HIPC: To Be Run By Pacific Business Group on Health
The Pacific Business Group on Health has been chosen to run the Health Insurance Plan of California, "the state's health care purchasing pool for small business," when the state hands the HIPC over to the private sector next July. The Sacramento Business Journal reports that PBGH beat out two other parties, Provider Choice Inc. and the Foundation for Health Care Advancement, to win the contract. Provider Choice, which was founded by John Ramey, "who helped found the HIPC in his former role as executive director of the Managed Risk Medical Insurance Board," had won the contract in a previous round of bidding, "but a protest from the loser started the process over again." A lawyer for Provider Choice said it planned to file an appeal of the decision.
On The Bright Side
The Sacramento Business Journal reports that the change could "be good news for small employers if the group is able to cut rates and improve choice due to its clout in the large-employer market." The Journal reports that PBGH "stands to collect at least $6.1 million a year to manage" the purchasing pool, "which generated $152.3 million in health care premiums for the fiscal year ended June 30." The HIPC was started in 1993 and currently "collects premiums from 25 health plans and provides insurance to some 132,000 members from about 7,000" small business employers. Margaret Stanley, director of the health benefits purchasing program at the California Public Employees' Retirement System, said, "This is a very interesting development. PBGH has made innovations in a number of areas, including quality and consumer satisfaction, and is really perceived as a leader in the country." She continued, "If PBGH can leverage concerns of small employers with the larger ones it already represents, it has the opportunity to have a real positive impact on health care purchasing." The Journal notes that while PBGH "has extensive expertise in negotiation health care rates for its 20 large employer members on behalf of more than 500,000 employees, it has not administered a program before" (Robertson, 8/17 issue).