CalPERS Committee Votes To Award Three New HMO Contracts
On Tuesday, CalPERS' Pension and Health Benefits Committee voted in favor of awarding three new HMO contracts, thereby breaking up Blue Shield of California's statewide HMO contract, the Los Angeles Times reports (Terhune, Los Angeles Times, 4/16).
The CalPERS Board of Administration will consider the recommendation Wednesday (Robertson, Sacramento Business Journal, 4/16).
CalPERS has expressed frustration with increasing health care costs and a lack of improvement in workers' health (Los Angeles Times, 4/16).
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, 4/11).
Details of Committee Vote
CalPERS' Pension and Health Benefits Committee voted to award HMO contracts to Anthem Blue Cross and Blue Shield to cover most of California.
In addition, the committee voted to award HMO contracts to:
- Sharp Health Plan in San Diego County; and
- UnitedHealth Group in parts of Northern and Southern California.
Blue Shield Responds
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" (Los Angeles Times, 4/16). 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.