CalPERS Breaks Up Blue Shield’s Contract, Approves Five HMOs
On Wednesday, the CalPERS Board of Administration voted to award five HMO contracts, thereby breaking up Blue Shield of California's previous exclusive statewide contract, the Sacramento Business Journal reports (Robertson, Sacramento Business Journal, 4/17).
CalPERS has expressed frustration with increasing health care costs and a lack of improvement in workers' health.
Last week, CalPERS' staff recommended that the pension fund replace Blue Shield's statewide HMO contract with up to four health plans, in addition to a separate HMO contract with Kaiser Permanente (California Healthline, 4/17).
Details of New Vote
In addition to Blue Shield, the CalPERS board on Wednesday voted to approve new HMO contracts with:
- Anthem Blue Cross;
- Health Net;
- Sharp Health Plan; and
- UnitedHealth Group (Terhune, Los Angeles Times, 4/17).
Health Net initially was not included when the CalPERS' Pension and Health Benefits Committee on Tuesday voted to approve the new HMO contracts. However, the full board added the insurer on Wednesday without comment (Sacramento Business Journal, 4/17).
The Health Net HMO will be available in six Southern California counties.
The new contracts will start next year, according to CalPERS officials.
CalPERS officials have said they hope that increased competition among HMOs will help curb rising health care costs (Los Angeles Times, 4/17).
On Tuesday, Blue Shield CEO Paul Markovich told CalPERS officials that the insurer had presented a compelling bid to maintain its statewide contract. He added that contracting with multiple health plans might not produce better results for the statewide pension fund.
Markovich said, "I am perplexed by your confidence that you have a good feel for what the costs will be for multiple HMO options" (California Healthline, 4/17).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.