HMO includes all of their affiliated physicians’ offices, surgery centers, clinics and other outpatient facilities.

The California Public Employee’s Retirement System, the giant pension fund and the nation’s second-largest healthcare buyer, “has already signed on as the first major customer in the Southland starting Jan. 1, 2015,” reported the Times. Vivity will be offered to large employers starting Oct. 1.

Oakland-based and one of the largest integrated health systems in the county, Kaiser Permanente has traditionally dominated California state. But Vivity is likely to shake up the market.

According to a report by the California HealthCare Foundation, Kaiser controls more than a third of the health insurance market. Anthem however, is Kaiser’s biggest competitor with a 15 percent foothold, and that number could certainly grow with the new plan.

Vivity also represents a blossoming insurance venture where hospitals, physicians, and insurers work together to move away from a fee-for-service structure and toward a value-based reimbursement plan that rewards high-quality and safe patient care.

In addition to the plan, the health systems also intend to eventually link their electronic medical record systems to better coordinate and analyze patient care.

“This unprecedented partnership was created to provide employers with a unique healthcare offering,” Barry Arbuckle, CEO of MemorialCare, said in a news release. “Anthem Blue Cross Vivity provides choice, convenience and affordable access to exceptional physicians and hospitals throughout our region.”