The Grandfather of Health Policy on the Moral High Ground for CAPG

by Gregg A. Masters, MPH

My first encounter with Leonard Schaeffer was back in the day when CMS was known as ‘HCFA‘ (the Healthcare Financing Administration) and the Federal commitment to the HMO (and emerging PPO) industry was tracked by a small staff huddled inside the ‘Office of Alternative Delivery Systems‘. Leonard Schaeffer was serving as HCFA’s Administrator. As such his seat was front and center as the uniquely American public/private partnership sought to deal with healthcare’s increasingly problematic and growing share of GDP (then in the 7-8% range).

Upon exiting his Government service Schaeffer was poised to lead the massive extension of managed healthcare into mainstream medicine via two principal market dynamics: 1) the introduction of the ‘Prudent Buyer Program‘ a PPO, followed by the 2) Conversion of Blue Cross of California (a non profit licensee of the Blue Cross and Blue Shield Association – Blue Shield is and remains today a separate (now taxable) entity in California), which then morphed into WellPoint and now Anthem empire.

Blue Cross of California dabbled in the HMO space, but for the most part deferred to the likes of Maxicare (eventually HealthAmerica, before the bankruptcy filings), FHP, Healthcare USA, Health Plan of America, HealthNet and PacificCare, (and their risk savvy medical group partners – Mullikin, Facey, Bristol Park, Harriman Jones, Friendly Hills et al) etc., instead leaning on and into it’s PPO products to lead the transformation of American medicine from UCR (usual customary and reasonable) to contracted or discounted medicine.

I worked on the provider side for flagship non-profits  including: St Joseph Medical Center, its faith based parent – the Sisters of Providence, and later the for profit hospital chain ‘AMI‘ (American Medical International) 1/2 of the partnership that gave birth to Tenet Healthcare, and finally the academic medical center UCI Irvine in the city of Orange.

This chat at the just concluded Annual Meeting of CAPG (California Association of Physician Groups) in San Diego is a lengthy but must see bit of important health policy history that contextualizes the glide-path in a way few are capable of recounting. Schaeffer is perhaps the ‘grandfather’ of US Healthcare innovation and has unique standing to comment on the past, rate the present state of progress 5 years into the ACA, as well as forecast a probable future for the industry writ large as well as the unique role entities such as CAPG (risk savvy players) can play.


See original commentary below and source link here:

Leonard D. Schaeffer presented the keynote talk, Health Care Reform: A 50-State Experiment, at CAPG’s Annual Healthcare Conference. Mr. Schaeffer was founding Chairman and CEO of WellPoint (now Anthem) from 1992 through 2004 and Chairman through 2005. Currently the Judge Robert Maclay Widney Chair and Professor at USC, he previously was President and CEO of Group Health, Inc. of Minnesota; Administrator of the Health Care Financing Administration (now CMS), and Assistant Secretary for Management and Budget, U.S. Department of Health and Human Services.

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