CalPERS Pension & Health Benefits Committee – April 16, 2013


>>PRIYA MATHUR: All right. Now for the moment you’ve all been waiting
for. (laughing).>>Or the two hours.>>PRIYA MATHUR: Or the two hours. Okay. So we are going to move now to agenda item
number 11 and the HMO procurement. Before we begin, I would like to just take
the opportunity to make a few comments about the process that we’ve used for the HMO and
PPO procurements and the activity leading up to these procurements. The health benefits staff has been engaged
for a very long time in testing new strategies that result in improved carrot lower costs
for our members, and as we approached the procurements last year, it was obvious that
we could use this opportunity to spread these strategies more quickly by requiring that
they become part of our contracts. The procurement had embedded into the requirements,
in the RFP, the request for proposals, strategies that over the long term will improve the quality
of care for our members, and also reduce costs. This procurement process, the procurement
itself, is by no means simple, but I think the process has been very, very successful. Staff looked at prior procurement documents
and evaluated how they could be improved and incorporated these improvements into our current
RFP process. Select understanding the right HMO plans for
our members is not a simple matter of a one time low bid but, rather, a complex and complicated
alignment and comparison of various factors regarding the health and well being of our
members and the cost over the long term of healthcare for those members. Throughout this process, I have been extraordinarily
impressed with the level of knowledge that our staff have displayed and their unyielding
dedication to our members. I can’t tell you the number of overtime hours
that our staff and not just the few people that you tend to see up here, although they
certainly have put in their share of hours, but there is a huge number of people behind
them who have been working day and night, weekends, to prepare us for this moment today. They really deserve a great big thank you
from all of us. One issue that we’ve heard multiple times
is the feeling by some that is different that the committee did not interview the HMO or
PPO finalists. This is a change from what we have done in
the past, but this decision was the committee’s decision, and we made the decision for very
good reasons. Our staff has spent hundreds of hours reviewing
draft proposals, participating in confidential discussions with the bidders and then reviewing
those final proposals and meeting with us, the pension and health benefit committee,
to discuss the results and information that has come through both the proposals and the
meetings. The committee determined that an interview
of obviously well qualified and reputable proposers would not assist U.S. in the decision
making process, that actually the robust evaluation and assessment that has gone on leading up
to this moment really and the engagement that this committee has taken with that information
is really what’s necessary to make a good decision today. So we look forward to the discussion today. I imagine it will be illustrative and illuminating
for all of you in the audience and anyone who is watching us on the webcast, and I think
we will come to a good conclusion at the end of our deliberations. So with that, I’ll turn it over to you, Ms.Boynton.>>ANN BOYNTON: Thank you. Good afternoon. I wanted to just add a couple of comments
relative to a question that has come up as well, specifically pointed at the question
of cost. People of course all state employees, all
of our meks, all of our local agencies, are anxious to understand where are the rates
actually going to end up as a result of this effort. Just from a timing perspective, of course,
as you always know, we begin in April and you approve final rates in June. It is not possible for us to develop rates
until health plans have been selected. It’s only once that’s done that we can develop
the rate development process. I want to assure you, though, as those in
the audience and watching on the web, that the staff has received and reviewed a significant
amount of confidential information related to pricing. We have spent hours and hours and hours and
hours reviewing that information so that we understand what the cost implications are. In particular, although not obvious when you
might look at the scoring criteria themselves or read through the RFP, if you were so inclined,
the cost element, the long term cost elements that you referred to, Madam Chair, are embedded
in many aspects of the requirements that we have in our procurement. So it’s not just one area where we look at
one piece of one cost, it’s what are the overall, what is the plan doing, what are the relationships
with the providers, what do those rates look like, what in the long term do we believe
their ability is based on what they’ve described and presented to us to actually implement
long term cost containment strategies for us. Again, we look forward to having the plan
selected so we can begin the rate negotiation and contract negotiation process. We are very excited with all of the activity
that has gone on and look forward to continuing our discussion with you now.>>PRIYA MATHUR: Terrific. Thank you.>>Good afternoon, Madam Chair, members of
the Pension and Health Benefits Committee, agenda item number 11 asks the committee to
consider the cumulative evaluations for all proposers responding to HMO request for proposal
number 2012 6334. Staff recommend to the Board of Administration
in this agenda item the intent to award to one plan that serves 33 or more counties in
California and at least one other plan for northern California and at least two other
plans in southern California.>>Madam Chair, members of the committee,
Doug McKeever, CalPERS staff. Before we get into the details of the actual
procurement process, we thought it would be helpful to reinforce the backdrop from which
the PPO and HMO procurements were initiated. Year after year, CalPERS has grappled with
the increasing costs of healthcare. The drivers are many, yet with an average
yearly increase of CPI plus 5, the financial challenges being borne by our employers and
our members have not proven to be sustainable. As a result in 2011 the board directed staff
to undertake a very comprehensive health benefits purchasing and review project. This year long effort included a review of
the healthcare marketplace, member and employer surveys, an extensive stakeholder engagement. The results of this effort culminated in the
development of 21 initiatives to implement over the next three to five years. The initiatives were focused on influencing
healthcare delivery, improving health outcomes and delivering sustainable programs. The details of our efforts were presented
at the January2012 board off site and the board subsequently adopted all 21 initiatives
in March of 2012. I mention this because initiatives 12 and
14 are specific to the HMO and PPO procurements. However, the request for proposal included
many, many more of the initiatives that you all approved, including the foundational strategies
of which we’re building around our integrated healthcare models, which includes financial
risk sharing arrangements between health plans and providers, intensive case management,
shared decision making between patients and physicians, reducing inappropriate and/or
unnecessary healthcare, including incentives for chronic and disease management, having
strong information technology and building risk ajupsed premiums across all plans. So with that, we’ll get into the actual discussion
of the procurement process and I’ll pass it on over to Kathy.>>KATHY DONNESON: On October26, 2012,
the HMORFP was released to slis it bids for health benefits services for 2014 to 2018. The RFP was released in a phased approach,
phase 1 was released on August24, 2002, and phase 2 on October26, 2012. Proposers were alowfed to submit written questions
after each faifs of the RFP and CalPERS provided responses. Six addenda were issued containing clarifying
information and updated requirements. Eight HMO draft proposals were received on
December12th. These proposals were evaluated by program
staff and discussion topics were prepared for the HMORFP confidential discussions. The confidential discussions were conducted
with the proposers January28 through 31st of 2013 to address the proposers submitted
topics, questions, and items identified by the evaluation team for feedback to the proposers
on their draft proposals. This was their opportunity, the plan’s opportunity
to seek any clarity around the draft proposal and for CalPERS to respond, and we did respond
in areas of making sure the proposals were complete, that there was transparency and
other items that were important to the board that we conveyed during those draft discussions. Seven final proposals were then received by
the deadline on February22nd, 2013, from Aetna, Anthem Blue Cross Blue Shield of California,
GEM Care, HealthNet, Sharp and United Health Plan. After a preliminary review of the proposalless
by the operations support services division to determine completeness of required documentation,
the proposals were released to the benefit programs policy and planning staff to begin
evaluation. The first stage in the process was to evaluate
and scorp the technical proposals comprised of the business requirements questionnaire,
the technical requirements questionnaire and the technical requirements questionnaire supplement
using automated scoring tools. Multiple evaluation teams compiled consensus
scores for sections within each of the technical proposal components. Site visits were conducted and scored for
one or more sites for each proposer. Reference checks were accomplished and deemed
satisfactory approximate or unsatisfactory for or unsatisfactory for each proceed
Poor. Upon completion of the technical evaluation
the second stage in the process was to evaluate and score the financial proceed poasms made
up of the administrative service fees and performance guarantees. The evaluation team developed the scordz using
automated scoring tools and compiled consensus scores for sections within each of the financial
proposal components. Upon completion of the evaluation of the proposals,
the consensus scores were consolidated into the automated summary evaluation scoring tool
which used predefined criteria to weigh and composite the scores into Harvey Ball designations
for presentation of final RFP scoring results. Point totals and composited scores reflected
as Harvey Balls are provided in attachment 1 which we’ll cover a little bit later. In addition, the RFP provided a pharmacy supplement
for both the business and technical requirements questionnaires with pharmacy specific performance
guarantees in the financial proposal. Proposers were asked to complete the pharmacy
supplement questionnaire, should they wish to retain the pharmacy benefits rather than
carving out the pharmacy. Blue Shield of California proceed poamsed
to retain the pharmacy benefits proposed to retain the pharmacy benefit, which featured
a robust integration of pharmacy and medical services and clinical program and put administrative
feeches at risk on pharmacy performance guarantees. The evaluation indicates that Blue Shield
should keep its pharmacy. Other proposals were received from Anthem
Blue Cross and I’m sorry. From two other bidders. And those proposals were not as complete appears
the Blue Shield proposal. Before going to the results in attachment
1, I’m going to turn it over to James who would like to briefly mention the health plan
coverage area maps and the location of the integrated health models identified with each
proposal.>>Okay. Can you hear me? We’re going on start this interactive process
where you guys can intercede and tell us if you would like to see a different view because
it’s kind of confusing if you don’t>>Just if I can just interrupt for a moment,
for the benefit of the committee, please look at your monitors so you can see the maps.>>So we’re going to start with a bunch of
overlays, and we’re going on show the service areas of the plans that proposed to be a part
of our program. We decided to make it understandable, really,
we had to split it into three different sections. One is a statewide view where we really only
have about two plans that we would consider statewide. Then we’re going on Look at a northern California
view where we have really three plans that we’re willing to provide services in northern
California, and then we have southern California where every health plan was interested in
providing services to our members. So we’re going to start with our statewide
view here, and as you look at the map, you can see kind of gray shaded area is our population. That’s where our members live. Primarily around the big metro areas and then
along the large freeways. So now that you see where our members are,
we can show you where Blue Shield’s proposed service area is, and this is the largest proceed
poamsed service area of any proposed service area of any plan, and it covers hey large
proportion of the state. The next plan we’ll snow you is Anthem, it’s
a smaller area, you can see where it’s kind of a brownish color, that’s where both plans
have their service areas. Where it’s light blue, that’s Blue Shield
only and where it’s orange, that is Anthem only. So we can stop here and if you have any questions,
we can play around with the map or change things if you want to investigate further
on a statewide basis.>>PRIYA MATHUR: Great. We do have one question from the committee. Mr.Jelincic?>>JJ JELINCIC: This was a question back on
the agenda item itself, not on the map, so I will defer the question if you would prefer.>>PRIYA MATHUR: Okay, I think you can ask
a question on the agenda item, that’s fine.>>JJ JELINCIC: Okay. On the agenda item itself on page 2, through
this RFP, we focus on some strategies. The fourth bullet down there is risk adjustment
across all plans. We have a history that if we don’t object,
it’s assume that had we agreed. What’s the intent of that specific language? Is it really to do it across all plans, or
is the issue of doing it just HMOs and PPOs separate still an open question?>>The committee has not made a final determination
on how you wish to implement risk adjustment for 2014. Those conversations are ongoing.>>JJ JELINCIC: Okay. I just want to make sure we weren’t accidentally
making a decision without knowing it. Thank you.>>PRIYA MATHUR: Any questions on the map,
any desire to see anything>>So that we’ll be coming back and forth
to the map, you’ll see a lot of it, but we wanted to just sort of get you familiar with
the concept of what it can do for you.>>PRIYA MATHUR: Okay. Thank you. Okay. You can proceed, James.>>Okay. So now that you’ve seen the entire state,
we’re going on look at northern California, and this is pretty much the areas that the
southern California plans didn’t want to serve, and again we start with the population centers,
we add Blue Shield service area, we can add Anthem service area and you’ve seen this,
and then where we have a third option is United Healthcare. This shows up kind of a purple color where
the health plans overlap, all three of them. Again, you have the brown where it’s only
Anthem and Blue Shield, you have kind of a magenta color up near the Lake Tahoe area
that is where United Healthcare has a service area and the other plans do not, and that’s
pretty much the view for these three plans in northern California.>>PRIYA MATHUR: Okay. There are no questions at this time, so if
you want to continue.>>All right. So our next view is going to be of the integrated
health management groups that we have in northern California. We’re going on start with Blue Shield, and
you can see it’s clustered prime airm in the Bay Area, you have primarily in the Bay
Area, you have some Sacramento, I’ll get that county. The print is too tiny for me. Can you zoom in? Stanaslas (phonetic) we can zoom in if you
guys can’t read the counties either. So they’re in blue, as you saw on the previous
map, then we’re going positive add Anthem which is yellow and where you see an overlap
it comes out green, or I shouldn’t say yellow, I should say orange. And Anthem has some different areas, again,
a different part of the Bay Area, and now they’re in San Joaquin where Blue Shield isn’t. Then we can add United next. They spread up north into Sonoma where the
other plans are not.>>PRIYA MATHUR: I think you should just keep
going.>>All right. Let’s go to southern California, the more
complicated region. Okay. Again we start with the population centers,
and we’re going to go to Blue Shield first, and it covers virtually everything in southern
California. Next we’ll have Anthem, which covers a bit
less but still pretty much the major population centers except for a little bit on the east
side of Riverside county, and next we can go to United. United you can see does not cover San Louie
oh business spoa SanLuisObispo like the others do, covers some areas of San Bernardino,
some areas not covered by United Healthcare, if you want to look at just one of these plans,
we can toggle them on or off however you prefer. The next one we’ll show will be HealthNet,
and it’s a little hard to see so we might want to pull off United when we do this. So HealthNet is green. You can see again it’s more of the LA area,
it doesn’t have northern coastal counties in southern California, it doesn’t have as
much of Imperial. And next I think we ought to pull off HealthNet
and look at some of our regional plans. Next is GEM care. You can see that that’s up north in Santa
Barbara, SanLuisObispo, let’s pull that off and go to Aetna which is primarily in
Riverside, go to San Bernardino. If you can’t see that, let us know, we can
turn off some other service areas.>>PRIYA MATHUR: I think you might want to
turn off Anthem because of the coloring.>>We could turn off Blue Shield as well.>>PRIYA MATHUR: You could turn off Blue Shield
as well.>>There.>>PRIYA MATHUR: There you go.>>Then let’s click off Aetna and go to Sharp
and that’s obviously San Diego County. If you have any questions or want to see different
views, we can overlay however you want or we can move to the IHM’s in southern California.>>PRIYA MATHUR: I think werbled sort of proaf
with the presentation and then we’ll come back and look at various combinations.>>Okay.>>PRIYA MATHUR: Thank you.>>I would now like
>>Okay. Here we’re going on start with Blue Shield
again, and you can see a strong cluster in Orange County. You may recall that we made, Blue Shield made
saint Joseph’s an exclusive provider in Orange County for Blue Shield’s net value plan so
you can see why that worked for them. Next let’s go to Anthem, and you can see Anthem
covers more of LA County and spreads eastward and goes down to San Diego County. Next let’s go to United, and United is quite
big. Why don’t we pull off Anthem and ee if there’s
much difference. You can see United covers quite a bit of southern
California. Let’s go to HealthNet next. We can leave United on and see if there’s
a difference. So HealthNet, it’s a bit further into San
Diego than United but other than that it’s not quite as broad. You can pull off United and get a quick view
of HealthNet, focused really in Los Angeles and a bit of Riverside County. Let’s go to Gem care, you’re not going on
see as. Of Gem care, they’re a much smaller focused
health plan, they’re in less populated areas. Next we can go to Aetna.>>PRIYA MATHUR: Can you just take off Blue
Shield and HealthNet just so that we’re clear where
>>Yeah.>>PRIYA MATHUR: where Gem care is? It’s just in if SanLuisObispo and
>>Yes, Aetna you can see is it focused in these counties. Let’s pull off Aetna and go to Sharp, they’re
in San Diego county, you might want to put HealthNet back on and see if there’s much
difference there. Not really.>>PRIYA MATHUR: Thank you. Let’s continue.>>We would now like to switch back over to
attachment 1 and walk you through the structure of the RFP providing highlights from the proposals. The business and technical requirements have
14 sections. Could you bring up the business requirements? These are identified as section says A through
Q and the business requirements describe what services are to be delivered and form the
backbone of the 2014 2018 health plan contracts. You will note within the business requirements
that there are certain sections that are highlighted that carried more weight than other sections. Could we switch to the technical requirements? The structure of the technical requirements
mirror the business requirements. The business requirements describe what services
will be provided and the technical requirements described, how those services will be delivered
by each of the proposers. As described in the RFP, the five bolded sections
are identified as sections D, J, K, L and N of the table on this page, either the technical
requirements or the business requirements were weighted more heavily in points than
the other areas in areas. D guarantees adjustments, examines the health
plan’s provision of services for five years and establishes criteria for hybrid funding,
risk adjustment, performance guarantees, competitive pricing, pricing transparency and changes
in administrative service fees. Section J, the provider network section, assesses
the ability of health plans to develop programs that reduce cost, increase network access,
member choice, value base purchasing and minimize disruption as well as other analytics to identify
unwarranted utilization. Section K medical management explores ways
for health plans to not grate care and advance to integrate care and advance reduction cost
strategies. L examines strategies in managing members
with chronic conditions through effective disease management programs. Section N describes how the health plan directs
its rorpses toward an not grated healthcare delivery model through provider risk and gain
sharing arrangements, population health management across the continuum of care and robust electronic
data interchange and electronic health records to support the realtime access of continuity
of care records for providers. Moving to the technical requirements questionnaire
supplement>>PRIYA MATHUR: Can we actually pause, can
we pause for a couple questions, Kathy?>>KATHY DONNESON: Sure are.>>PRIYA MATHUR: Mr.Jelincic.>>JJ JELINCIC: Yeah. Can you talk a little bit about the pricing,
particularly related to Aetna, that blackball kind of stands out in the middle.>>KATHY DONNESON: Can we move back to the
yeah, the technical.>>JJ JELINCIC: It shows up in both the business
and the technical.>>KATHY DONNESON: Yes, it does. The Aetna proposal was not as complete in
certain sections of the RFP and made it difficult to compare with the other plans, so those
are reflected in terms of the scores for Aetna. While the technical requirements and the business
requirements were complete and the scoring could be compared when you get into the technical
supplement questionnaire or the technical questionnaire supplement, that’s when you
start to see some differences in terms of what was provided through the RFP process,
making it either difficult to compare or simply not as complete that would allow us to have
as much information in which to evaluate it. They also cited in their proposal that it
was a fully insured product.>>JJ JELINCIC: Okay. Can you also comment on the systems and data
reporting? H.
>>KATHY DONNESON: The systems and data reporting looked at both the exchange of information
in terms of eligibility and enrollment with our health plans and in terms of providing
data to our healthcare decision support system. The questions around systems and data management
had to do with managing the systems internally. If a plan contracted out that, might affect
the evaluation.>>In Aetna’s case in particular rs we’ll
get to this in just a moment, we did have some concerns about the overall viability
of their underlying technical infrastructure from an ability to transmit and receive data
the way that we expect our business partners to do (Ann Boynton speaking).>>Thank you pri pru thank you. Mr.Jones?>>HENRY JONES: Thank you, Madam Chair. My question is on item D, the pricing. It’s more on the weight as opposed to the
results here, and when you somewhere you’ve said that our members’ priority is premiums,
then when you look at the weighting of pricing it’s only 10%, so it appears to be a disconnect,
what our members say are important and what we’re weighting. How do you reconcile it?>>This item D is not fully reflective of
the overall cost implications of any proposer’s specific proposal to us, so the item D looked
very specifically at performance guarantees, fees at risk, but as Kathy was describing,
in each of these sections, we have embedded the strategies that will help reduce the overall
cost of care for our members, so it isn’t something as simple as you could look at
that and say you’ve only put 10% of whatever the total is on that one, of the points, on
price, that simply is not true. In aggregate, the total amount that we would
say that focuses on those issues that impact price and will impact rate is in excess of
50% of the total available points, so it’s embedded into each of these areas.>>HENRY JONES: Okay, thank you.>>PRIYA MATHUR: Thank you. Okay. Now we can proceed with the technical supplement.>>KATHY DONNESON: Moving onto the technical
requirements questionnaire supplement, this section evaluates the facility, which is the
inpatient outpatient hospital facility discounts as well as primary Medical Group per member
per month costs for basic and Medicare plans. The member disruption examine eps the physician
networks for member disruption should a plan be the only one offered in a county or region. Geographic coverage expansion, which you saw
through the maps, evaluates CalPERS’ members by county and health plan coverage zip codes
as well as physician provider overlap between and across proposers networks. For the meaningful use measure health plans
indicated the primary medical groups associated with integrated health models, which you saw
also on the maps. The membership aattributed to the primary
medical groups as well as the level of meaningful use based on the Institute of Medicine framework
for meaningful use. Health plans in this area were evaluated on
the extent to which IHM’s demonstrate the sophistication of electronic data interchange
between providers to support patient care and population health. The higher levels of meaningful use include
computerized provider order entry, clinical decision support and the realtime interconnectivity
and access for all providers in the care continuum. We do not have a separate slide for the financial
questionnaire, so I would like to go back to the overall evaluation where you will find
the two components of the financial questionnaire. Plans were asked to submit proposalless on
the administrative fees charged during the life of the contract, the cost of healthcare
trend guarantees, the amount of administrative feeps at risk for performance and the level
to which they would agree to 80 performance measures of which 53 of those performance
measures were for the five most heavily weighted areas, sections D, J, K, L and N. And the
amount of feeches at risk for each of the 80 measures. They were also asked to provide a percentage
of their administrative fees that would cover the total performance guarantee component
of the financial questionnaire. All of the plans were given the opportunity
to submit multiple administrative fees and performance guarantees based on CalPERS’ provided
membership ranges. This completes a walk through of the attachment
1, which is the summary of the evaluation scores. Moving on, from these evaluation results,
6 of the 7 proposers seem capable of administering the HMO plans under the scope of the proposed
contract: Anthem, Blue Shield of California, Gem Care, HealthNet, Sharp and United, and
you can see their overall composite score on the HMO evaluation summary. Those plans received a composite score of
above average. Gem Care received a rating of average and
Aetna steefd a rating of inferior.>>If it’s helpful for you at this point,
we would be happy to provide some of our observations of each of the proposers, if that is helpful
to you. If you prefer, we can go onto looking at mapsz
and scenarios and talk about it along the way, whatever your pleasure is.>>PRIYA MATHUR: I think it would be useful
to hear some observations, but before we do that, we have one question from the committee,
so let me just take Ms.Holton Hodson’s question.>>Reurt Holton Hodson: Thank you, Madam Chair. A question on the performance guarantees,
I guess and awls on the administrative fees. When you have below average and average, what
did you consider to be the average point? So if you’re below average, below what? And above average, above what? Was it in relationship with each other? So if you could elaborate on that, that would
be helpful.>>Fees were compared to each other, so an
average is going to be kind of in the middle of a ballpark, and an above average would
be quite a bit lower and inferior would be quite bait more expensive.>>PRIYA MATHUR: Sorry. Let me turn on your mic. Go ahead.>>So when we look at the performance guarantees,
could we actually say that HealthNet, Sharp and United Health essentially gave us the
same performance guarantees?>>Well, there were quite a few performance
guarantees that proposers could agree to and how much they wanted to put onto it, so I
would say it would be similar but not identical.>>And it’s the number of guarantees to which
they agreed, which ones they put actual feeps at risk and the total aggregate amount of
fees at risk, those three elements are incorporated here.>>Right.>>All right. Thank you.>>We would like to cover some highlights
of the proposals that we found from each of our proposing bids, starting with Anthem. This proposer had good experience communicating
to our members about programs and benefits it offers, as well as participating in joint
awareness campaigns on health issues.>>JAMES DEBENEDETTI DEBENEDETTI: It provided
a well rounded proposal with a clear understanding of CalPERS’ business and needs.>>They were very clear in presenting information
about their organization and they were very complete in their presentations during the
on site visit.>>One thing that Kathy already mentioned
was the area of pharmacy, although Anthem looked to carve that out, we believe that
it lacked the supporting information necessary for us to feel comfortable that that would
be a prudent decision to make so that was one of our observe vaiptionz as well.>>KATHY DONNESON: Another observation is
in the area of innovations. We asked during the confidential discussions
that every health plan not just tell us about some of the interesting activities they were
doing around technology, but we wanted them to plink the technology support to the actual
population health management, so you’ll see some differences in innovations that relate
to not just siting new technologies, but we asked the plans to say how that was going
to support the objectives of their proposed the objectives of this RFP.>>Anthem also agreed to all requirements
for pricing performance guarantees and adjustments.>>KATHY DONNESON: Moving onto Blue Shield,
this proposer has good experience in the industry with a strong mix of public and private clients. Blue Shield impressed the evaluation teams
with the number of claims processors that they have for the dedicated CalPERS team. They have shown a clear understanding of CalPERS’
business.>>They also dem strailtd pharmacy retention,
based upon our review I think as Kathy has already indicated we agree with that and they’ve
done an excellent job in being able to document the ability to retain pharmacy.>>KATHY DONNESON: We were also impress wd
their integrated customer service model and enhanced member website functionality. They gave a solid presentation during the
on site visit, the facilities are state of the art, the computer systems are robust and
secure. They did agree to the requirements for pricing
performance guarantees and adjustments. Moving onto GEM Care, this is an IHM, and
it does meet the sort of>>PRIYA MATHUR: When you say IHM, can you
>>KATHY DONNESON: Oh. Not grated health model. Within the proposal, an integrated model links
three components. It links population health management, it
links financial arrangements between the health plan and the providers in terms of risk sharing
and gain sharing, and then it looks at how robust the electronic health record system
is that’s going to support the interaction of the providers in managing our population. So that’s when I say IHM, I’m referring to
those not grated health models and we also have the maps of them. So GEM Care did meet sort of those three components
of IHM. This proposer had good experience promoting
its programs and building awareness of health issues around its membership, and we were
very impressed with the sections K on medical management and health and disease management. There were several innovative programs that
deliver quality pharmacy services under medical management, though GEMCare was not trying
to keep the pharmacy program, so they were willing and it has to do with some of the
requirements that we have around pharmacy management. But they did, pharmacy under medical management
is an area that looks at pharmacy specialty drugs and how the health plan manages the
providers in terms of both specialty drugs for chronic conditions and oncology programs. We did find some areas that we felt we wanted
to raise to your attention in terms of evaluating GEMCare and that is they cited within their
RFP that there would be perhaps revisions needed to their operations. There was also not as much information as
we would have liked to have seen on how GEMCare would accommodate the sizeable addition of
membership, and finally, we observed less automation of some of the customer service
areas, of which there’s both the customer call center use of technology in terms of
serving our members as well as some automation in internal operations. For HealthNet, this proposer has experience
with large group public employers, one of which is flex funded, it has a program in
place to support e prescribing. HealthNet also cited within their RFP that
they were the recipient of the bronze Web health award and they won the gold for their
innovative T2X website. HealthNet’s Smartcare integrated health model
was the highest level of integration of electronic health records, so they’re well integrated,
they are an IHM, they can support population health management.>>DOUGLAS HOFFNER McKEEVER: I just want to
point out also that nothing in the presentation they presented for us resulted (this is Doug
McKeever) resulted in any HealthNet concerns that they identified in the proposal approximate.>>KATHY DONNESON: Moving to Sharp, Sharp
also had a lot of experience that came through in the RFP, in those areas most heavily weighted,
especially areas of an integrated health model and they also had a robust population health
management program for disease management and it was supported by a strong fully integrated
fully electronic health record system. We noted they do not wish to retain pharmacy
but again, the pharmacy under medical management we do require some transparency around rebates
and how specialty pharmacy is managed. Finally for United Healthcare
>>For United, the proposer has many years of experience and good call center metrics
and provides adequate services in those call center department.>>KATHY DONNESON: They also did very, very
well on the on site visit and the team was very I am presmsed with the customer service
components of the RFP.>>Go ahead, Kathy. It’s also worth noting that they agreed to
all pricing guarantees and adjustments as well.>>PRIYA MATHUR: Who was the other one who
wanted to retain pharmacy?>>That was Aetna.>>PRIYA MATHUR: It was Aetna, thank you.>>Yes.>>PRIYA MATHUR: Okay. We have pause for a question from Mr.Jelincic.>>JJ JELINCIC: The first question is about
GEMCare. You said they indicated they may need to make
some operational changes. Should we give them points for honesty? (Chuck lipping), are they simply being realistic
that this is a big group and I think any of the new players are going to have to make
some, or was it really an area of concern?>>Mr.Jelincic, I think it was more of
an area of caution for staff and their review of proposal, it’s not a concern that we would
say that we would not recommend that this board retain them as a viable alternative,
I think the general scoring reflects that. I think what we would do is if you chose them,
certainly we would make it clear that there are some areas we would need to work on to
ensure that they maintain a level of customer service that our existing members are accustomed
to.>>JJ JELINCIC: Then on Sharp, the on site
visit ranking was low. What prompted that?>>KATHY DONNESON: It was the team, when the
team went in to meet, to actually review the facilities and the processes, I think it was
just a lack of information that was conveyed from the teams that were meeting with them
to the teams themselves that were doing the evaluation.>>JJ JELINCIC: Okay. So it wasn’t that they gave us bad information,
it’s that there was a deficiency in the amount of information they gave.>>KATHY DONNESON: It was not as comprehensive
as we would have liked to have seen.>>JJ JELINCIC: Thank you.>>PRIYA MATHUR: Just to clarify around GEMCare
are there any concerns about transition, their ability to actual absorb our members within
the time frame required?>>Doug McKeever: Again, staff identified
that as a cushion ri area in which we want to make this board aware of, certainly if
you all selected them, there would have to be concerted effort on their part to ensure
that they were able to accommodate the members that they would receive in 2014. I think the one thing that makes us feel a
little bit more comfortable is the fact that they are providing care in a very small area,
so the number of folks that may choose to enroll in GEMCare would not be as large as
say some other plan that’s going into a huge urban area where the influx would be much
greater and we would have a much greater concern relative to transitional issues.>>PRIYA MATHUR: Okay, thank you. Mr.Bilbrey?>>MICHAEL BILBREY: Thank you, Madam Chair. Can you tell me or give a comparison of where
we were 20 years ago with many plans then and now with the many plans we’re Looking
at again, what the comparison from them to now is or the difference?>>Doug McKeever: Mr.Bilbrey, I think that
question requires a couple answers. Bear with me. One, the market has changed dramatically from
ten to fifteen years ago to today. Many years ago CalPERS contracted with, I
don’t remember the exact number, but it was in the 20s, small lans like Health Plan of
the Red woots was an example. I think as a result, what happened was many
of those plans just by attrition couldn’t make it, couldn’t survive, so you stawp a
lot of atranscription in the health plan arena. Today the marketplace is shaped by just a
few plans in California, all of which are strong and competitive in their market areas. So that dynamic has changed greatly. And I think the other issue is that today
we’re looking at an not grated model that CalPERS is using as its foundational piece,
so every plan that proposed, that bid through the RFP process for CalPERS had to address
the foundational components of an integrated health care system. So by virtue of that, you’re looking at them,
the health plans, having to partner with providers, the doctors, and hospitals, those provisions
and those partnerships include risk bearing arrangements, both on an up side and a downside,
so that model was not in place years ago as well. So I think you’ve got a much different marketplace. Timing is the key issue. Back then probably the market wasn’t ready
to accept this kind of a dynamic. Today we believe that it is. And we believe it’s going positive infuse
competition, which again was one of the impetus behind the whole procurement process itself.>>Doug, would you also talk about the difference
of risk adjustment versus how we were structured at that time relative to the individual plans?>>Doug McKeever: Obviously ten, fifteen years
ago risk adjustment wasn’t even on the table. Today risk adjustment allows for us to have
let’s say a Sharp, who is a regional player, come in but not disadvantage a larger plan
that looks to cover the state of California as a whole, so you’re not going fof the dynamic
where that one regional player will undercut let’s say by costs so that a Blue Shield or
Anthem cannot be competitive in that geographic location. So the fact we’re look to go risk adjust the
premiums will balance thatout a bit based upon the risk factors of our members.>>PRIYA MATHUR: Thank you. Ms.Holton Hodson?>>Ruth Holton Hodson: One of the things we’re
hoping for through all of this is to ensure some price competition. When we look at what we have before us, what
are the elements we should be looking at so that we can say, all right, this is going
to guarantee some price competition? Or are we just hoping for price competition? That’s my first question. I have another one, too.>>So Ms.Holton Hodson, I think by virtue
of the fact that we are infusing competition into our program is by that nature going to
help us lower costs and I’ll keep pointing back to a lot of the components in the procurement
process that are going to enable us to achieve that. Certainly the integrated model that we’ve
been talking about at length is one of the key areas that we believe is going to allow
for us to lower costs and then more importantly improve the health of our members, which is
really where we want to go in the long run is to get our members healthier and receive
that coordinated level of care not only at the doctor but at the hospital and that the
plan be a part of that coordinated effort. We’ve talked about things like how are we
going to innovate, what are the innovations that plans will bring to the table which will
help us look at other cost saving measures, the focus on chronic and disease management
programs and how the plans along with their providers rar partners will enable our members
to be guide through a coordinated care program so their care is more well taken care of,
all those things will lead to, we believe, lower costs. I think the key, I think Ms.Boynton touched
on this earlier, is that we have to remember we’re in a three to five year plan, these
contracts are for five years. There’s a full recognition that in the first
year we’re not going to receive tremendous savings out of this particular effort but
based upon the direction that this board has provided to us as staff to go, we believe
over the next three to five years as we implement all these initiatives, we’ll see that cost
trend bend downward.>>PRIYA MATHUR: Did you have a second question,
Ms.Holton Hodson?>>So I appreciate that many. So ideally we want the members to go into
the IHM’s because we think that’s actually the case it’s going to be more competitive
and then create better quality. How are we going to do that? If they’re in plans already that they like,
are we going to have some kind of communication or any incentive for our members or do we
just present the water and then hope they see the light and go, I’m going on change
my provider because this is going on provide me better quality of care and I’m going to
be healthier? My concern is that there were a lot of members
who like it just fine where they are so what sort of incentives and what are we asking
the plans to do to reach out to educate the members that in fact they’re going to get
a better quality of care if they go into an IHM than if they stay where they’re at?>>So we haven’t yet tackled what will the
open enrollment materials and strategies look like this year, but you’re right, it’s through
that open enrollment process and what we allow the plans to do on an individual marketing
basis in specific areas, what material is provided no our members as open enrollment
approaches, those are all what are we telling employers, who are an incredibly important
element of our ability to reach into their strategies and get the employers engaged well
and appropriately and helping their people make wise decisions about which plans to use
and understanding what the cost implications are to those employers themselves who have
also a very vested interest in driving these kinds of things. So we don’t today have an answer of exactly
what our open enrollment strategy communication and marketing strategy is going to be.>>PRIYA MATHUR: Okay. Mr.Boyken?>>Thank you. Mr.McKeever you mentioned that the market
today is different than it was when we first decided to consolidate plans and then that
the goal of the RFP process was to try to get competition among the plans and Treasurer
Locke agrees, to take all proposals. Your recommendation would be to take one statewide
tworks one in the north, two in the south, I wondered if you would comment on would you
women against two statewide and more regional plans and then are there administrative difficulties
that that might pose as well?>>So Mr.Boyken, let me answer the question
two ways. Let me take the first one, and is staff would
not in any way preclude this board from choosing something other than what we recommended in
the agenda item. So it was a way to start the discussion relative
to what we think the coverage ought to be, but certainly that does not preclude you from
doing something different than that, if you want to add more, let’s say. Relative to the administrative complexities,
certainly the more plans that are selected for staff will result in a little bit more
work for us, but certainly that is not going on preclude us from implementing whatever
direction this board decides to go in for 20 sh. We’ll gear up and we’ll be able to work through
those efforts (correction, go in for 2013) in a manner in which we’ve done for the past. I don’t see that as a means to say you should
decide one way or the other based on the complexities and the challenges that staff will face.>>Grant Boyken: Thank you.>>PRIYA MATHUR: Ms.Holton Hodson.>>Ruth Holton Hodson: Another issue that
has been raised is the issue of the dilution of the membership. How would you recommend us taking that into
consideration whether we do all of them, some of them? Is there a sweet spot, if you like, in terms
of what you think the dilution rate is? Because it’s my understanding, you know, as
providers are competing, if they’re not getting a whole lot of members, that’s going to affect
their interest.>>So I think there are a couple aspects to
that question. The first is that on balance, although there
is no doubt significant honor perhaps in carrying the CalPERS account, in all of our conversations
with providers, powsd of a very small geographic region, Sacramento, maybe some aspects of
the Bay Area, the providers have fold me that really we don’t have enough membership to
sway an individual negotiation for them. So we don’t think from that perspective that
there’s a significant cost disadvantage to us, the rates that we would get by changing. Relative to how many plans overall, that is,
that, you know, I don’t know that we can tell you definitively we think that four plans
is too many or that five plans is too many, one of the sphak tors weighing on us one
of the factors weighing on us saying pick one of those that serves more than 33 counties
is trying to balance the statewideness of things and still allow enough room so that
where the membership is not terribly significant, that there would be competition, but we aren’t
too heavily diluting the market. But, you know, it could be that we could take
all the plans and that would be fine toovment it’s a new world for us to be entering into
in trying to assess what’s the exact right number of plans for us to have.>>One way for us to get at some of the overlap
questions I think is to look at the maps again, which I think we’ll have an opportunity to
look at the maps again with various combinations as the committee would like to look at. We have one more question and then I’ll let
staff proceed. Mr.Jelincic?>>JJ JELINCIC: Following up on Ruth’s point,
how does risk adjustment fit into where that sweet spot might or might not be?>>So the intent with risk adjustment is that
once this committee and the board provides staff with the direction on who we’re going
to contract with for 14, staff will immediately, and I mean that with all sincerity, tomorrow
afternoon, begin the actual rate negotiation process for 2014. We’ll be diligently working with all of the
selective plans for ’14 including them understanding the methodology for risk adjustment and then
we’ll be bringing back to the committee in May the initial rates proposed by those plans
with the risk adjusted factors included. So you all will see that for the first time
in May, we’ll then have a conversation about that and bring back the finals in June.>>JJ JELINCIC: One of the concerns is that
historically by going to all these different plans, we’ve broken it up, and you can tell
me this was cloamsed session and you can’t answer it, if it was, but one of the arguments
for the risk adjustment was that it essentially treated us all as one big plan and so wouldn’t
that almost say it’s immaterial how many plans we have? Other than having to deal with sending out
numerous>>Doug McKeever: We shared a session a couple
months ago the risk methodology and the process moving forward and we did, if you recall,
let you know that the perspective has been to date that CalPERS 1.3million members,
we can leverage that as a pool to negotiate rates when in fact today we actually have
separate and distinct risk pools based upon each individual plans, and that includes plans
within a plan, you have Blue Shield plans, each rated separately within its own structure,
so your concept is correct, we could take all the PPO and HMO members, pool them together
collectively, and then risk adjust the premiums across the board, so regardless of the number
of plans, we would take that into consideration anyway.>>JJ JELINCIC: Nah.>>PRIYA MATHUR: All right.>>We are now asking the committee to review
the evaluation results and maps in the order of the agenda item recommendation, that is,
to look at the 33 or more county, those plans offering 33 or more counties, of which that
is Anthem Blue Cross and Blue Shield of California. We can also toggle between both the evaluation
summary or any component of the evaluation to the maps. So this is interactive, as James said, so
we’re going to start with the maps and start with two proposals for 33 or more counties.>>PRIYA MATHUR: So how we would like to proceed,
just to clarify, is that we would like to take the statewide for the 33 plus counties
first, make a motion of one or both that we would like to include as plans, and then we’ll
move onto the north, and then we’ll take a motion on whichever additional plans we would
like to include for the north and then move onto the south and we’ll take motions on whichever
plans we would like to for the south.>>KATHY DONNESON: Yes. As you consider this first question of statewide,
I will note that Blue Shield of California did provide two separate financial proposalless
as they were permitted to do (this is an Boynton speaking) one in which they would retain an
exclusive contract with CalPERS and remain the only nonKaiser HMO plan available in the
state, the second where that would not be the case, and there was some variation in
pricing and performance gearn tease as a result of that. So as you go into this, this contemplation,
I wanted to make sure that you I know that was in the front of you as one potential choice.>>PRIYA MATHUR: Yes. Thank you. Thank you for that clarification. Mr.Jelincic?>>JJ JELINCIC: Can you make it clear what
we have actually asked them to bid on? We’ve talked about a fully insured plan. We’ve also talked about a sort of self insured
plan but really not self insured because in order to be an HMO they actually have to be
at risk, so what did we actually ask them>>ANN BOYNTON: Thank you for the clarification. As urn, a significant portion of the HMO costs
are in fact paid on a fee for service basis. What we have asked the plans to provide, unless
they are bidding a true full capitation model, where they aren’t paying fee for service,
they aren’t paying for services in hospitals, for example, on a fee for service basis, if
they are willing to provide a global capitation, they could do that. Otherwise, we ask that they provide us with
a flex funding arrangement that allows us to retain, to hold onto some of the money
while services are being provided and we then reimburse them. All of the plans, with the exception of Aetna
and Sharp, provided hybrid funding arrangements. Sharp is proposing what is an almost 100%
cap. And GEMCare has a global cap as well, it would
be more efficient if she just said it instead of writing it down then making me read it,
whispering it.>>JJ JELINCIC: So even in the flex funding,
they are full lift on the hook for it, it’s really a question of
>>ANN BOYNTON: Yes.>>JJ JELINCIC: of if they don’t spend as
much, we’re hanging onto the cash.>>ANN BOYNTON: We’ll work thoishz use out
in negotiation, but>>JJ JELINCIC: If spending more accident
it’s out of their pocket.>>ANN BOYNTON: They are subject to full integration
of the management of care and complying to all aspects of the act and full bearing of
the risk.>>JJ JELINCIC: Thank you.>>PRIYA MATHUR: I think before we enter the
territory where motions might be offered, it’s probably appropriate for us to take public
comment. And if anyone who I call wishes to defer public
comment, that’s totally fine, but as I said, we’ll be taking up the statewide or the 33
hive plus counties first 33 plus counties first, then the north, then the south. So I’ll call on those who have indicated they
wish to speak. First up is Darrell Cardoza from Hill Fipsz,
then March sprin oh Quinn, then Marvin oh Quinn from Dignity Health, then Paul Marcovitch
from Blue Shield of California. First Darrell Cardoza and if everyone could
make their way to the front.>>I would like to make a short statement
before we receive public comment.>>PRIYA MATHUR: Okay.>>Under the Bagley Keen open meeting act
members of the public have an opportunity to dreaps the body on a particular agenda
item during consideration of that item. A number of people have requested to speak,
including those who might have a financial interest in the contract, in particular I
understand Mr.Marcovitch of Blue Shield has asked for an opportunity to speak as well. Blue Shield of course is a bidder in the RFP
that is the subject of this agenda item of the the committee has decided not to conduct
interviews as part of the RFP process, which is of course entirely consistent with the
RFP. Therefore, I caution both the speaker and
the committee that whatever public comments are given they should not be considered a
part of the RFP process. These comments should not be considered to
modify, amend, delete from, supplement or otherwise inform the bids that have been submitted
by each of the bidders. Instead, they should be considered what they
are accident public comment.>>PRIYA MATHUR: Thank you for that caution,
that’s have taken. Okay. So Mr.Cardoza, you’re up first. If you could identify yourself and your affiliation
for the record. Each speaker has three minutes.>>Thank you. My name is Darrell Cardoza, I’m the CEO of
the Hill Physicians Medical Group. I’m prepared to go on if you would like. I would prefer that Mr.Marcovitch go first
if that’s okay with you.>>PRIYA MATHUR: That’s fine, why don’t we
pause, restart the clock. I’m sorry, we have a question from the committee. Mr.Boyken?>>Is our general counsel available again,
Peter? I just wanted to clarify based on what you
said, I don’t know how we can separate the comments from the RFP. So was your advice to let Mr.Marcovich
speak?>>Peter Mixon: Yes, I think that there is
a tension between the open meeting act itself and the RFP process, and so the open meeting
act I think is relatively clear, that members of the public shall be alowferred the opportunity
to speak. Mr.Marcovich is of course a member of the
public, so he has a right to come up and address this body. However, there is a process that’s discrete
and that is being governed by the RFP and my caution to this committee and frankly to
the speaker is that whatever comments are given should be considered just that, comments. They’re comments from the public, not part
of the bid that was submitted by Blue Shield as part of the RFP process. So whatever comments are made, they should
not be construed by this committee to modify that bid or amend it or supplement it or inform
it. There is a process that was laid out in the
RFP for handling those kinds of issues.>>Grant Boyken: Great. Thank you.>>PRIYA MATHUR: So the committee lnlt consider
any of the comments made by Mr.Marcovich in the deliberation or determination of the
selection of plans.>>Peter Mixon: That’s correct.>>PRIYA MATHUR: Ms.Holton Hodson did you
want to speak now?>>Ruth Holton Hodson: So just for clarification,
is it appropriate or not appropriate to ask questions?>>Peter Mixon: You know, I think that’s within
the discretion of the committee in terms of asking questions, or the committee member,
but again, the add Monday nition still goes the admonition still goes, and I think if
those questions go to the bid that was submitted by Blue Shield, you’re moving into territory
where someone could infer approximate that those facts that are given in response to
that question would otherwise modify or supplement Blue Shield’s bid.>>Thank you. That’s very helpful. Okay. So do you want to take it up in a different
order, Mr.Marcovich, did you want to speak first? That’s fine. If you could turn on your microphone and then
identify yourself for the record and your affiliation and we’re limit it go to three
minutes. Thank you. You’re on.>>Madam Chair, members of the committee,
I’m Paul Marcovich, president and CEO of Blue Shield of California. First I want to thank you for your business. I’ve had the honor of serving you for 11 years
and I hope to continue doing so upon completion of this process. You have a choice between staff’s recommendation
to reject Blue Shield’s statewide proposal and instead offer multiple network HMOs or
continue to contract ex cleuf civil with just one. Let’s compare the two options. In the bid process, Blue Shield offered the
following to remain CalPERS exclusive network HMO, medical trend, ex ex cleuding pharmacy
costs of 3% of 2014 as represented by the blue bar and 2.8% in 2015 as represented by
the green bar, for 42 counties, four more than currently contracted, backed by $200million
of performance guarantees including 100% of our fees at risk in the first year with no
member disruption. How does staff’s recommendation compare to
this? Does it provide lower total medical or premium
trends? We don’t know because staff has stated in
their memo that it is not possible for them to develop a single overall cost factor in
evaluating proposals and that they have not had the opportunity to test and validate the
proposer’s assumptions concerning potentially significant cost drivers. Therefore, on the one hand, you ever Blue
Shield’s proposal with a two year medical trend guarantee which is $170million less
than your stated goal of CPI plus 3% as represented by the red bar as compared to a scenario in
which the total medical trend is unknown. I’m also perplexed by the confidence you have
for the feel about what the costs would be in the multiple HMO option because we submitted
the data and participated in the meetings you’re referring to and sitting here today
I have no idea how we might price a multiple HMO option. Does it provide broader geographic reach? No. The combined geographic service area of the
other HMO bidders has eight fewer counties than Blue Shield has. Is there less membership disruption? With Blue Shield there’s no membership disruption
and with staff’s proposed snairp yoa it is again unknown. I personally and Blue Shield as a company,
weapon put our hearts and souls into giving you an offer that makes healthcare sustainable
affordable (we put our hearts) approximate CalPERS beneficiaries and California taxpayers
are under tremendous from stress and do not play their healthcare bills with Harvey Balls,
they pay them with healthcare dollars and those dollars are scarce. You’re about to award a $14billion contract
or contracts.>>PRIYA MATHUR: Sorry, your time has expired.>>Thank you.>>PRIYA MATHUR: Sorry. (Pause).>>Good afternoon rgs I’m Darrell Cardoza,
chief executive officer of the Hill Physicians Medical Group. We’ve been working in what you call an IHM,
we call an ACO. In Sacramento with Blue Shield, Hill Physicians
and Dignity for the past three years, we’ve saved $59million during three years serving
42,000 members in Sacramento. This is required collaboration among the parties
focus and innovation, it is definitely not business as usual. ACO’s or IHM’s are easy to talk about and
describe. You can go to a conference and hear about
them. I can tell you they’re very difficult to do. It is definitely not business as usual. We were 18 months in the planning and now
fourth year in execution. We’re still learning shes we’re still improving. What I want to emphasize to you is the enabling
environment created by CalPERS has been instrumental in making our ACO effort successful. Appearing gating the population is key. Critical mass 42,000 in Sacramento has been
critical to us working with one health plan who can provide reliable data and support
and collaborate with us in the effort. We’re managing 625 physicians in Sacramento
in this ACO, managing them to adhere to population management policies required to achieve the
results that I cited above. Execution requires large population going
flew our practices. Consistency is key. Practices need to see multiple CalPERS ACO
patients every day, not a few per week. So my plea to you is please maintain the enabling
ingredients you’ve provided us that have led to this very successful ACO in Sacramento. Please keep the population aggregated. Allow us to continue to build on our results
with our ACO partners, Dignity and Blue Shield. Blue Shield has developed the experience and
know how to replicate the ACO program throughout the state. I hope you’ll maintain your policies that
will enable them to do it and permit us to continue our work in Sacramento to build on
the results produced thus far. Thank you very much.>>PRIYA MATHUR: Thank you for your comments. Mr.O’ Quinn?>>Good afternoon. I’m Marvin O’ Quinn, chief operating officer
for Dignity Health, I want to make a few comments and I don’t want to be redundant with what
Mr.Cardoza has already said so I’m going to Elm fa stiez a few of those points because
I think they’re critical to your decision make and go they speak to the point raised
earlier which was the issue of dilution. Consolidation of 42 members in a single health
plan population in a narrow network is the key enabler fowps at Dignity Health and our
hospitals to be able to leverage our resources of time and our leadership and our unique
healthcare management structure and bring that to bear against managing to care for
this population. Over the last several years, we have reduced
hospital length of stay, admissions and we have reduced readmissions. The cost of healthcare savings based upon
the integrated Health Network’s premium trend versus the premium trend prior to that, we
have seen a savings for you, as Mr.Cardoza mentioned, of $59million, equating to an
average annual savings to you of roughly 10%. But with 42,000 members in the Sacramento
IHM on average, on an average day, there are 16 Blue Shield primary CalPERS patients in
four of our hospitals in Sacramento. That’s not a very large number, and further
dilution would make it very difficult for us to continue to do the same types of things
we’ve done before with a much smaller number than that. As another example, in July2012, Dignity
Health Domincan hospital, in Santa Cruz, launched an IHM with Blue Shield and the Physicians
Medical Group in Santa Cruz that serves about 5,000 CalPERS members, that Santa Cruz savings
based upon reports from just the first six months are $120 per member per month or an
estimate of $7million per year, that’s just in the beginning of this project, and
again, that’s because of the aggregation of members into one institution. So if we go further into a different direction,
as you’re thinking of and has been recommended, I believe that the dilution that would occur
from that will affect, prevent you from seeping the continuation of the types of savings trends
that we have been able to provide for you, and obviously we would like to continue to
provide them for you. We think it’s good for your population. It’s actually good for us to change the way
in which we deliver care. The relationship that we have established
in Sacramento has gotten national attention for the ability for a health plan, a group
of physicians, and a hospital system to actually lower costs and improve health in a concentrated
population. Thank you.>>PRIYA MATHUR: Thank you for your comenlts. Right on the button, three minutes. Mr.Brennan?>>Good afternoon. Terry Brennan on behalf of service employees
international union, let me state first of all, I have zero financial interest in this
decision. My members, however, have a considerable financial
interest in this decision. Thank you to the chair and the president of
the board for putting together a meeting with some of our folks and staff, and at that meeting
Ms.Holton Hodson, we had almost identical questions to those you asked, and I’m going
to keep this brief, clearly only three minutes, because I’ve submitted a letter for the record,
but we got virtually the same answers. There are two very big leaps of faith here,
that one, competition will happen if we create this regional system. I’ve seen zero evidence to demonstrate that
that’s true. None of it’s been provided by staff. None of it’s been provided by any empirical
study that has been shown to me. In fact, the only study I’ve seen demonstrates
that the other leap of faith, which is this, you know, cost rating I’m sorry, risk adjustment,
is going to solve all the problems, and which, in fact, has demonstrated, based on the CalPERS
population, that there will be a 45% variance from one region to another potentially under
the proposal they’re showing. So given that and my members’ concern for,
you know, the two things they care about were the pricing and I don’t want to talk about
the Bacci balls and all that stuff, whether there’s pricing built into that, I think the
chairs made a point that’s your number one goal. The other major issue of my members is not
the approximate dilution of the populations for the health plans but the disruption in
their care. The fact that they may have to choose a new
provider, and under this model, I don’t see a plan for preventing them from having disruption. Certainly unless it’s an absolute financial
incentive whereby their old plan is so much more expensive than a new one, they have topping
to the regional plan, and I think that’s not a justice. So I’m asking you to think about this very
carefully because it’s going on last five years. And I don’t know about the posters that were
put up here, whether they legally informed the decision, they certainly informed me. I know more about things than I did before,
and I would ask you to seriously think about these two leaps of faith you’re making with
very little information. Thank you.>>PRIYA MATHUR: Thank you for your comments. Okay. Well, I have that Dr.Diehr wishes to speak,
but he has left the room. Is he back? You’re up. Ready?>>GEORGE DIEHR: I’ll pass.>>PRIYA MATHUR: You’re going to pass? Okay. All right. So at this time, we have the map before you
of the overlap between or the coverage areas for Blue Shield and Anthem. What is the pleasure of the committee?>>And of course if there are layers or if
you would prefer to see the IHM’s, just let us know what you would like and they can
I can’t, but we can make things shaded differently and change so it’s more or less transparent. So whatever is helpful to you.>>PRIYA MATHUR: Thank you. Mr.Feckner?>>ROB FECKNER: Thank you, Madam Chair. I appreciate all the hard work that staff
has put into this. I know it’s been months and months and hours
and hours ff time and effort put into this. I just still am not convinced that we’re going
to do a benefit to the members. I understand there is a lot of options out
there, a lot of choices that some members may benefit from, but on the flip side, I
think there’s options out there that members are going to be harmed by, and I don’t want
I as one board member, I’m not prepared to make that change, so if a motion is in order,
I would move that we continue with an exclusive contract, one statewide bid.>>With Blue Shield, thank you.>>PRIYA MATHUR: Is there so the motion,
Mr.Feckner, needs to you have in front of you a form of a motion, and there’s
(Speaker away from microphone).>>PRIYA MATHUR: But there are certain elements
of this motion that need to be incorporated into your motion. (Speaker away from microphone).>>So then the motion would just would
award an exclusive contract would be the way that that should be worded.>>PRIYA MATHUR: Maybe if you could read the
motion ask just add an exclusive contract to the first line. Oh, sorry. I need to turn you back on. I apologize.>>Thank you. I move the economy recommends a CalPERS award
exclusive contract with quk for motion 20126334RFP to Blue Shield, two plans, fully insured and
self funded plan, this award is at the discretion of the board as authorized by section V 11. F .1 of the RFP and subject to successful
negotiation of terms and conditions satisfactory to CalPERS, should negotiations with Blue
Shield not be successful, the board may based positive an exclusive discretion as authorized
under section V 11. F .1 of the RFP direct staff to negotiate
with other proposer or proposers regarding proposals that meet the needs of the board. Those plans will likewise be comprised of
two health benefit plans, fully insured and self funded plan.>>Second.>>PRIYA MATHUR: Motion has been made and
seconded. On the motion?>>I would like to insure that the committee
is aware of some of the parameters that have been provided to us, as described include
an increase in the administrative fees, so I want to make sure that you understand that. I can’t provide details in Open Session if
you wish to adjourn into closed, we can talk about those things. But just so it’s on the record.>>PRIYA MATHUR: Thank you. That’s helpful. Dr.Diehr?>>GEORGE DIEHR: Well, I’m opposed to the
motion. I say that I’m in favor of having another
extreme where we have a whole large number in every area, but we have some interesting
smaller regional plans that have bid and I believe that they should be able to, and if
we do this, that excludes, that’s it, right?>>Yes.>>GEORGE DIEHR: In fact we’re done.>>You’re done for five years.>>GEORGE DIEHR: Yeah. So for that reason, I would vote no.>>PRIYA MATHUR: Mr.Jelincic?>>JJ JELINCIC: Well, being done for five
years is appealing. (laughter).>>No, we still have to do rate negotiation
and contracts every year.>>JJ JELINCIC: So we’re not done for five
years. When we set out on this course, we decided
what we really wanted to do was crest the competition. Now, whether we should have set out on that
course or not, we can clearly debate, but the truth of the matter is we did set out
on that course, so I really think if we believe the competition is going to in the long run
hold our prices down, and I actually agree with the treasurer, we need to throw it open
to all the qualified people, so I’m going to oppose the motion. We either believe the competition works or
we don’t, so we made our bed and at some point I think we lie in it, and if we’re wrong,
we will pay the price and make a different bed next year or five years from now.>>PRIYA MATHUR: Thank you. Mr.Boyken?>>Grant Boyken: Question on process. If I made a substitute motion to make the
Blue Shield motion nonexclusive would I also have the opportunity to make a motion on Anthem
for statewide as well?>>PRIYA MATHUR: Yes. We’ll take up each motion separately. We’ll take up each plan separately.>>Grant Boyken: Then I would make that motion
to make a substitute motion that the Blue Shield be nonexclusive.>>Second.>>PRIYA MATHUR: Motion has been made and
seconded. Scuption on the motion? Mr.Slaton? I’m story, I just turned you off are by accident,
I apologize. Hit your button again. Thank you.>>BILL SLATON: Thank you, Madam Chair. Actually now I have to keep track of the motion,
so the>>PRIYA MATHUR: The motion on the floor is
for a nonexclusive contract.>>BILL SLATON: Nonexclusive and I would encourage
the committee to support that motion although I differ with the treasurer regarding how
open it maybe should be. I think to me, you know, it’s phrased as competition,
but from this one board member, I’m looking for innovation, and we’re Look for the ability
to have and we’re looking for the ability to have creative minds look at this to try
to bend the cost curve and I think from all that I’ve read and all that I’ve seen that
staff has done, that seems to be the objective to do that. And the only question really is how much dilution
impact do you get that might quash other innovation? I think that there’s a path here of incorporating
additional players without creating a great deal of dilution that can give us some of
that innovation and start to see other creative approaches that could be done to get the cost
down for everyone, so I would encourage a vote on the new or substitute motion.>>PRIYA MATHUR: Thank you. Any further requests to speak on the motion,
the substitute motion that’s before us? Seeing none, all those in favor please say
aye.>>Aye.>>PRIYA MATHUR: Those opposed?>>No.>>PRIYA MATHUR: Please record two no’s, Mr.Feckner
and Mr.Bilbrey. Motion passes. Okay. So is there any further requests on the statewide
or the 33 plus? Ms.Holton Hodson.>>Ruth Holton Hodson: Should we I don’t
know what the appropriate process is here, but then we have the choice of Anthem and
I mean>>PRIYA MATHUR: So we’re still on the 33
plus county options, so we just did Blue Shield. There’s also Anthem as another option. So if someone wanted to make a motion to accept
Anthem as a plan, that is an option at this time.>>Okay.>>PRIYA MATHUR: Mr.Boyken?>>Grant Boyken: I would like to make that
motion then if it’s in order. I move that the committee recommends that
CalPERS award a nonexclusive contract as a result of request for proposal number 21
or 2012 6334, the RFP, to Anthem Blue Cross, Anthem Blue Cross is comprised of two health
benefit plans a fully insured plan and a self funded plan. This contract award is at the discretion of
the board as authorized by section VII.F .1 of the RFP and subject to successful negotiations
of the terms and conditions satisfactory to CalPERS. Should negotiations with Anthem Blue Cross
not be successful, the board may, based on its exclusive discretion, as authorized under
section VII.F .1 of the RFP direct staff to negotiate with other proposers regarding proceed
poasmless that meet the needs of the board. Those plans will likewise be come priemsed
of two health benefit plans, a fully insured plan and a self funded plan.>>Second pri pr motion has been made and
seconded. Any scuption on the motion? (this is Priya
with Mathur speaking)? Ms.Holton Hodson?>>Ruth Holton Hodson: I think the controller
is concerned that since Anthem already hatches the PPO contract that we think it is appropriate,
sort of creating competition within itself, let’s we would support simply having Blue
Shield have the statewide contract.>>PRIYA MATHUR: Okay. Thank you. Any further discussion on the motion? Mr.Bilbrey?>>MICHAEL BILBREY: Thank you, Madam Chair. While I would prefer that we were with a single
entity, I believe, though, two statewides as opposed to the regional plans, I could
live with, and I think that it will get to the competition that we are all talking about,
but I am not convinced with the regional plan, so I will vote for your motion, Mr.Boyken,
but on the regional ones I lnlt vote yes.>>PRIYA MATHUR: I see no further requests
to speak on the motion before you, all those in favor say aye.>>Aye.>>PRIYA MATHUR: All those opposed?>>No.>>PRIYA MATHUR: I’m not sure I heard a majority. So let’s do a roll call vote. (Pause) are.>>PRIYA MATHUR: Okay. Now you can vote. Motion passes. Okay. So now moving onto northern California.>>So if we can get back into so we know
there were the two, and then United now is displayed.>>PRIYA MATHUR: Are there any questions or
discussion? Oh, sorry, I switched where I am. Ms.Holton Hodson?>>Ruth Holton Hodson: So a question on northern
California. You showed us the maps with the IHM’s. How many of the not just the IHM’s, but how
many of the how much overlap is there on the providers, particularly, say we didn’t
break it down, did we, between hospital or did we? Are they all contracted with the same
>>We’re looking for that information. Pri okay. While James is looking for that, can we come
tbook your question? So let’s move on to Mr.Jelincic.>>JJ JELINCIC: Well, being the color blind
one, as I look at this chart, the darkish red or magenta or whatever that is, that is
where all three are available?>>Yes jell gem and the little bit in El Dorado
and I don’t know what.>>JJ JELINCIC: And the little bit in El Dorado
and the other one near Tahoe.>>Placer.>>JJ JELINCIC: Oh.>>Zoom in a little bit. Can you take off Anthem and Blue Shield, please? (Pause).>>Then Mr.Jelincic, is there one you would
like to lay over that to see?>>JJ JELINCIC: Well, why don’t you lay Blue
Cross first. Okay. And then Shield. Okay. So up in Placer, the little part of Placer
would be covered where it’s not covered by any of the other two, and other than that,
it’s a complete overlap.>>Yes.>>PRIYA MATHUR: I think it would be illustrative
to see the IHM’s as well.>>Okay.>>Going on counts, there, it’s not a large
amount of additional physicians that are brought in.>>PRIYA MATHUR: By United?>>Right.>>PRIYA MATHUR: This shows the integrated
health models by plan, and you can see there’s a little bit of different coverage for United
Health in terms of the integrated health models, particularly in Marin and Sonoma and Lake
Counties.>>Again chrks one is United Health?>>Let’s take off the other two so we can
just have United on there. Then add in Blue Shield.>>Can I ask, what’s the difference between
a dot and a triangle?>>One is the hospitals, the others are the
locations of the physicians.>>Okay.>>And then Anthem?>>PRIYA MATHUR: Anything further, Mr.Jelincic?>>JJ JELINCIC: No.>>PRIYA MATHUR: Okay. Ms.Holton Hodson?>>RUTH HOLTON-HODSON: So the maps are interesting
because you said that the providers are there’s a significant overlap in the providers,
so some of those providers, it suggests to me, have contracts to be IHMs with some of
the plans and not others? Is that correct, or how is that how does
that work?>>Yes, there are cases where IHMs will contract
with different providers I mean with different plans, and sometimes you’ll have three or
four plans with the same IHM and other times multiple plans lnlt have the same IHM’s. It kind of depends on the mix of plans and
the location, so we would have to sorry, did you have another question?>>RUTH HOLTON-HODSON: So if I am a member
and I happen to be in Shield but I’m not in Hills Physician, for example, but my provider
happens to be an IHM for in this case, what would it be, United Health, what do I do? Am I a shield person or am I supposed to because
now I’ve decided an IHM is a good model, am I then sort of decide I need to switch my
plan? I’m just triepg to get a sense of how does
this work on the ground with me as the member?>>Yeah, it would depend on how far the IHM
is structured with the health plan in the Medical Group. In some cases you may not need a change of
plan. In other cases you may. It’s really a case by case basis.>>RUTH HOLTON-HODSON: So it would be sort
of based on my decision that I would prefer to be in an IHM rather than the provider snr
because under one scenario, it looks like I would get this sort of IHM services and
in another scenario if I’m in a different plan, I just get the regular services.>>Right, it depends on the provider and the
plan.>>RUTH HOLTON-HODSON: Okay. Thank you.>>PRIYA MATHUR: Dr.Diehr?>>GEORGE DIEHR: Madam Chair, I’m ready to
move to southern California. (laughter).>>GEORGE DIEHR: Actually, I don’t have to
>>PRIYA MATHUR: You live in southern California.>>GEORGE DIEHR: And tomorrow at this time,
Southwest willing, I’ll be there. But is it appropriate, if we want to, we could
always come back to northern California, but I would like to move
>>PRIYA MATHUR: Well, we have a couple of other members of the committee who still wish
to speak on northern California. So you could make a motion to closed toed
on northern California, but make a motion to closetoday on northern California but
I would suggest we continue.>>GEORGE DIEHR: Well it affects the order
something happens to, right? If somebody only wants two and then they
so I think it would be I guess I think it would be appropriate to make a motion on
southern California at this time.>>PRIYA MATHUR: What motion?>>GEORGE DIEHR: To move Stharp as a southern
California provider, HMO. That doesn’t preclude subsequent changes in
the north, but>>PRIYA MATHUR: Okay. Well, we I think we should just there’s
two more individuals who wish to speak on northern California. I don’t think that’s going to impact
>>GEORGE DIEHR: Yeah, if somebody wanted to limit it to three in southern California
and they put another one into southern California now, that would that might preclude. It doesn’t preclude Sharp, but I think the
order that it’s done may change things, I guess that’s my point.>>PRIYA MATHUR: Okay. So
>>GEORGE DIEHR: But I’ll defer, just keep me requested there and
>>PRIYA MATHUR: Okay.>>GEORGE DIEHR: Put me after where was
I?>>PRIYA MATHUR: That’s fine.>>GEORGE DIEHR: Okay. Go ahead.>>PRIYA MATHUR: Okay.>>GEORGE DIEHR: I’ll wait.>>PRIYA MATHUR: Mr.Jelincic?>>JJ JELINCIC: I’m going on make the motion
to include the United Healthcare.>>PRIYA MATHUR: To include United Healthcare?>>JJ JELINCIC: Yeah. I move all these words with
>>I second.>>JJ JELINCIC: With United Healthcare in
there. (laughter).>>JJ JELINCIC: Now, if that doesn’t work,
I’ll read it, but>>PRIYA MATHUR: Do you want me to read it
for the record?>>JJ JELINCIC: I’ll read it. I move that the committee recommend ps the
CalPERS award a nonexclusive contract as a result of request for proposal number 2012
6364>>PRIYA MATHUR: 6334.>>JJ JELINCIC: 6334, sorry about that, the
RFP to the United Healthcare, United Healthcare is comprised of two health benefit plans,
a fully insured plan and a self funded plan. This contract award is at the discretion of
the board as authorized by section 8FI or 8F1 of the RFP and terms and conditions satisfactory
to CalPERS. Should negotiations with United Healthcare
not be successful the board may, based on Italy exclusive discretion as author iced
under section VIIF one, I guess the other one was seven F2 not 8, to negotiate staff
with other proposers regarding proposals to meet needs of the board, these plans will
likewise be come priemsed of two plans, fully insured examine a self funded plan.>>PRIYA MATHUR: Second to the motion? Seconded by Mr.Boyken. On the motion, Dr.Diehr.>>GEORGE DIEHR: No.>>PRIYA MATHUR: No? Okay. Any discussion on the motion? I guess you’re still on, Mr.Jelincic.>>JJ JELINCIC: If we believe in competition,
we believe in competition and we ought to include it.>>PRIYA MATHUR: Okay. Any further discussion on the motion? Seeing none, all those in favor say aye.>>Aye.>>PRIYA MATHUR: All those oppose snd.>>No.>>PRIYA MATHUR: I think we kneed a roll call
vote. I again did not here a clear majority. Hmm, I guess I need to vote. All right. Motion passes. (Pause) moving onto southern California. Let’s pull up those maps.>>These are the three plans that you approved
in the north so we just laid them on here and we can pull them off however you want
to look at plans.>>PRIYA MATHUR: Okay. Dr.Diehr.>>GEORGE DIEHR: Well, I move that the committee
recommends that CalPERS award a newborn exclusive contract as a result of RFP number II012 6334
the RFP to Sharp. Sharp is come priemsed of two health pen fit
plans, fum li insured and self funded plan, this award is at the discretion of the board
as authorized by section 7. F .1 of the RFP and subject to successful
negotiation of terms and conditions satisfactory to CalPERS, should negotiations with Sharp
not be successful the board may based on its exclusive discretion as authorized under section
7. F .1 of the RFP direct staff to negotiate
with other proposers regarding proposals that meet the needs of the board. Those plans will likely, likewise be comprised
of two health benefit plans, fully insured plan and a self funded plan.>>PRIYA MATHUR: Is there a second to the
motion? Sekded by Mr.Jelincic.>>GEORGE DIEHR: Thank you. I find Sharp particularly interesting because
it is probably in structure most similar to Kaiser and I think it will finally provide
us with apples and apples, even though Sharp is obviously very small in compare stone,
a fully capitated health plan, so I think that’s a good piece to add. It gives people a choice of something different
at least in San Diego County than other plans, along with Kaiser. Thank you.>>PRIYA MATHUR: Okay. Thank you. Any requests so there’s a motion before
the committee. Any requests to speak, any scuption on the
motion? Seeing none, all those in favor say aye.>>Aye.>>PRIYA MATHUR: All those opposed?>>No.>>PRIYA MATHUR: There’s one no. Motion passes. Okay. Any so then we still have GEMCare and HealthNet
to consider. Mr.Jelincic?>>JJ JELINCIC: I had made the motion on United
Healthcare, I didn’t specifically narrow it to northern California, I don’t think, that
was not my intent, but I wanted to make sure that they are included here, and if not, I’ll
have to make another motion.>>PRIYA MATHUR: I think they’re included.>>JJ JELINCIC: They’re included?>>Yeah.>>The motion is fine.>>JJ JELINCIC: Okay.>>PRIYA MATHUR: Thank you. Any interest in okay. Motion by Mr.Boyken.>>Grant Boyken: So I will make the motion
on HealthNet.>>PRIYA MATHUR: If you could read it, please,
into the record.>>Grant Boyken: Yes, I’m just gearing up.>>PRIYA MATHUR: Take a big breath.>>I make a motion the committee make a nonexclusive
for request for proposal 2012 6334 the RFP to HealthNet, come priemsed of two health
benefit plans, fully insured plan and self funded plan, this contract award is at the
discretion of the board as authorized by section 7F1 of the RFP and subject to successful negotiations
of terms and conditions satisfactory to CalPERS. Should negotiations with HealthNet not be
successful, the board may based on its exclusive discretion as authorized under section 7F1
of the RFP direct staff to negotiate with other proposers regarding proposals that meet
the needs of the board. Those plans will likewise be comprised of
two health benefit plans, a fully insured plan and a self funded plan.>>PRIYA MATHUR: Is there a second to the
motion? I’m sorry, who seconded the motion? Mr.Jelincic seconded the motion. Any scuption on the motion? Seeing none, all those in favor say aye.>>Aye.>>PRIYA MATHUR: All those opposed?>>No.>>PRIYA MATHUR: I think the motion does not
carry. Okay. Motion fails. We still have GEMCare, does anyone wish to
make a motion on GEMCare? (Speaker away from microphone).>>PRIYA MATHUR: Okay. Hit your okay. Go ahead, Mr.Jones.>>HENRY JONES: I move that we conclude the
discussion to include the plans that have been approved by motion to go forward with
negotiations.>>PRIYA MATHUR: Okay. Motion has been made. Is there a second to the motion? The motion is to close discussion.>>HENRY JONES: Yes.>>Oh. Second.>>PRIYA MATHUR: Motion seconded by Dr.Diehr. Any scuption on the motion? Seeing none, all those in favor say aye.>>Aye.>>PRIYA MATHUR: All opposed? Motion passes. Thank you for all your hard work. I know staff has really worked hard on this
and the committee has too, so.>>I think you recessed, I don’t know if you
>>PRIYA MATHUR: We did recess. Oh, we also have some public comment, so
yes, general public comment. So we’ve concluded with agenda item 11. Agenda item item 16 is general comment we
have a number of members of the public who wish to speak, Mandy Lee, Christy Bama from
professional firefighters, Kevin, Joe Ackler, Barry Brocan from Sacramento advocates from
Kaiser and pharmaceuticals, Cindy Lobacker, barometric pressure ri Broad from broad and
Gooseman, Paul Marcovich from Blue Shield of California? No, you don’t wish to speak any longer? Anybody here who still wishes to speak? George, did you want to come forward? Go ahead.>>
(Speaker away from microphone).>>PRIYA MATHUR: That’s fine, you’re both
welcome to come forward. If you could turn on your microphone, identify
yourself for the record and your affiliation and we’ll give you three minutes to speak. George, do you want to go first? There you go.>>Madam Chair, committee members, George
(inaudible), I have a couple items not on the agenda that I would like to bring to the
attention of the committee. One deals with the letters that have been
going out to members on their health benefit premiums that were not paid on time because
of one failure or another. One went out many months ago, and everybody
thought, okay, they’ve done reconciliations. Ah. Last month, they go out again. My concern, being from an audit background,
is who does the reconciliations to make certain that things are actually being billed and
everyone on the billing list is clud in the deduction on their PERS war ability? I didn’t see or hear anything about these
reckon sill yaiptionz on the audit committee and I would have expected to hear some of
those kinds of things at that committee because these are audit related items but they’re
also health benefit related items so that’s one thing they’ve a concern about. The other one is with our you know, the
change in the prescription D and CVS and all those kinds of things, we at RPEA receive
a lot of help complaints, let’s call them, about what’s happening to their formularies
and they can’t get this and they can’t get that, and we’ve set up a process where we
send that information both to CVS and to Ann, but what we would like is we would like some
feedback so that we know that something is really happening. We’re sending the information forward, but
it’s like it’s going into a deep hole, so that next time someone calls and asks our
office the same thing, we don’t necessarily have anything to do except forward it again,
and I think that if we could get some interaction, it would be helpful for both CalPERS and for
our RPEA and for our members.>>We would be happy to work with RPEA on
improving that. We do try to respond. Some of our feangs is related to HIPAA, but
we’ll work some of our attention is related to HIPAA but we’ll work on how to improve
feedback to RPEA and other stakeholders on this issue without having any kind of violation
on our shied.>>Exactly, because there is a violation about
having CalPERS tell us what the formularies is and all those other kinds of things, but
I think that feedback would help the process work better.>>Yeah, we’ll work with you.>>PRIYA MATHUR: Thank you very much.>>Thank you.>>Randy (inaudible) with local 1,000. I just wanted to say something in public comment
about some of the process foad, and I know that you had some very difficult decisions
to make, especially just now on healthcare. I have some concerns about Blue Shield being
eliminated because most of our, many of our employees are in Blue Shield and now they’re
no longer one of the processes.>>PRIYA MATHUR: No, they haven’t been eliminated.>>Oh, they haven’t?>>PRIYA MATHUR: No.>>Oh. Well, then, I’m
>>Yes, thrsms a motion that they be included.>>PRIYA MATHUR: Included.
>>as a nonexclusive provider, so one of the nowr.>>Okay. Then I stand corrected. Well, one of the other issues I wanted to
discuss was the fact during the debate on number 9, the amortization, when Mr.Jelincic
and Mr.Feckner had two very well naught out motions, many of the public employee groups
got up and spoke in favor of Mr.Feckner and Mr.Jelincic’s motions. The department of finance came up, it’s about
the first time I’ve ever seen department of finance here, and I also noticed that they
got to stay at the table as if they were part of staff, and, in fact, they somewhat thought
they were part of staff, as if there was some sort of collusion going on between staff and
department of finance. I have pause with that because they spoke
against, he spoke against both Mr.Feckner and Mr.Jelincic’s motions, and was given
opportunity to answer questions from members of the board, which the others were not. So I don’t think that that was proper. I think that department of finance had an
agenda and that agenda was not in favor, quite frankly, of the public employees. I would like to reesmed the department of
finance that remind the department of finance that this is a public employees retirement
system and not the department of finance’s retirement system. Thank you.>>PRIYA MATHUR: Thank you, that’s a fair
observation that was unintentional, but we should be more vigilant about that. Thank you. Okay. I see no further requests to speak from the
public, so both the open and cloachessed session of the pension health benefits committee meeting
are adjourned. Thanks, everyone.

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