CalPERS evaluates health care costs and quality amid rising premium spend

In a recent government meeting, the focus was on the rising costs and utilization of healthcare services in San Francisco County, with a particular emphasis on the role of CalPERS in managing these challenges. CalPERS, which provides health coverage to over 900,000 members through its commercial plan, is facing significant premium increases, prompting strategic planning to enhance provider network effectiveness and overall care management.

The discussion highlighted that CalPERS has seen its premium spending soar from $3.4 billion in 2003 to over $6.7 billion in 2011. This sharp increase underscores the urgent need for effective cost management strategies. The organization is not only concentrating on price but also prioritizing quality and clinical outcomes to address the wide variations in healthcare delivery across California.

CalPERS has implemented a proactive approach to educate its members about healthcare costs, encouraging them to take an active role in their health decisions. This initiative aims to mitigate the disparities in cost and quality that often arise when health plans purchase services from consolidated networks.

The meeting also touched on the significant portion of healthcare spending that goes towards hospital services, which historically accounts for 45 to 50% of total health costs. CalPERS is distinguishing between inpatient and outpatient services to better manage these expenses.

As the healthcare landscape continues to evolve, CalPERS remains committed to refining its strategies to ensure that members receive high-quality care while keeping costs manageable. The outcomes of these efforts will be closely monitored as the organization navigates the complexities of the healthcare market.