June 7, 2011
External Affairs Branch
Patricia K. Macht, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
CalPERS Applauds Blue Shield Income Cap
SACRAMENTO, CA – The California Public Employees' Retirement System (CalPERS) today praised a pledge by Blue Shield of California to cap its annual net income at 2 percent of revenue and return $180 million in 2010 earnings to customers and the community, including members without employer health care plans.
Ann Boynton, Deputy Executive Officer for CalPERS Benefit Programs Policy and Planning, said in response to the profit-capping plan, announced today by Blue Shield Chairman and CEO Bruce Bodaken:
"CalPERS is an active and ardent supporter of affordable coverage for all Californians. Universal coverage is a key aspect of reducing cost shifts that result in increased premiums. Together, Blue Shield and CalPERS have been instrumental in developing innovations to take costs out of our health care premiums without shifting costs to our members or other payers. We are pleased to see that the Board of Directors of Blue Shield of California is making this commitment to improving affordability of care. Much remains to be done to ensure quality, affordable care for all Californians and we applaud Blue Shield for taking this action."
CalPERS and Blue Shield have led market innovations to reduce costs and improve care. These include the implementation of narrow provider networks focused on quality and efficiency, and a two-year pilot study of integrated health care through an accountable care type of organization like Catholic Healthcare West and Hill Physicians Medical Group, the goal of which is to improve health care quality while reducing costs by an estimated $15 million.
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. It spends approximately $7 billion a year to provide care to more than 1.3 million active and retired state and local government employees, retirees, and their family members. For more information on CalPERS, visit www.calpers.ca.gov.