The California Public Employees' Retirement System (CalPERS) is demanding more bang for the buck for healthcare spending, as it picks a new administrator for its healthcare plan. While Blue Cross currently administers the pension fund's two self-funded PPOs, the contract expires at the end of 2007. CalPERS issued an RFP this week, requesting pitches to administer the contract starting in 2008. This time around, CalPERS is asking candidates whether they will share information on hospital and provider pay rates, administrative costs and patient outcomes. CalPERS also wants to know whether the administrator can run disease management and wellness programs, manage MD networks effectively and work well with pharmacy benefits-management companies. Ultimately, the administrator may also be asked to create a self-funded HMO as well, the RFP suggests. With 1.5 million members, and $200 billion in assets to throw around, CalPERS is likely to get what it wants. Whether smaller health plan purchasers will have the leverage to demand this level of transparency from contractors remains to be seen. After all, it's likely that smaller third-party administrators don't have the reporting capacity to provide fine-grained reimbursement and outcomes data yet.
For more background on CalPERS' demands:
- read this article in the Sacramento Business Journal