The political and business conditions of the late 1940s were a fertile climate for the conception of the Western Conference. The U.S. Congress was considering the establishment of a "socialized" medicine plan as many other nations had adopted. Business and labor were looking for methods to handle the health care of their members as well as a uniform and equal funding system of paying for such care. Physician and hospital factions were each sponsoring their own brand of financing, benefits, and payments suited to their needs. Large business was seeking a way of providing uniform benefits at uniform costs. Insurance companies were reluctant to insure health care except at minimal indemnity levels. Blue Cross was on a strong path to create a health care business on a national scale with hospital sponsorship and control at the helm. Physician-sponsored or physician-controlled health care plans were in a minority except in the west and particularly northwest states where prepaid physician-sponsored plans originated.

Howard "Hap" Hassard became general counsel to the Associated Medical Care Plans (precursor to the Blue Shield Association) in the fall of 1947. During the first several meetings under his leadership, the main agenda item was a proposal to form a national organization so that uniform national contracts could be offered to so-called "national accounts" or businesses operating in a number of states. (These meetings were held jointly with Blue Cross plans’ membership meetings.) The debates relating to this idea, which was proposed by Blue Cross, were acrimonious, bitter, and extremely divisive. With respect to physicians’ services, the very vocal opposition was primarily from the northwest and north Midwest plans. The American Medical Association was also opposed. The fear of domination by Blue Cross and its parent, the American Hospital Association, was paramount; but also there was rather widespread fear amongst physicians that any centralized national organization in the economics of medicine would become a monster.

Mr. Hassard noted that the point of view of most western physicians could best be expressed in a hostile-free atmosphere. He suggested this idea to Bill Bowman, then executive director of California Physicians Service who concurred and communicated with several of the northwest prepaid medical service plans. The result was a reorganization-exploratory meeting, which was held on June 20, 1948, in Chicago. Twenty representatives of 12 medically-sponsored prepayment plans attended. These individuals concluded that the formation of a Western Conference of Medical Service Plans was in the interest of physicians and their plan’s future. They unanimously adopted a statement of basic purpose which read: "Due to the community of interest in the Rocky Mountain - Pacific Coast area with respect to medical service, it is the purpose of a Western Conference to furnish a forum in which to exchange ideas and information on all problems having to do with prepayment medical services in the area, and to take common action in the furtherance and protection of those interests."

It was also proposed that all of the medically-sponsored prepayment plans in the 11 western states and Territories of Hawaii and Alaska be invited to join the Western Conference. Proceeds of this meeting were provided to all such plans along with an invitation to attend an organizational meeting to be held in Reno, Nevada in September of 1948.

At the time, there were 40 separate plans eligible to participate in the Western Conference: 24 in Washington, 5 in Oregon, 2 in Idaho, and 1 each in the states of Arizona, California, Colorado, Hawaii, Montana, Nevada, New Mexico, Utah, and Wyoming. By the time of the September meeting, the plan in British Columbia became aware of the effort to form the Conference and gained an invitation. By the end of the September meeting, the Conference decided to extend the Conference territory to include Western Canada.

At the September meeting, 32 plans officially stated their intention to participate. While the remaining nine plans declined to participate at that time, they approved of the concept of the Conference. Those declining were Arizona, Colorado, Nevada, New Mexico, Wyoming, plus one each in Oregon and Idaho, and two in Washington.

In 1951, the Conference decided to extend an invitation to other Canadian plans to attend the next Annual Conference meeting because of the common interests in those plans. By 1956, an additional six Canadian plans had joined as Conference members.

By 1956, the two Washington plans, the remaining Oregon plan, and the Wyoming plan also joined the Conference. The plans in Arizona and Colorado joined at a later date. The Conference also expanded its territory to include all states west of the Mississippi River and eventually included plans from most of these states as members.

The September 1948 meeting in Reno, Nevada was organizational in nature. Participants discussed the common needs of the plans, the necessity of such an organization, and how to proceed. They concluded that it was not necessary to form any "hard and fast" organization that might become a burden on any individual plan, but the organization should rather be on a cooperative basis. It was part of the duties of the elected Chairman and Secretary to establish a meeting schedules for the Conference. Four standing committees were established to take up their respective problems in detail: (1) Public Relations, (2) Rural Health Enrollment, (3) Coordination and Reciprocity, and (4) Professional Relations.

The first regular, called meeting of the Conference was held in December 1948 in Portland, Oregon. This meeting began the earnest effort to provide the forum of discussion bringing first-hand information to the physician officers and management regarding the marketplace and what needed to be accomplished. The agenda for this meeting included presentations from two unions and an interstate employer. The meeting further explored in detail, problems of the plans’ ability to provide interstate coverage, reciprocal membership, and how to promote physician cooperation.

There were three Conferences meetings in 1949. However, the member plans concluded that it was in the best interest of the Conference to hold the meeting once each year. Additional meetings of Committees could also be held to deal with detailed areas of concern. The Committees could then bring forward their recommendations to an annual meeting of the plans.

These first years of activity were ones of adjustment as everyone had a different idea about how the organization should proceed with the business at hand. There were certain constraints that inhibited mutual confidence and the free exchange of ideas. By 1952, it was clear that unless a method could be created to unite the plans in a common objective, the Conference was probably on its way to an early demise.

An Interim Committee of 7 plan administrators was appointed. In addition to the Committee’s charge to examine interplan transfers, the group was given the task of recommending a solution to resolve the administrative problems of the Western Conference and its member plans. The Committee recommended the appointment of a "Permanent Committee" of plan administrators to work out a common contract and any other business administrative details concerning the problems common to the Western Conference. In November 1952, the Conference adopted those recommendations and named the seven Committee members as the "Permanent Committee." The object of this Committee was to develop specific plans that would strengthen the Conference structure and make it an effective and purposeful organization. While the size and make-up of the Permanent Committee changed over the years, the concept remained the same until 1959 when the Conference amended its Bylaws to change it to a Board of Trustees.

With the inception of the Permanent Committee, it was agreed that the Annual Meeting of the Conference should be primarily for the benefit of the physician profession and Board members to provide an arena for the analysis and discussion of the various and increasingly complex aspects of medical economics. Since that time, the Annual Meeting has included speakers of national repute lecturing on economic, legislative, and political developments affecting the operations of the plans. The Annual Meeting provides Board members the opportunity for informal discussion and the chance to develop insights and opinion as to prepayment in general and their plan in particular.

The most serious problem facing the plans in the early years was very basic - it was survival. There was very limited, and for the most part, only academic discussion about the investment of surplus funds and capital improvements. Cash flow was a problem in a very real sense, everyone hoped there would be enough cash in the drawer to meet the payroll. Proration of physicians’ fees was commonplace.

The growing demand from business and labor caused real problems for the plans in terms of their ability to provide uniform benefits, uniform or acceptable pricing and payment for services, transferability of eligibility, and sharing of underwriting risk. Uniformity in any of these areas was nonexistent. The Conference provided the forum for the plans to work on resolving the difference.

By 1954, the plans developed and adopted an Interplan Transfer Agreement. Several years later, the Blue Shield organization concluded a similar Agreement among its member plans. By 1957, a Uniform Benefit Contract was approved which operated on a control-plan basis. Not all plans signed this contract because of legal obstacles in their particular state. While a great deal of effort and compromise was put into the contract development and several incentives were offered there is no record that a single Uniform Benefit Contract was ever sold. The plans did, however, work out the necessary administrative details in specific geographical areas to be able to write benefit plans over multiple areas.

This monumental effort to solve day-to-day problems brought forth the second major theme of the Conference, which was to improve the operations of the participating plans. Toward this end, a two-part program was implemented over the next few years:

Executive forums of top management of the plans to study economic developments and trends, market conditions, public and professional relations, operating costs, benefit structures, rates, claims experience, and other management concerns. Frank exchange of thoughts and ideas made these meetings invaluable adjuncts of management.

Seminar or workshop meetings of middle-management personnel to analyze and improve administrative procedures, exchange specific information, and develop uniform and efficient operating methods. The agenda for these meetings are carefully planned to bring into discussion practical matters of common interest, and to develop working procedures that can be shared by all plans. The seminars are held in all areas of administration, including marketing, claims processing, statistics, public relations, professional relations, and data processing.

Over the years, the Conference has become a dynamic force in medical economics. With concern for both the day-to-day and future problems of prepaid health care, it serves as a point of reference and assembly open to physicians and administrators alike for the clearance and exchange of information, ideas, and operational "know how." The Western Conference Annual Meeting has grown to be THE premier Conference on health care prepayment and medical economics in America.

Incidental to the process of exchange has been the development of personal relationships that have contributed, and will continue to contribute, to the solidarity and sense of purpose of the Conference. Without encroaching in any way upon the activities and objectives of other professional and prepayment associations, it has become an accepted management resource available to the member plans for the solution of the problems they share.

The original thirteen Charter member plans were:

• Arizona Medical Service
• California Physicians’ Service
• Hawaii Medical Service Association
• King County Medical Blue Shield
• Medical Services Association (BC)
• Medical Services Association of Utah
• Medical Services Corporation of Eastern Washington
• Medical Services Inc. (Saskatoon)
• Montana Physicians Service
• North Idaho Medical Service Bureau
• Oregon Physicians Service
• Pacific Hospital Association
• Wyoming Medical Service