CalPERS Accepts Average Rate Hike Of Nearly 10%

MANAGED CARE June 1999. ©1999 Stezzi Communications

In the perhaps biggest sign yet that premiums are poised to soar, the California Public Employees’ Retirement System has granted the health plans it contracts with an average 9.7-percent rate hike for next year. It’s the highest increase since CalPERS accepted a 12-percent boost in ’92. CalPERS is the nation’s second-largest health care purchaser.

Kaiser Permanente, CalPERS’s biggest contractor, got an 11.7-percent hike. Kaiser and CalPERS engaged in a public showdown last year, when the HMO asked for a 12-percent boost. It finally settled for 10.75 percent.

Managed Care Outlook
Instead of a shortage of 130,600 doctors by 2025, an updated estimate by the American Association of Medical Colleges predicts that the shortage will fall between 46,100 and 90,400. Nonetheless, the demand for physicians is expected to climb by between 11% and 17% over the next decade because of a growing and aging population.
Legislation & Regulation
Richard Mark Kirkner

Gary Claxton, Kaiser Family Foundation

As the number of participants drops, the program to cover the losses for those remaining breaks down. Will it be fixed? Can it be fixed? It’s a three-year program, CMS underscores, but for the surviving 11 co-ops, 2017 might seem light years away.
Richard Stefanacci
Terri Schieder

Richard G. Stefanacci, DO, MBA and Terri L. Schieder, RN, MBA

Integrated Delivery Networks are increasingly focused on post-acute care networks, especially skilled nursing facilities, with regard to their costs and outcomes.
News & Commentary
Eight of the 10 most commonly used drugs in 2011–2012 (the years of the most recent data) were for conditions associated with being overweight or obese, including hypertension, diabetes, and dyslipidemia. Still, it’s complicated, and many factors are in play, not just weight.
Interview by Peter Wehrwein

John Driscoll

“I think there’s enthusiasm for post-acute benefit management now because people are looking for ways to significantly lower their cost of doing business while also ensuring that patients get the care they need,” says Driscoll. He wants to convince insurers that he can do it at a lower cost.
Medication Management
Thomas Reinke
Easier said than done. Delivery is a competitive, free-enterprise system that is focused on growth instead of value, and the trend toward clinical integration and hospital employment of physicians is characterized by employment contracts that base physician pay on productivity, not quality.
Cancer Watch
Peter Wehrwein

James Helstrom, CMO of Fox Chase Cancer Center

The facility is a prospective payment system (PPS) hospital that gets paid based on its reported costs. That may be changing as the debate about the cost of cancer care heats up, but Fox Chase is getting ahead of the game with efforts to reduce readmissions.
The Editors
Here are 11 problems with which health insurers will have to deal. The list does not include unknown unknowns but does count among its items the very much known unknown of the presidential election. We go out on a limb hoping that, if we’re wrong, you’ll forget.


Susan Ladika
The implementation of the ACA seems to have put this trend on steroids. While regulators weigh the pros and cons of the proposed Aetna-Humana and Anthem-Cigna deals, provider systems are joining forces and snapping up private practices while Walgreens is currently poised to acquire Rite Aid.


Timothy Kelley
American health care has been waiting a long time for this new payment system to pull into the station. It won’t fully arrive in 2016, even though ACOs continue to shift more risk onto providers. It takes time to figure out how to make these models work.


Robert Calandra
UnitedHealthcare’s recent announcement that it may exit the ACA exchanges in 2016 sowed more doubt about what many see as a law that’s fundamentally flawed and beyond fixing. Defenders of the ACA say that the exchanges are robust enough to withstand the absence of a large insurer.


Peter Wehrwein
There will be pushback, but the reaction to high drug prices will vary with the player and the turf being protected. Public and private players will talk and take some action toward basing drug choices on the value delivered. But how will that value be measured?


Jan Greene
Because it’s hard for consumers to choose a network without knowing what providers are in it, rules are tightening up on health plans’ obligations to maintain accurate provider lists. CMS recently laid out new rules on this for Medicare Advantage plans on the federal marketplace.


Jan Greene
The problem stems from the inability of health plans and out-of-network hospital specialty providers to agree on a proper fee, so consumers end up being billed the balance. The issue has gotten national attention and legislators vow to come up with a solution.


Robert Calandra
Democratic frontrunner Hillary Clinton is likely to paint the ACA as a symbol of success that just needs a bit of fine-tuning. GOP candidates want to repeal and replace it, but the eventual nominee with be asked: Replace it with what, exactly?


Joseph Burns
Lynn Quincy, Consumers Union
Quality tools are not some panacea. The fact is that few patients use the proprietary quality and price transparency apps that health plans provide. Are they not useful? Do people not care? Are health plans not to be trusted? Answer: all of the above.


Susan Ladika
Health insurers are a prime target because of the richness of the information they hold. Payers need to increase their investment in people and processes to try to fend off data breaches. The greatest risk might come from interaction with vulnerable third-party vendors.


Joseph Burns
Everyone in health care recognizes that early detection comes at a cost: It can lead to unnecessary treatment and spending and, in some cases, real harm to patients because of the risks and side effects of treatment. This is a particularly vexing problem when it comes to cancer screening.


Robert Calandra
The foundation for the Medicare Access and CHIP Reauthorization Act (MACRA)—scheduled to go into effect in 2019—will start to be laid in 2016. The law affects physicians receiving Medicare payments, but not all of them will be happy with the changes.


Joseph Burns
Health plans can’t keep up with orders from physicians for new complex molecular diagnostic tests that clinical labs develop and promote as the next best technology to improve patient care. The issue is proper vetting, and the debate promises to become more heated.