SACRAMENTO, Calif. – The board of the nation’s largest public pension fund voted June 19 to endorse state legislation that would require healthcare giant Kaiser Permanente to operate under the same price reporting requirements as other hospitals and insurance companies in California, which would arm consumers with information to compare hospitals and allow employers to negotiate better agreements when purchasing health insurance for their workers.
The board of the California Public Employee Retirement System (CalPERS), the giant retirement system with more than $300 billion in assets, voted 9-0 with two abstentions to endorse SB 343. The California Senate passed the bill on May 6 and the Assembly Health Committee passed it June 25.
“With additional and improved data on costs and outcomes, it is believed that purchasers will be able to make better decisions and the industry will be able to better identify and resolve problems,” said a background document prepared by CalPERS staff. “[SB 343] may provide an additional tool for CalPERS to use to verify that the information it does receive is accurate. In addition, it may increase other purchaser’s ability to access healthcare pricing and utilization data, which could help them develop cost containment measures that are similar to those employed by CalPERS.”
SB 343 would require Kaiser Permanente to provide the same data as other insurance companies to justify increases in health insurance premiums. It would also require the company to provide pricing information on an individual hospital level, as opposed to its current practice of lumping data for all hospitals into two regions: Northern California and Southern California. Breaking out pricing by facility in San Francisco, for example, would help employers and consumers make smarter choices about obtaining quality healthcare, and make it easier for them to negotiate favorable rates when purchasing health insurance.
Kaiser controls one in ten California hospitals and more than 40 percent of insured Californians with group healthcare coverage.
SB 343 is supported by a coalition of healthcare, consumer, business and worker advocates, including the Silicon Valley Employers Forum, the Small Business Majority, Health Access California, the California Labor Federation, SEIU California and the San Francisco Board of Supervisors.