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9.A -?L The PERS Healm Senetits Committee spent several hours deliberating on its proposed strategic plan at a hearing on Tuesday, May 13, but unfortunately approved only a few non -subs: antive changes. Public agencies now have to ask themselves, "What will be best for my agency and its employees ?" when the new rates come out in June. These are expected to increase by 20 -30% with little in the way of program reform. A summary of actions taken by the Committee is outlined below. Issues that were most important to public agencies and proved to be the most cost effective were rejected or delayed by the committee. City officials should act now to review their options. Local agency rates will increase by at least 20 %. If your public agency wants to receive more information regarding these recommendations, please contact League Legislative Representative Amy Brown at 916 - 658 -8279 or email brown @cacities.org Recommendations that were APPROVED by the Health Benefits Committee 4 Health Policy Debate —CaIPERS should be more active in state and federal debates that help expand coverage to the uninsured, lower cost of pharmaceuticals, and promote uniform accounting, greater price, profit and disclosure. Care and Disease Management —CaIPERS should have at least three care management programs and that plan reimbursement be based in part on performance in this area. J Rural Assistance Task Force —CalPERS should establish a rural task force of stakeholders to focus on needs and system -wide solutions. V Multi -Year Contracts with Strategic HMO Partners — CalPERS should seek multi -year contracts with "strategic partner" plan vendors. CalPERS should commit to a multi -year contract with Blue Shield for '04, '06 as the exclusive statewide network HMO. V Increase the Effectiveness of Pharmaceutical Expenditures - CaIPERS should be more active on state and federal pharmaceutical legislation, should evaluate /form larger purchasing coop, and develop a study in the summer of '03 of clinical/cost effectiveness of carve -outs. � Performance Based Providers — CaIPERS should seek to focus competition at provider level by adopting measures aimed at selecting providers based on performance, holding providers accountable, moving more CaIPERS care to higher performing and higher quality providers q Participate in a Coalition — CalPERS should participate in a purchasing or negotiating alliance to examine government or employee based plans. Recommendations that were REJECTED by the Health Benefits Committee • Separate Pools within the System — CaIPERS rejected the consideration of having public agencies develop separate pools within the PEMHCA system. • Alternative Plans — CaIPERS delayed discussions regarding benefit design flexibility and consumer driven plans for public agencies. Legislation will not be sought to achieve these goals. • Tiered Hospital Networks — CalPERS delayed discussions regarding tiered hospital networks. Board members stated that this would create adverse selection problems within the system. • Regional Rating — CalPERS rejected any regional rating between public agencies and the State. Members were clear that they did not want any regionalization system that had adverse affects on the 10/90 state annuitant contribution formula. • Regional Pricing — CalPERS was very reluctant to fully implement this immediately and in fact, some suggested deferring this issue until the rates come out in June. The regional pricing only affects public agencies and will likely be beneficial to those in Southern California, and will likely hurt those in Northern California. PAGE 2 /PRIORITY Ft: = Visit the Ieagite's Official YJeb Site- %*w-cacitim.tag ■■ ■ i- o is v • ■ • •• ■ s is • - r-i e•.o EM,