As of Jan. 1, 2025, Scripps Health is no longer a part of the Anthem Blue Cross insurance network. After months of failed contract negotiations, Scripps Health has been removed from 125,000 San Diegans’ Anthem Blue Cross insurance networks.
“The most powerless people in this whole system were the patients right now. They don't have a say, other than going back to their employer,” said Nathan Kaufman, a health care consultant and the managing director of Kaufman Strategic Advisors.
Kaufman said the current health care situation is a mess.
“Unfortunately you have these for-profit insurance companies that want to grow and they grow in their profits in part by reducing at least the rate of increase in the cost of hospitals," Kaufman said. "And then you have hospitals who are usually governed by the community, who are seeing huge cost inflation and absolutely need rate increases, primarily to subsidize government patients.”
Kaufman said it’s important for quality health care systems to get the money they need for the care they provide, and the only place to do that is from commercial insurance companies.
“That's really what the fundamental issue is that operating a health system is costing significantly more in terms of a rate increase than Anthem is willing to give,” Kaufman said.
No one from Scripps Health was available for an interview, but in a statement, Scripps said: “Throughout the negotiation, Scripps’ focus was to change Anthem’s bureaucratic policies that cause unnecessary delays, burdens and barriers to patient care … It is disappointing Anthem was unwilling to reduce those barriers and offered rates below health care inflationary costs.”
The statement went on to say, “Scripps proposed to continue negotiations beyond yesterday, but Anthem provided an ultimatum that was unacceptable.”
“It isn't just about cost, it's about what I call the epidemic of administrative harm. Which is creating burnout on the part of physicians and creating huge infrastructure costs for health care providers,” Kaufman said.
Anthem Blue Cross was also not available for an interview, but a spokesperson provided the following statement: “Scripps demanded drastically increased prices for patients covered by Anthem — increases that would have led to higher out of pocket costs for our members and would have hit area employers particularly hard.”
According to Anthem Blue Cross, more than 80% of their members are insured by employers that pay their employees’ health care costs directly.
“What the government has done is created an environment where essentially health systems are generating a hidden tax. They're basically taxing the employer for the underfunding of Medicare and Medicaid. So that's where it starts. And until we fix that, we're going to have a huge problem,” Kaufman said. “The second part is we have these what I call 'insurance cartels,' 80% of all drug claims go through three insurance companies, just three.”
Both Scripps and Anthem noted that patients who are currently receiving treatments for serious and complex conditions may continue care with Scripps through a Continuity of Care accommodations request.
Emergency care is always considered in-network and is not impacted by this change.
Scripps Health and Anthem Blue Cross both expressed they are open to discussion and coming to a reasonable agreement. Kaufman said agreements like this can be resolved in weeks or it may take months.
“I am concerned that there is not sufficient capacity within the system for the other health care systems and physicians to absorb the Scripps patients who can no longer go to Scripps,” Kaufman said.
Scripps recommends its patients contact their employer’s human resource departments about their health insurance options.
