CalPERS Mulls Breaking Up Blue Shield of Calif.’s Statewide HMO Contract
CalPERS' staff has recommended that the pension fund replace Blue Shield of California's statewide HMO contract with up to four health plans, the Los Angeles Times reports.
About 400,000 public workers and their families obtain health care coverage through CalPERS.
The CalPERS board will consider the recommendation next week.
Details of Recommendation
In addition to a separate HMO contract with Kaiser Permanente, CalPERS' staff is recommending that the board offer four HMOs throughout the state. The largest HMO would cover 33 or more counties in the state, while at least one other health plan would be offered in Northern California and two other HMOs would be offered in Southern California.
CalPERS spokesperson Bill Madison said, "The staff is not recommending specific companies, and it will be up to the board to select who they think best meets the needs for fulfilling this HMO procurement."
Health Plan Bids
Seven companies have submitted bids for a five-year CalPERS HMO contract, which would begin in January 2014.
The five firms that submitted bids that CalPERS rated as "above average" are:
- Anthem Blue Cross;
- Blue Shield of California;
- Health Net;
- Sharp Health Plan; and
- UnitedHealth Group.
Bids from Aetna and GEMCare Health Plan were rated as "inferior" and "average," respectively.
Response to the Recommendation
Blue Shield has warned about weakening health plans' purchasing power by splitting up CalPERS membership among several plans.
Blue Shield spokesperson Steve Shivinsky called the recommendations "confusing," adding, "It raises a lot of questions."
Some health care experts say that Blue Shield likely will lose its statewide contract.
Donald Crane, CEO of the California Association of Physician Groups, said, "CalPERS is obviously going to change from the one-plan model they have now," adding, "I think they want to spur competition, and it looks like they are succeeding at that" (Terhune, Los Angeles Times, 4/11).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.