Cal Pers

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Cal Pers

• Daniel, Russell Charles Co.
• Corporate Wellness

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Cal Pers

• Increasing Costs
• California Public Employees Retirement Systems
  (CalPERS) recently announced that its Health
  Benefits Committee agreed to let the ten HMOs
  that insure its members raise their premiums by
  an average of 9.7 next contract year. Over the
  last 7 years health care rates have increased
  enormously. It is anticipated that this will
  continue over the next 3-5 years. Realistically,
  in an aging society, health costs will continue
  to rise unless new developments are made to deal
  with the problem.
• New pharmaceutical products are being
  introduced at such high costs that the HMOs will
  continue to pass the costs along to their
  customers.
• Life expectancy has increased significantly
  over the last 10 years. Consequently, there is
  discussion in Congress about increasing the
  retirement age from 65 to 68 - 70. These factors
  produce an increased need for cost control
  maintenance in the healthcare industry.

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Cal Pers

• In the past, Cal Pers has been able to use
  large quantities to keep health care costs low,
  but this approach will not be feasible in the
  future. By the year 2003 a single individual is
  expected to pay 230.00 for his or her coverage.
  Compare this to the current cost of 165.00 per
  person, and it becomes apparent that new tactics
  should be employed for CalPERS to control costs.
• Daniel, Russell Charles Co., along with a
  variety of specialists in the area of health care
  have evaluated the benefits and costs of Cal PERS
  over the past 10 years.

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Cal PERS

• Managed Care Overview
• According to studies, managed care
  organizations now cover approximately 80 of all
  U.S. employees and their dependents. Managed care
  plans include HMOs, PPOs, and POS, EPO Self-fund
  and Association Plans, which offer comprehensive
  medical services to their members. For the
  majority of the 1990s, these managed care plans
  have performed exactly as intended, which stable
  rates indicate.

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CalPERS

• Trends in the Delivery of Managed Care
• The average cost of care increased 5.1 in
  1999, and the upcoming 9.7 hike for CalPERS
  indicates that cost containment remains an
  unsolved issue in the health care market place
  for providers.
• CalPERS has set the industry standard or so
  long that this increase will affect various
  aspects of care throughout the field,
  including
• HMO Consolidation
• Cost of Care
• The Medicare Market
• The Quality Demands of Customers
• Technological Issues

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CalPERS

• Market Trends
• Following next years rate increase, there are
  predicted rate hikes in the industry of between
  10-12 for the following three years. Such
  increases will have a serious impact on
  customers, as well as carriers. If costs continue
  to increase, a statuatory act by the Govenor may
  be required which will impact two-party and
  family plans.
• These plans are not guaranteed and costs could
  be passed on to management and staff.

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CalPERS
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CalPERS

• Cost Savings with DRCs Proposed System
• DRC Group proposes to CalPERS a new Corporate
  Wellness System (CWS) which will evaluate health
  care costs based on employee utilization data.
  Analyzation of this data indicates individual
  propensities to certain medical conditions. As a
  result, DRC proposes a science-based health
  management program which will achieve the desired
  results for CalPERS by cutting the cost of
  chronic conditions and long-term care.

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Cal Pers

• DRC Groups Corporate Wellness System (CWS)
• Daniel, Russell Charles Co. has a system that
  evaluates each employee, monitors their health,
  and reports the information to the proper
  individual. This allows accountability and
  justification for stable rates and future
  reductions. This new system will provide the
  basic needs to assist in containing costs in the
  area of health care.
• This new system includes the following
• Motivation for the health carrier to stabilize
  costs in the future
• A complete analysis of utilization cost for the
  employer
• Motivation for the employee to consider his or
  her health as a primary concern

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CalPERS
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CalPERS

• Daniel, Russell Charles Co. proposed
  Corporate Wellness Plan will be a compromise to
  the conflicting viewpoints currently in the
  market. This will allow for a better working
  relationship for all parties involved. This plan
  will lower costs, improve results by directly
  monitoring quality of care and at the same time,
  work within the confines of the existing system.

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Daniel, Russell Charles Co.

• 980 Ninth Street
• 16th Floor
• Sacramento, CA 95814
• [phone]