CALPERS: New Thinking ‘Makes Sense’
An editorial in this week's Business Insurance says that " CalPERS' revised strategy" of accepting more HMOs into its system "makes sense." For the last 10 years, CalPERS has imposed a moratorium on admitting new HMOs, which let the HMOs contracting with CalPERS rest assured that their business "was safe from change or competition." But, the editorial argues, "[n]o supplier should know that it has a permanent lock on a buyer's business. Inevitably, that leads to complacency, which in turn provides little incentive to provide quality service at a competitive price." By lifting the moratorium and opening up to new HMOs, CalPERS "is taking the right step, one that should benefit not only the employer but also its employees," the editorial concludes (7/6 issue).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.