Integrated Health Care Pilot Exceeds Expectations

April 12, 2011

External Affairs Branch
(916) 795-3991
Patricia K. Macht, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
Contact: Bill Madison, Information Officer
[email protected]

SACRAMENTO, CA - What happens when three large health entities - an insurer, a hospital organization and a physicians' group - join forces to integrate their respective systems, enhance their operations and improve communication about the health care of individual patients? According to theory, the result will be improved patient care and reduced medical costs for everyone involved.

CalPERS put the theory to the test in 2010. The Pension System formed a partnership with the Blue Shield of California (BSC) Health Maintenance Organization (HMO), Catholic Healthcare West (CHW) and Hill Physicians Medical Group (Hill) to initiate a two-year pilot study of integrated health care with the goal of improving health care quality and reducing costs. The pilot - which began January 2010 and ends December 2011 - covers about 41,000 CalPERS members in Sacramento, Placer and El Dorado counties.

Through October 2010, the organizations' combined efforts led to reductions in hospital stays and re-admissions. There was a 17 percent reduction in patient re-admissions; a half-day reduction in the average patient length of stay; a nearly 14 percent drop in the total days patients spend in a facility; and a 50 percent reduction in the number of patients who stay in a hospital 20 or more days. Estimates are that these efforts are likely to result in $15.5 million in savings.

"These early results show what happens when everyone works in a coordinated way," said Ann Boynton, Deputy Executive Officer for Benefit Programs Policy and Planning. "So far, this pilot is clear evidence that better communication between the health plans, medical facilities and doctors can and does lead to positive health outcomes and cost savings."

All parties agree that the critical key to the success of the pilot is the willingness of all three parties to align toward a common goal. The pilot results will likely lead to an expansion of this framework for other CalPERS Blue Shield subscribers. "We cannot overstate the importance of coordinated care, and we are encouraged about expanding this model to other areas to share its benefits with more CalPERS members," said CalPERS Health Benefits Assistant Executive Officer Kathleen Billingsley. "Providing more cost-effective care and reducing or eliminating unnecessary care will improve overall care for every member."
CalPERS is the largest purchaser of public employee health benefits in California, and the second largest public purchaser in the nation after the federal government. Our program provides health benefits to more than 1.3 million public employees, retirees, and their families. For more information, please visit