CALPERS TELLS 18 HEALTH-CARE PROVIDERS IT EXPECTS A 5% ROLLBACK IN PREMIUMS
In it most aggressive swipe at health-care costs to date, the huge California Public Employees' Retirement System served notice that it expects health-care providers to agree to a 5% rollback in health-care premiums for 900,000 public employee families ... Calpers, which manages one of the country's largest groups of insured individuals and is often cited as a model of health-care reform, told 18 managed-care companies that it expects the 5% rollback to be effective in the 1994-95 contract year, which begins August 1 ... Providers expressed surprise and muted alarm at the depth of the cutback proposed ... The 5% target was based on numerous studies, not only of individual HMO fiscal data, but also on Rand Corp. studies showing the persistence of waste and overutilization in health care which documented excessive Caesarean deliveries, overuse of magnetic resonance imaging scans, overprescribing of drugs, and performance of unnecessary surgery when less invasive procedures would suffice.