What is the California Public Employees' Retirement System (CalPERS)?
CalPERS is a public agency that provides health coverage for 1.4 million public employees, retirees and their families and more than 2,500 employers. CalPERS is the third largest purchaser of health benefits in the nation.
Why did CalPERS decide to eliminate some Sutter Health facilities from its Blue Shield HMO network beginning January 2005?
CalPERS says Sutter's prices are among the highest in California and are contributing to sharp increases in CalPERS health insurance premiums. During the past three years, monthly premiums for CalPERS members have increased by 50%. CalPERS says such large increases are financially unsustainable. Already, premiums for public employees have reached such high levels that some employees can no longer afford their share of health insurance costs.
In an effort to hold down health costs, CalPERS asked Sutter to lower its prices to levels charged by other hospitals. After months of negotiations with CalPERS, Sutter refused. On May 19th, the CalPERS Board of Administration announced its decision to eliminate the highest priced Sutter facilities.
Is it still possible for Sutter to restore CalPERS members' access to the excluded Sutter facilities?
Yes. CalPERS says that any of the Sutter facilities can rejoin the Blue Shield HMO network merely by lowering prices to levels more consistent with other providers. Throughout the many months of its negotiations with CalPERS, this option was always available to Sutter.