CalPERS Seeks Adviser To Help Reduce Rising Health Care Costs
A CalPERS health benefits panel on Wednesday will recommend that trustees hire Watson Wyatt Worldwide as an interim health care consultant to help develop a long-term strategy to rein in rising health care costs, the Sacramento Bee reports (Chan, Sacramento Bee, 9/12).
CalPERS -- the nation's largest pension system -- is the third-largest purchaser of health care in the U.S. after the federal government and General Motors. CalPERS provides coverage to 1.2 million people annually (California Healthline, 8/17).
The consulting firm will be replaced by a permanent adviser this winter. The annual fee for the adviser will be $1 million to $1.2 million, according to officials.
George Diehr, chair of the CalPERS Health Benefits Committee, said the consultant would offer trustees research and other strategies aimed at combating high health care costs.
In recent years, CalPERS has been unable to control health care inflation and rising premiums. Trustees earlier this year approved an average 6.3% premium increase for 2008, the lowest in a decade.
The proposed adviser could help support trustees' proposed initiatives in areas such as disease management. The adviser also could help the pension system better evaluate and use health care data collected from members and employers, according to the Bee.
Neal Johnson, a negotiator with the Service Employees International Union, said the adviser could help CalPERS streamline its various cost-cutting programs, including a $700 million investment initiative and a telemedicine project (Sacramento Bee, 9/12).