CalPERS to Consider 2004 Health-Care Strategies

March 17, 2003 ( - Plan sponsors hoping for a health-care cost respite in 2004 might keep an eye on Sacramento this week.

That’s when the health benefits committee at the California Public Employees’ Retirement System (CalPERS) will consider proposals that it hopes will rein in soaring health-care costs.

CalPERS, which ranks behind only the national government in the amount it spends on health care, is considering a radical overhaul of its benefits program that would tie premiums and fees to the quality of hospital care, according to Dow Jones, citing a CalPERS spokesman.

A year ago health plans submitting bids to CalPERS initially planned HMO rate hikes of 15.1% to 41.1%, but the system wound up absorbing a 25% increase in those costs (see  CalPERS Health Hikes Start of National Trend? ).   While this year’s proposals are still in the early stages, many of the key proposals involve spurring patients to use doctors and hospitals that have track records for providing good care.

CalPERS also wants to make health providers more accountable in justifying the costs they pass on by requiring the plans to provide more data than they have in past years, according to the report.  

They will also consider a proposal to better manage patients with costly chronic diseases – perhaps including early screening for certain diseases and then lowering co-pays to encourage members to take part in preventative treatment programs. Doctors and providers that offer good care would also get bonuses under the plan, according to the report.