chairperson mathur: good morning, everyone.i'm going to get the pension and health benefitscommittee started.first order of business is roll call. committee secretary jimenez: priya mathur?chairperson mathur: good morning. committee secretary jimenez: george diehr?vice chairperson diehr: here. committee secretary jimenez: michael bilbrey?committee member bilbrey: present. committee secretary jimenez: ralph cobb forjulie chapman? acting committee member cobb: here.committee secretary jimenez: ruth holton-hodson for john chiang?acting committee member holton-hodson: here.
committee secretary jimenez: rob feckner?committee member feckner: morning. committee secretary jimenez: j.j. jelincic?committee member jelincic: hello. committee secretary jimenez: henry jones?committee member jones: here. committee secretary jimenez: grant boykenfor bill lockyer?acting committee member boyken: here. chairperson mathur: the second order of businessis the executive report. ms. boynton. deputy executive officer boynton: good morning.just a brief update on our health plan implementation inpreparation for the january 1 launch of our new plan year.the implementation activities are proceeding
well. there is no doubt that it's been anenormous challenge. and again, i would like to extendmy sincere thanks to the state controller and his stafffor their commitment and -- continual commitment towork with us through a significant number of challengesrelative to our systems and their systems and the plans' systems.but all of that is going well and we look forwardto an entirely eventless launch of our -- all of our newplans, and our new processes into the new year.the other thing i would mention is there's
-- asyou all have seen in the press over the past couple ofweeks, there's -- although we had thought that the aca wason a fairly steady path to implementation, that has provento be a little bit more elusive. the major change, ofcourse, being the question of whether or not individualpolicies would continue to be issued that are not incompliance with the essential benefits for the aca. it'sa very tumultuous time in the health care deliveryindustry.
all of the ceos, all of the providers thati speak with are entirely committed to ensuringthat they are ready, and that they are implementingthe triple aim and been redefining the care delivery system.that, however, is an enormous charge. if you justthink about that we spend about $7 billion this year inhealth care. even if all of that went to only one provider,trying to change a $7 billion industry is one thing.and then you magnify that across the entire state, withthe overlay of
the federal government payment systems ontop of that and all that goes with it, there's a lot goingon. i can say though that without -- to an individualall of the delivery system folks that i talk with say weunderstand the message. we know health care has to bemore affordable. we are working toward it, but it willnot be something that happens quickly, so -- and i thinkthere's an overlay of distrust amongst partners in somecircumstances that makes it more complicated. sohospitals hear loud and clear that delivering
care in ahospital setting that doesn't need to be there isn'tfinancially viable for us. so they are going through a struggle, someof them, on whether or not to surrender entirelythat sort of line of business. they are, in some circumstances,intentionally purchasing brick and mortar outside of thewalls of the hospital to be able to continue to providethe quality service that they have been providing fortheir patients. that activity can be viewed withsuspicion. it is, by some. the same is true
on the otherside of plans acquiring physician groups or plansacquiring -- it's a time of tremendous change. and i'dlike to say that by january 1st we're going to be clearand solid and know exactly where we're headed. i thinkit's at least a couple years before we have any realsense. we're very encouraged by the changes at the-- the apparent changes that are under considerationat the federal level related to medicare reimbursement,because
frankly until we get a little bit of a changeon the medicare side, we've got an industry that'svery bifurcated in how they are receiving paymentwithin california.so no answers at all from me today. but i justwanted to acknowledge that the industry, i am encouragedby the words that i -- you know, by the actions and thewords that i hear and the actions that i see from ourindustry partners, and that we will be making change. itmay not be as fast as all of us want it to
be, but i dobelieve that it's on a path that really can't be undone atthis point. so that's good. that concludes my remarks.chairperson mathur: thank you very much. i seeone question from the committee. mr. jelincic.committee member jelincic: with the open enrollment -- i assume we haven't finalizedall the numbers yet. but in rough terms, how manymembers did the new plans pick up?deputy executive officer boynton: we don't havethe final numbers yet. generally, the plans
picked upabout the amount that we had expected that they would,that we factored into our risk-adjustment method, when wecalculated -- when we did our risk adjustment. sooverall, they're fairly close to what we thought that theywould be. there are a couple exceptions where -- andwe'll be working with those plans as we move into ratenegotiations this year to see what may be causing that.committee member jelincic: and -- deputy executive officer boynton: and therewas
good movement. there was more movement thisyear than we had last year. so that's a very positive development.we would like to see more, but we all know thatthe hardest part in anything -- any kind of a change likethis is getting people to actually open their openenrollment material and doing something with that, outsideof some sort of a, you know, a forced migration activityor a hundred percent positive enrollment. they're-- getting people to take an action on these things isvery hard.
committee member jelincic: thank you.chairperson mathur: thank you. agenda item 3 is the minutes. what's thepleasure of the committee? committee member bilbrey: i move approval.chairperson mathur: moved by bilbrey. vice chairperson diehr: second.chairperson mathur: seconded by diehr. all in favor say aye?(ayes.) chairperson mathur: all opposed?motion passes. agenda item 4, consent items. i see no requeststo take anything off consent. agenda item 5 is the extension of the pharmacybenefit program manager contract. deputy executive officer boynton: thank you.kathy donneson will present this item. i do
want toconvey to the committee and to our constituents that we donot -- i will say flatly, we do not believe that the cvscaremark implementation has been flawless. the discussionthat we are having should not be taken in the context thatwe think that all of the performance has been spectacular.there have absolutely been problems. we are workingdiligently with cvs caremark and they are working verycooperatively with us to resolve those issues. but i just want to set -- be frank with youall
that this is not to say -- the item beforeyou is not to say that we think everything is hunky-dory,because we absolutely do not think that that's the case.chairperson mathur: thank you. ms. donneson.office of health plan administration chief donneson: good morning, madam chair, membersof the health -- pension and health benefits committee.this agenda item is an action item to extend thecvs caremark pharmacy benefit management contract for twoyears. calpers began contracting with cvs caremarkin
2012 under a three-year contract with theoption to extend for one to two years. the contract was implementedprior to the passage of board resolution number92-04b, which allowed competitive contracts to be awardedfor five years.cvs currently provides pharmacy benefits for over350,000 ppo basic and medicare members, and in 2014 willprovide pbm services for anthem blue cross, health net ofcalifornia, sharp healthcare, and united healthcare. calpers staff, cvs caremark, the new hmo plans,and the state controller's office have been
workingdiligently on implementation activities since the hmocontracts were awarded in april. member communications, micro sites, evidence of coverage bookletshave been developed. pre- and post-implementation auditsand performance guarantees will allow calpersto effectively monitor the performance of cvs caremark.if the contract extension is not approved, staffwould need to release a pbm rfp, which would take aminimum of 18 months to fully execute. in thiscircumstance, staff would request a one-year
extension toallow time for procurement and implementation. if the two-year extension is approved, staffwill initiate development of the rfp in late 2014with an anticipated contract award in late 2015.extending the contract for two years would costapproximately $29.5 million in administrative fees. ifcalpers is required to procure a new pbm, theadministrative costs would be unknown and may not be lessthan the current fees for cvs caremark. this could resultin higher hmo and ppo premiums.
staff recommends extending the contract fortwo years to december 31st, 2016 to avoid memberdisruption, improve existing programs, and provide qualitypharmacy benefits at a reasonable cost.that concludes my presentation. are there anyquestions? chairperson mathur: thank you. we do haverequests to speak. mr. jelincic.committee member jelincic: you know, it could becheaper. it could be more expensive. we won't knowwithout doing an rfp. one of the things that
was pointedout is that members who have become familiar with cvscaremark operations may be adversely impacted. i wouldpoint out that those who have become familiar with themand really dislike them would be positively impacted.but we -- i think the bigger issue is we actually have a workload issue. and you made referenceto it at the beginning of the analysis. and so i wantto at least throw out the question do we have sufficientstaff, are we committing sufficient resources? you know,if we're not
doing an rfp because of a resource constraint,then maybe we need to look at a staffing issue as well.and so i just want to throw it out and get yourcomments on it? deputy executive officer boynton: we haveadequate staff to process the routine workload ofdealing -- working with cvs caremark, with the statecontroller's office, and with our plans, and with ourmembers as issues arise and need attention. the additional workload of an rfp is significant,and that would require that we would bring in supportiveresources on the outside, so that they don't
impact thedaily operations. committee member jelincic: when was the lasttime we had a normal work flow in your unit? i mean,we've got through long-term care. deputy executive officer boynton: yeah, iwas thinking about that the other day.committee member jelincic: we've gone through, you know, the long-term care. we've gone throughthe new rfps, the new plans. things have not beentypical. and i'm just wondering when you anticipate a normalworkload? deputy executive officer boynton: well, 2014will start to level out. 2015 will only be
the -- only bethe pbm rfp and the routine plan operations. so thenwe'll -- we will be able to, over the next two years, ithink really settle into understanding what does ourworkload look like. committee member jelincic: thank you.chairperson mathur: thank you. this is an action item. what's the pleasure of the committee?vice chairperson diehr: move staff's recommendation.committee member jones: second. chairperson mathur: moved by diehr, secondedby jones.any discussion on the motion?
seeing none.all those in favor say aye? (ayes.)chairperson mathur: motion passes. we'll now move on to your information agendaitems. item 6, policy engagement on national pensionissues. and i believe we have our federal representativeon the phone, mr. tom lussier. mr. glazier.deputy executive officer glazier: good morning, madam chair, members of the committee. robertglazier from external affairs. you're correct, tomlussier is standing by on the phone and will join meat the end for
any questions that you may have.this is an informational item. and it summarizes for you some of the federal pension issuesthat tom and i have been discussing over the past few monthsduring our board updates. most importantly though, itdescribes some of our current and future efforts to proactivelyengage and educate appropriate legislators and otherstakeholders on these important issues.i believe you're familiar with each of these topics, so i won't go into detail. tom hasalready captured them well in a memo for us. but iwill remind
you as tom and i have pointed out severaltimes that due to the current environment and the attentionto bankruptcies and unfunded liabilities recentlyin washington d.c., the public profile of theseissues has been heightened and can easily be linked toincreasing the risk to public employee pension systems, whichis why we've brought this forward again.as a result, i want to spend just a moment highlighting some of our engagement strategiesthat we are implementing to deal with these potentialrisks, in
addition to the activities that are alreadytaking place. first, we plan to expand further the calpersvoice, if you will, by developing a communications networkand engagement strategy, which would create a coalition ofcalifornia retirement pension systems, where we couldcollectively send letters in agreement to members ofcongress to share with them issues of particular mutualinterest for us. this is a process that nasra currently usesacross state retirement systems. and we've alreadyreached out to sacrs, and they are interested
inparticipating with us. second, we are engaging with senators feinsteinand boxer regarding the concerns that we have with senatorhatch's safe retirement act. third, we're developing a document that canbe shared with the california delegation to summarizethe steps which calpers has already taken to strengthenthe sustainability of our plan, plus the pensionchanges that have been already enacted here in californiato illustrate that federal intervention is not necessaryin state
pension policy.lastly, we'll continue to support and push ournational coalitions through nasra and nctr to engage inthese issues as well. that concludes my summary, and i'm availablefor questions as is tom on the phone.chairperson mathur: thank you. any questions from the committee?mr. jelincic. committee member jelincic: we spent a lotof time talking to regulators and politicians.would it be helpful to have more board member participationin that?
you know, to the extent that it's really anitty gritty mechanic bill type analysis, i think staffis the appropriate level, because quite frankly wedon't know what we're talking about on those issues,or at least i don't. i won't say that for everybody on theboard. but a lot of these are policy type issues,and i'm wondering if it would be helpful to havemore board participation in those discussions?deputy executive officer glazier: it really would depend on the issue and the point intime what kind
of efforts that we're engaging in. sometimesthat might be appropriate. other times, like you say,it's much more of a staff-to-staff level engagement. so wewill always consider that, and look at that, but we appreciatethe board support, because that is helpful whenthe board does engage at the right place and the right time.committee member jelincic: and then on page fiveof eight, we identified some of the people who areconsistently taking shots at us. what are we doing tofind out how many of our vendors are supporting
those whoare taking the shots? deputy executive officer glazier: i don'tknow that we have specifically looked at whetherour vendors are supporting others in political ways, ifthat's what you're referring to?committee member jelincic: yeah. deputy executive officer glazier: but wecontinue to engage in the areas that feel are appropriateto make sure that our voice is heard and that we'reexplaining our position. committee member jelincic: i mean, if ourvendors are not pursuing our interests, we
ought to have adiscussion with them. i mean they can make whateverpolitical donations they want, but we ought to at leasthave the discussion. thank you.chairperson mathur: thank you. mr. jones.committee member jones: thank you, madam chair. yeah, robert, in reference to j.j.'s commentabout board involvement, if, at some time in the future,that becomes necessary, a model that i recall worked severalyears ago is that we -- the president had noticed ameeting with --
in conjunction with the cii, and as a resultof that, several board members were able to attend.and they fanned out to different committee chairs inwashington, you know, whether it was health issues, whetherit was finance issues. and, you know, a trio of boardmembers met with the chairs of the various committees.and, at that time, it appeared to be very, very effective.so that's something to think about also.deputy executive officer glazier: that is definitely something.chairperson jones: and i've shared this with
thepresident, by the way. deputy executive officer glazier: yes. tomand i have discussed those opportunities as well.thank you. chairperson mathur: i have a question. i'mnot sure if it's for you or for tom. to what degreeare -- is congress asking us to weigh in on the acaand the roll-out and some of the issues that are arising asa result? deputy executive officer glazier: it woulddepend on the issues, but either tom or ann could probablytell you more specifically the various opportunities
thatwe have. deputy executive officer boynton: yeah. wheni was back in washington recently, i did meetwith congressional staff specifically on the issuerelated to the medicare payment reforms that i mentioned,and the proposed -- bipartisan proposal related tothat, which we think is very, very positive movement. andi will turn it over to mr. lussier to discuss other interactionsthat he and his staff have been having on the aca.mr. lussier: thank you, ann, and good morning
everyone. at the moment, we haven't been askedto weigh in on any of the most controversial issues.and i think that's good. we have been asked, and as annjust indicated, we are actively engaging with thesenate finance committee around the whole str repealand payment reform legislation.as you probably know, there has been a significant bipartisan bicameral piece oflegislation advanced, that they are desperately lookingfor broad based support, and they're very grateful thatcalpers has
expressed a willingness to be actively engagein that conversation. ann has committed to do that,and we're just going to continue to sort of be responsiveto whatever they ask us to do that you all arecomfortable doing.and as the proposal gets more specific, i suspectthe engagement will also get more specific. right now,they're looking for general support for the themes in thecompromise legislation. and as far as i know, ann andyour health staff are very comfortable in
providing that.chairperson mathur: okay. thank you. i see no further requests to speak, so thanksvery much for being with us, tom. mr. lussier: thank you.chairperson mathur: we'll move on to agenda itemnumber 7, customer service and support performance update.deputy executive officer lum: you'd think byknow i'd know which one of these turns it on. goodmorning. donna lum, calpers staff. this morning i have an information item, agendaitem 7, which is our quarterly performance agenda item.and just before i get started, i wanted to
share a coupleof quick numbers with you. so if you consider 256,882,that is the number of inquires that we received for bothretirement and health during this past quarter. weprocessed over 10,000 service requests -- service retirement requests, and we also processedover 11,000 services retirements.and so i wanted to share these numbers with you,because i think it's a remarkable number of statistics andworkload that our program has handled in just one quarter.and i believe that these raw numbers illustrate
oneimportant aspect of the effectiveness of our programs, andthat is providing service to our customer service and justthe shear volume of productivity that the service agentshave been providing. so as we move forward with the agenda item,i just wanted to also convey to you that i'mvery pleased with the dedication of our customer servicerepresentatives and the teams and their performance. ouroptimism is quite high as we share this information withyou with regards to what you can expect in
the upcomingquarters. that being said, as noted in the agenda item,we do have a couple of areas that are not yetperforming at the levels in which we desire. those areasare related to membership determinations and service creditpurchases. however, although those areas are not performingat level -- at the expected levels, i do wantto assure you and reassure you that with our backlog eliminationplans that the staff have been working on, we doexpect that in
the next few quarters we will see measurablegains in these areas.the agenda item also lists a number of updates that we have on projects that are part ofour service delivery transformation roadmap. and so, asnoted in the agenda item, we've recently completed a coupleof surveys that we have implemented for members who aredoing service with us on line, part of our member self-service.and the intent of these surveys is to give ussome feedback on their experience, their on-line experience, so as we go forward and developadditional and
new functionality, we have a good baselinefor the types of things that are working well on memberself-service and those areas that we can improve upon.in addition to that, we've continued to roll-out what we call our core competency training.and these trainings are designed to support our employeesby providing them with timely and effective trainingto reinforce what we consider to be very strongcustomer service skills and job knowledge, in additionto what they have.these training skills -- or these training
classes again provide, what we call, bestpractices in a number of enriched areas where we believeour staff will continue to greatly benefit as we continueto expand upon our customer service skills.we have been making modifications to our interactive voice response system, that'sthe ivr, when members and employers call into the contactcenter. we've worked with a vendor who has done an experiencestudy with customers, a variety of stakeholders, andwe've begun to make some design elements to streamline theexperience on
the ivr.so with implementation expected to be released atthe end of the fiscal year, we do anticipate that ourcustomers will have a much more satisfactory experience inutilizing the ivr. in addition, i'm pleased to say that we'vecompleted our overview of the results and surveys from ourretirement planning fair. i think, again, i'd like tothank many of you that were able to attend the fairs. itwas a success. we did see an increase in the attendance.some of the survey statistics that we got
was 91 percentof the customers that completed the survey indicated thatthe retirement planning fair was very much worthwhile. wehad 96 percent who said that the date and the time and thelocations were very convenient, and 90 percent indicatedthat the sessions that they attended met their needs andexpectations. and then finally, 93 percent of the surveyrespondents indicated that they would recommend theretirement fairs to others. as far as the contact center update, i'm againvery pleased with the performance that we're
seeing in thecontact center. we held steady at a one minute or lesscall wait time during one of the most busiest times thatour contact center experiences, and that's with openenrollment in the month of october. overall, we'recontinuing to see a number of different improvements inthe contact center. but mostly, i just wanted to again to sharewith you my pleasure with the experience that weknow that our members are receiving with the responses they'regetting
and the closure rate of the inquiries thatare happening at the point of contact.and then also at the employer forum, i shared with you that we were rolling out a new employerresponse team. and monday -- or the monday followingthe employer forum we launched the new team. and in lookingat the results of the team and the types of callsthat have been coming in over the past three weeks, i amreally pleased to note that our employers are utilizing thatemployer response escalation method of contacting usfor the right
reasons.we were concerned that we would receive an overwhelming number of calls coming in havinghanded out our flier to over 600 employers.the vast majority of the calls coming in i thinkwe've averaged less than 10 to 15 calls per week we havebeen able to bring closure to, which are some of the morecomplex issues. more than 80 percent of those are beingclosed in less than 72 hours. so again, i think it was a great success forus to assemble that team, put the processes inplace, and
again ensure that the experience that ouremployers have with the most escalated inquiries are beinghandled. overall, our metrics continue to improve acrossthe board. and i do feel that our performance over thepast quarter was very strong. and as i mentioned earlierin my presentation, i anticipate that the upcoming nexttwo to three quarters we'll really see things level out ina higher degree of performance in those underperforming areas than what we've seen in the past year.so that concludes my presentation, and i'm pleased to take any questions you may have.chairperson mathur: thank you. mr. feckner.
committee member feckner: thank you, madamchair. thank you, donna, for your report. and i too amvery pleased with the nice turnaround you've seen in thecall center et cetera. my concern is on your two redstatus issues. and it's -- i don't want this to be anegative. i want to focus on a positive, as we've donewith other things. although there is a backlog, youdidn't say how big the backlog was, which isn't really thepoint. the point is if it's a staffing issues, then ithink you need to say that. we need to find
a way to worktogether to make sure that we staff accordingly, becauseeven to get to these levels, in my opinion, 90 days and120 days is our goal is not acceptable to me.now, as we get better in things and we move farforward, i mean when you start looking at doingsatisfaction surveys right below that, i can't see anyonewho would be satisfied with taking four months to get ananswer to a question. i can buy a house in half the timethan it takes me to get a member determination.
we need to find a better way. and if it'speople time, et cetera, then we need to focus onthat and maybe help give the help that you need to get tothat point, because we were in a better spot before. andi wanted to see us get there before.but beyond that, i want to be able to have rational discussions on these goals, becauseas we've seen in society when you set a goal, once you getthere everybody celebrates. they relax. we shouldn'tbe relaxing when we're four months away fromgiving somebody
an answer. i mean, four days would be somethingwe should shoot for a goal.so i get we need to have short-term goals, but tojust say that 120 days is a goal we're looking for, ithink is a disservice to the members. so if we can do abetter job in helping you staff accordingly, then i wouldlike to be able to do that. deputy executive officer lum: thank you.chairperson mathur: thank you. mr. bilbrey.committee member bilbrey: not on the report. ijust wanted to make a quick comment. i've
been visitingthe local regional -- or the regional offices, some of them. and i just want to say thank you tothe staff. they've been very informative. it's excellentto see what happens in the field and what's going on.i can't stress enough about the power of attorney. i happened to be in one of the offices,and a member came in who was actually going straightto the hospital to have surgery. she was in latestages of cancer, and came in to get her affairs inorder. so the
staff was right there immediately taking careof things while i was in the office. so i just wantto commend them for the amazing job that they do each andevery day. deputy executive officer lum: thank you.chairperson mathur: it is wonderful. we have really dedicated staff.mr. jelincic. committee member jelincic: yeah. i was insan diego recently for the california state retireesboard meeting, and a number of the members cameup to me and said, you know, the calpers office is justaround the
corner. we marched over there. and they werereally polite and very helpful. and so i want topublicly acknowledge the san diego office doing a goodjob. mr. jones.committee member jones: since everyone is givingkudos. (laughter.)chairperson mathur: it's a great bandwagon tojump on. committee member jones: anne stausboll andi visited the san diego regional office, andwas -- we spent
a lot of time getting input and taking theirrecommend -- anne was taking their recommendations forpossible changes, et cetera. but the staff was veryengaged. a small office, but very engaged. and so i justwanted to know that was a good outing for us also.deputy executive officer lum: if i could just comment quickly on the regional offices. ido go out to the regional offices as well as the leadershipand the -- and i visited several in the last two weeks.and echoing your comments, they are doing a fantasticjob out there.
and they do appreciate the visits that theyhave from our executive team and from the board membersas well. one thing that i would also, just to add ifi could, in response to mr. feckner. and youare right, we do revisit our baseline metrics and the goalsthat we set. the vast majority of them are set at 100 percent.the ones that we have that are set less typicallyrequire constraints that are more out of our control,but they're not at a very low level.we are going through the process now that
againour performance has begun to rise to reevaluate some ofthose metrics. the service retire -- or excuse me, theservice credit purchase backlog, again in january we hadover 30,000 items. we have less than 4,100, and primarilydue to pepra and the elimination of arsc, so they'remaking great progress there. to answer more of the question related toour membership determinations, what you're seeingin the backlog there, and this was the first timethat it came up
in our report, is because we put a focusedeffort on getting to the most aged items. you didn'tsee this come up in a previous report as an area of concern,and that's because we concentrated that effort and we'remaking good progress.what we're having to do there is really interact with the employer to get information timely,so that we can do the determinations more timely, butthat's a process thing that we're having to work onwith the employers. so i don't believe that it is astaffing
issue, per se, at this point. it was justa matter of our -- where we focused our effort and thengoing forward. the 120 days is something that, again, aswe evaluate our performance metrics, we can lookat it and how to improve upon the processes to get thatreduced as well.chairperson mathur: okay. thank you. we'll move on to agenda item number 8, long-termcare new product update. deputy executive officer boynton: we havetwo long-term care items to present to you today.the first
is focused specifically on the long-term care4 product, which will be available beginning next month,mid to late next -- mid to late december.and then the second item is to talk about followup from the valuation discussion we had last month.office of health plan administration chief donneson: good morning, again.madam chair and members of the pension and healthbenefits committee, this agenda item is an update on thebenefit and pricing options for long-term care 4.calpers ltc program and actuarial staff used
thecalpers program market study that was conducted by mercerin february 2012 as the source document for modernizingthe benefit design for ltc4. the benefit design and rateswere approved at the february 2013 board meeting, andrates were developed consistent with a long-term caremargin of 10 percent. the process was completed for the base planand optional benefits. and the resulting rateswere compared to similar long-term care industry carriers.actuaries from two external consulting firms
reviewed the assumptions. underwriting requirementswere reviewed as part of ltc4 pricing to ensureguidelines are current with long-term care insurance industryand to provide comprehensive screening.in the open application for ltc4, coverage willbe extended to adult children of california publicemployees. the major difference between our currentpolicies and ltc4 is the elimination of the lifetimebenefit period and the facility-only coverage. attachment 1 of the agenda item provides thepricing for ltc4. and attachment 2 provides
the benefitdescriptions for both calpers plans and the partnershipplans administered through the department of health careservices. i'd like to explain a little bit about thepartnership plans. the california partnership forlong-term care policies allow participants to keep assetsand qualify for medi-cal in order to receive additionallong-term care services. the amount of assets medi-calparticipants -- or medi-cal office will disregard is equalto the amount of the benefits the participant
actuallyreceived. the ltc for partnership plan has the samebenefits as the calpers ltc4 plan. the partnership planbase benefits include a daily benefit amount ranging from$170 a day to $400 in $10 increments, but the benefitperiod is for one to two years, with an limitation periodof 30 days versus our calpers plan that has 90 days.the partnership plan policies must include a fivepercent compound inflation protection rate in the baseplan for participants under 70. and for those
participants 70 years and older, the participantcan choose either five percent compound inflationor five percent simple inflation protection. also,the optional restoration of benefits is not allowed underthe partnership plan. so those are some of thedifferences between ltc4 and the partnership plan.turning to attachment 1, i'd like to walk youthrough the materials that we've prepared for you toexplain the pricing. pages one through six identify theltc4 pricing assumptions. this is how the
prices weredeveloped by our internal and external actuaries. pagesseven and eight compare the ltc4 new product to ourcurrent ltc3 product. and so page seven illustrates thedifferences in the benefit design, daily benefit amounts,and then some of the additional benefits that are in ltc4that are not in ltc3. pages 10, 11, and 12 provide an example of3-, 6-, and 10-year premiums for a policy thatincludes a $200 daily benefit allowance for age bands 40 through70, as
well as the pricing of the optional benefits.page 13 is an example premium for base and optional benefits for a 50-year old participant.the table also illustrates premiums associatedwith the benefit design for married participant discounts.pages 14 and 15 illustrate the premium and benefitdesign for 3-, 6-, and 10-year policies compared to thejohn hancock product and the federal long-term care program.this concludes my presentation. are there chairperson mathur: thank you.dr. diehr. vice chairperson diehr: good morning. on page47 i'd asked in the briefing that this footnote
1. thisis -- sorry. this is 47 of the board books. it's 13 ofthe item. marital discount applies when both spousesapply. if both pass, a 25 percent discount applied.if only one spouse passes, a 10 percent discount is applied.so as i understand both apply, one of them is denied,so they don't get. the other one gets a 10 percentdiscount. and i don't -- i don't understand why there shouldbe 10 percent cheaper for that person than if theyjust had
applied as a single person. what do we knowabout it if your spouse doesn't pass and you do that makesyou less risky, i guess is the answer?office of health plan administration chief donneson: right. yes. if they pass underwriting,they -- depending on the age at issue, that will, youknow, be associated with a risk. but the single policyholder does not get to have a discount.so you're right, if both pass, it's 25 percent. if oneof the two passes, it's 10 percent.chairperson mathur: but is that meant to incentivize people to apply?office of health plan administration chief
donneson: yes.chairperson mathur: that's really what it is.it's not based on the risk? vice chairperson diehr: so my understandingthat if you're in poor health, it's pretty hardto fake good health. but if you're in good health, youcan fake poor health. so you and your spouse apply. yourspouse wants it. you don't. you get the doctor to giveyou something, and a note that says we're surprised thisperson isn't already in long-term care. and do you geta 10 percent
discount, is that right?anyway. okay. i have other -- (laughter.)deputy executive officer boynton: the most nefarious, yes, can find a way around ourunderwriting. (laughter.)vice chairperson diehr: well, people figure these things out.i have other questions because when confronted with numbers, i cannot help myself. i haveto calculate them and divide them, but i will ask you off-linebecause they -- everybody else would just -- theireyes would roll and things like that.(laughter.)
vice chairperson diehr: so i'll send an emailto you and you get the actuaries to respond.office of health plan administration chief donneson: yes.vice chairperson diehr: thank you. i think that's it.chairperson mathur: thank you for saving the rest of us.(laughter.) vice chairperson diehr: you're welcome.chairperson mathur: any further questions onthis item? mr. slaton.board member slaton: thank you, madam chair. this is on page 14 where you're doing thecomparisons to
john hancock and the federal program. didyou look at any other long-term care, because when i lookat these numbers, you know, obviously our price is-- i don't know how the federal program is designed, but itcalls into question the numbers are so low in certaincases that it makes me wonder if it's actually a valid programin terms of its self-sufficiency.but on the -- we are less expensive than john hancock. did we look at other commercial providersto see where we lined up, because there's quite adifference
here?office of health plan administration chief donneson: although not illustrated here, whenoliver wyman did the market study for us, we didlook at pricing across a number of different carriers. itincluded genworth, metropolitan life. so we used thesefor illustration.board member slaton: right. so do we fall inthe median or where do we call compared to the -- i'd muchrather see a comparison to commercial than the federalprogram, because i just think that they have
maybe asharper pencil. office of health plan administration chiefdonneson: actually, the pricing falls within about themid-range of other carriers that are not shown here. andthe difference between the federal government pricing andour pricing relates to the discount rate they use, whichis six and a half percent versus our 5.75 percent.board member slaton: okay. all right. thank you very much. thank you, madam chair.chairperson mathur: thank you. i see no further requests. you've done such a good job withthe agenda
item, nobody has any questions.we'll move on to agenda item number 9, long-term care financing options.office of health plan administration chief donneson: this agenda item is an informationitem that describes options that can be considered topreserve the long-term care fund sustainability and stabilizepremium rates for current participants. the presentationof the 2013 actuarial valuation in october demonstratedan improvement in the long-term care program'sfunded status, which showed a -- the valuation showed a marginof 19.66
percent, which is 9.66 percent higher thanour threshold 10 percent margin.the valuation did provide example or evidence ofthe effectiveness of the 2012 stabilization efforts thatwere adopted by the board. the actuarial calculations supplied in the 2013 valuation are based ona number of assumptions about very long-term participantdemographic and economic behavior.for example, as shown in table 2 of the agenda item, when the discount rate, which is currently5.75 percent, is changed up or down by a half percent,the
approximate impact on the margin is a plusor minus 10 percent.the conversion rate for participants eligible tomake an election for the 10-, 6-, or 3-year policies in2013 was 28 percent, which was higher than the percentageassumed during the premium increase determination. because the actual conversion was not evenlydistributed across all ages and was concentrated moreon ages where fewer savings could be achieved, the impactof the margin is less than might be expected. however, the28 percent
conversion did improve the margin by approximatelyfour percent.as shown in the table on page three, going forward in future conversion rates with theassumption that is used, the impact to the margin wouldbe plus or minus one percent.as noted on page four and five, a return of fivepercent going forward reduces the margin significantly from the current level. that's a five percentdiscount rate going forward. we recognize that thepending rate increase is very difficult and presents avery challenging
decision for many policyholders, but we suggestthat the committee wait until we have another fullyear of fiscal experience before re-evaluating the currentlyapproved rate increase.that valuation will be presented to you in october 2014, at which point we believe wewould have adequate time to revise the rate increasebefore the 2015 implementation.that concludes my presentation. are there vice chairperson diehr: a key table is thisone on page four, board book page 55, the rateincrease at the
five percent. so this is october. as i understandthat's almost a year away. i guess i'd like to -- thisis a very key table, i think, to show the impact. andi guess, at that time, i'd like to see with -- you know,columns with different assumed instead of the five percentwith five -- i don't recommend going over 5.75,but some variations in there, so we can -- thank you.chairperson mathur: good idea. mr. cobb.acting committee member cobb: i'm looking atthe -- at the table showing the lct1 population
and lct2and how many members are on claim. and i was kind ofstruck by just how many more lct -- you know what -- sucha larger -- a much larger proportion of lct1 members onclaim than lct2? and what accounts for the difference inthe claims experience? office of health plan administration chiefdonneson: well, ltc1 was introduced in 1995. and i thinkwe would have to look at the age mix and demographics ofthat population, and then fast forward to now to look atthe claims. ltc2 was introduced at a later
date.deputy executive officer boynton: we can follow back up with you on some experience studyaround the difference between the two.acting committee member cobb: okay. thank you.chairperson mathur: thank you. mr. jelincic.committee member jelincic: yeah. i just want toremind everybody that while it may be too early to make adecision, we did make a commitment that the savings wouldget passed back to those who got their premiums jerked upthe most.
chairperson mathur: i don't think we did makesuch a commitment. i think we said we would look at it.but it will -- we will revisit in the future years.okay. i see no further requests to speak, sowe'll move on to agenda item number 10, leading practicesin maternity health benefits. (thereupon an overhead presentation waspresented as follows.) deputy executive officer boynton: thank you.as the presenters get settled, a little bit ofcontext of why we're doing this now. we're trying -- we aremaking a
concerted effort to present to you and tothe constituents in an open setting to engender better dialoguepotential benefit changes that we are considering asstaff that we feel have gone -- you know, that we've gotenough information about the viability of that kindof a change, so that we want to sunshine it before we wouldbring it to you for consideration of adoption relativeto the rate discussion. we think this is a much more transparentway for us to present to you and to constituentsbenefit
design changes that will necessarily impactthem in their daily lives.so with that, mr. mckeever. health policy research division chief mckeever:good morning, madam chair, members of the committee. doug mckeever, calpers staff.this is a great item to bring before you, becausefrankly, it's one that is kind of near and dear to me,given the subject matter. and it's one that has and isreceiving a lot of national attention and discussionrelative to an individual determining whether or notthey're going to have a birth of their child
pre-39 weeks,and that's really what we're talking about. and let me put it in a little context andi'll use myself as an example. having twins sometimeago who were pre-39 weeks, but it wasn't a voluntaryelection. it was something medically necessary. and dueto the health of the mom and the children, they needed toenter this world a little bit sooner than we had hopedand expected. but what we're talking about today is notthat type of a case. it is more in line with whathas seemed
to become more prevalent today with the statisticsnow at a little bit about 30 some odd percent nationallyof those deliveries that are taking place pre-39 weeks.and it's voluntary. it's based upon either the mommaking a choice that they want to have a baby in a certainmonth or a certain day or a doctor who is deliveringbabies and happens to have a vacation scheduled thatnext week. and so for the convenience of that doctor, thec-section is scheduled. these are some of the types ofactivities that
occur with these pre-39 week deliveries.but the issue here is really to the health of themom and the baby. and when you do have an electivesurgery pre-39 weeks, either be it a natural or ac-section, certainly with a c-section the complications goup and the health of the mom and the baby are at risk.and so the discussion today is really looking atwhat are some of the discussions taking place across thecountry to deal with this particular issue? and so i think what you'll find is that, asms.
boynton mentioned last month, in the let'sget healthy california study, one of the areas that theytalked about was payment reform in the area of maternity.and when a pre-39 week delivery occurs, if it is notmedically necessary, are there different ways that weas purchasers can pay for those types of deliveries or notpay for those types of deliveries.so there's a lot of discussion in this space thatis cited in the agenda item. particularly one of themost, i think, interesting is what south carolina
isdoing, in which in the medicaid population they havebasically indicated that if it is not medically necessaryand it has not proven to be such, frankly there is nopayment made to the provider or the doctor in the cases inwhich someone has had a baby pre-39 weeks and it is notmedically necessary. that's one option that's currentlyout there that's being locked at. there's blended payments that are currentlybeing looked at as well. rather than paying foreither a
c-section or a natural, there's a blendedmethod of paying for what they just say as the birth.and so what calpers is doing is we're researching and analyzing all of those various optionsand determining whether or not we ought to venture into thatworld of changing our payment method in this space.and again, i want to reinforce, this is really not an issueof cost savings. although cost savings will becomeapparent if we change our payment models, because if yougo into the nicu there's huge costs associated with babiesgoing into a
nicu.but the issue here is not really based on cost,it's based on the health of the baby and the mom. that'swhat's driving this conversation. there will be acorresponding health -- cost benefit on the back end.now we're fortunate today to have dr. sonia soohoo with us from kaiser permanente. she's going toprovide you with a brief presentation on what kaiser isdoing in this area. and then obviously she's here toanswer any questions that you may have.
doctor.(thereupon an overhead presentation was presented as follows.)chairperson mathur: welcome. dr. soo hoo: good morning, madam chair, membersof the board. sonia soo hoo, kaiser permanente. it's my pleasure to talk to you today aboutthis very important health issue. and over thenext 10 minutes i'd like to talk about what we at kaiser permanenteare doing to address this.but before i begin, i want to say that having babies is common. and i'm going to do a littledemonstration here. so i want you to raise a finger ifyou've had a baby, if you had baby?
now, i want you to raise a finger if you havea spouse, wife, who has had a baby.now, i want you to raise a finger if you've beena baby. (laughter.)dr. soo hoo: so raise a finger if you're still ababy. (laughter.)dr. soo hoo: so having babies is a universal experience and it behooves us to make surethat we make this experience a good one and a safe one.now, here's the thing about maternity care. wehave women in the workforce, and they're in
key positions,right? look around, we've got women in key positions, andthey have babies. but here's the thing about maternitycare, there's a lot of moving parts. so there's prenatalvisits, there's ultrasounds, there's a bunch of labs, andthen finally you're admitted to the hospital for yourdelivery. so it's simple, but even in the bestcircumstances there's a lot of steps. so i've been anob/gyn with kaiser permanente for 20 years. so i've beentaking care of calpers members who are pregnant
for areally long time. and there's three things about where iwork. first of all, we're integrated, so our doctors andour hospitals work together to take care of the patients.we cooperate, and that's a big thing. second of all, we're prepaid, so we have areally big focus on prevention and safety.and the third thing is sort of newer, but we'vegot an electronic medical record, so all the parts cantalk to each other. --o0o--dr. soo hoo: so where i work, we deliver a
lotof babies. and about two percent of your calpers membersdeliver with us, 9,000 babies. a lot of babies. so thankyou. now, volume matters when you have babies,because if your labor and delivery sees a lot of deliveries,they know -- they've seen the bad things that canhappen and they know what to do in an emergency. andin an integrated system, we can learn from the experienceof this big volume having babies. so the littlequote that
someone gave me is that we deliver 92,000babies in 2011, 50,000 in california alone, which is the sizeof oregon. --o0o--dr. soo hoo: so i want to say a couple of thingsabout two worrisome trends in maternity care that's not sogood for the health of the mom and babies. first of all, i think there are too many cesareansections instead of normal vaginal deliveries. and secondof all, i think there's too many pre-term deliveries thataren't really medically necessary. --o0o--dr. soo hoo: in other words, delivering babies
just for the sake of the convenience of themom or the doctor is not a good idea. we can take bettercare of moms and babies. and like doug said, whenyou take better care of moms and babies, you actually reducecosts. so let's talk about cesarean section, and -- sothere's three things.--o0o-- dr. soo hoo: well, let me say cesarean section,you make a cut on the abdomen, you make a cut on theuterus, you deliver a baby through the abdomen instead offrom down below. and doug said don't get so
graphic onthe down below. (laughter.)dr. soo hoo: three things about c-sections. therate is rising. so when i was an intern, the cesareansection rate, so the number of sections per 100 deliverieswas about 17 percent. now, it's about 33 percent. so adoubling nearly in the 20 years i've been practicing. andthe thing is there's been no improvement in the health ofthe babies or the moms over those years of practice.and there's a vast variation between hospitals,
and even between countries, in c-section rates.so you go to one hospital and it's a 50 percent c-sectionrate. you go to another one it's 17 percent. then yougo to brazil and it's 85 percent.so i want to look at the data. --o0o--dr. soo hoo: and you know people are saying, well, what's causing this? and there couldbe a lot of things. it could be maternal age. it couldbe maternal obesity. maybe mom requests a c-section. maybepeople are afraid of med mal, but let's look at thedata here.
yeah, that one. that one.okay. so about 25 percent of women delivering atkaiser permanente hospitals have c-sections. and if youlook at the california average, it's about 30 percent.and then you look at for profit hospitals, and it's a good34 percent. the national average, at this time, was about30 percent. now, normal births have shorter hospital stays.they cost less, and moms get better quicker. and we knowthat with repeat c-sections that's related to morecomplications and more hemorrhage, so we really
want tolook at the rate of initial c-sections. now, there's a couple of weird things thathappen with fee-for-service medicine and deliveringbabies. the first one is that you're paid more if youdo a cesarean section. if you're the doctor, if you're thehospital, you're paid more in fee-for-service medicine.the second thing is you don't get paid unless youpersonally do the delivery. okay. so it seems a littleunfair if you're the ob, i think. you're spending allnight with this woman in labor. she finally
deliversvaginally at 3:00 in the morning, and they do deliver at3:00 in the morning, and you achieve a normal vaginaldelivery and you get reimbursed less than if you had justdecided to do the c-section at 6:00 pm the night before,called it a day and gone home to your family. it seems alittle weird. so let's look at the data for calpers momsdelivering at kaiser permanente. --o0o--dr. soo hoo: so you're rate, and these are yourdeliveries, is about 28 percent with a background
of anational rate of about 33 percent. so where i work, wehave a hospitalist, a laborist they call them, in thehospital 24/7. and their sole purpose is to look afteryou during your labor and delivery. and i'm paid thesame, whether i deliver you vaginally or you deliver byc-section, and so is the hospital. --o0o--dr. soo hoo: so the next one is vbacs. and thatstands for vaginal birth after cesarean section. it turnsout that you can safely have a baby vaginally
after havinga c-section. you have to have requirements at thehospital so you do it safely, but you can certainly do it.and our professional organizations are recommending thatwomen be offered that trial. if you offer a vbac, that's another way ofbringing down the c-section rate. so let's look at thedata. so i think this data shows that if you want to beoffered a vaginal birth after cesarean section, youprobably better be at a kaiser permanente hospital. whydon't others do it? i would say the same incentives
areat play. so now let's talk about 39-week deliveries.--o0o-- dr. soo hoo: so what's the story about 39weeks, right? so 39 weeks. it turns out with babies,the last thing to develop are the lungs. and you haveto make the this stuff called surfactant that helps youinflate the lungs when you're born and then you have tobreathe air. and we used to think, oh, get close to 39weeks. it will be fine. but it turns out it's not, so expertswith the
american college of ob/gyn as well as themarch of dimes said you must get to 39 weeks or the babyis not going to be mature and end up in the neonatal icu.so sometimes there's medical reasons to deliver before 39 weeks, like doug's story, but they'repretty rare. and we know that if we do these earlydeliveries, it's going to increase the risk of infantmortality and all also raise the risk of postpartum hemorrhagefor mom, and mean that babies end up in the neonatalicu, and it costs about 17 percent more, mostly due tothe longer stay
in the nicu for babies that are deliveredprematurely. so you're thinking why does this happen? whyare we delivering into prematurity. well, it'sabout convenience. doctors want to schedule at theirconvenience. patients asked to schedule at theirconvenience. so we induce labor or we do the electivec-section before 39 weeks, and so we get these prematurebabies. so where i work, we have an electronic medicalrecord that acts as a stop, so if one of us tries toschedule it under 39 weeks, the process says
wait aminute. here are the dates. you're under 39 weeks. youhave to go talk to the chief of service. so electronicrecord knows the dates, have a process that says thisisn't a good idea. here's what you do. and the datashows that hard stops are really the only way to bringdown this rate of under 39-week deliveries. so with us it wasn't always like this. youknow, acog came out with a recommendation in about2009. and so we measured our rate in 2010, and you cansee up there it
was about 12 to 15 percent. and that's whenwe sat down as a group and said, huh-uh let's set thisset as a goal. and so we educated the doctors, we educatednurses, we educated the patients and then we all geton board to understand that this less than 39-week deliveriesare not safe for a baby. and then let's look at thedata. so 2010 is about when we measure it first,and it's 12 to 15 percent. we put in the hardstop, and 2011 it's now four percent.now, the joint commission that looks at safety
inhospitals have a 2010 goal of five percent. no one isthere. so then the 2020 goal is now five percent. and wewere pretty proud of ourselves. and at first i was onlygoing to put the four percent. but we keep doing whatwe're doing and now we're down at one percent, so it canbe done. and it's simply better care. so fewer peoplein the nicu, fewer babies with immature lungs.i benefit when my patients stay healthy. i coordinatewith the
hospitals, and then we use this electronicmedical record to make these things get done.so those are the two ways to reverse these dangerous trends. normal vaginal deliveriesover c-sections is the norm. and no more of thesepre-term births, less than 39 weeks, when there's noreal reason for them.--o0o-- dr. soo hoo: so i think there are a lot ofways to get there, and doug mentioned a couplethem, bundled payment, performance guarantees. this is theway you did
it with us. and i'd say the moral of the storyis delivering a baby at a time and route that'sdetermined by convenience only is not a good idea. no babydelivered before her time. thanks so much for the privilegeof taking care of your moms and babies.chairperson mathur: thank you. deputy executive officer boynton: just a followup. as dr. soo hoo indicated, the pre-39 week inductions,we have other hospital systems in california who are doinga very good job also have a near zero rate. that'sgetting a lot of attention. we feel like that's
sort ofon the right track. the question of vaginal versusc-section is the core of what we will continue to discusswith you and be, subject to your direction, considering inour rate discussions with you. i was talking to a young mom recently -- imean, it's not just the hospitals frankly that haveall these perverse incentives on how we deliver babies.i was talking to a brand new mom recently, and she-- the baby is great. she's doing -- the mom is doinggreat. but the
mom says to me, "you know, i had a c-sectionand i recovered so fast, and i got an extra twoweeks off because i had a c-section. and i'm so totallygoing to do that next time".and what's that -- that's a driver from the waywe as a state handle our disability insurance which coversmoms. so we've got an incentive that gives her two extraweeks with her baby for getting a c-section, which is notas good for her and not as good for the baby and costs usa lot more, instead of just giving her an
extra two weeksno matter what, set that the same time. so we've got -- systemically, as i mentionedearlier, we've got a -- at the beginning of our committeemeeting, we've got a lot of systemic issues that have tobe addressed. the amount of time we have on sdi beingone, but there are ways that we can begin to think aboutimpacting the vaginal versus c-section rates. by the way,we approach our reimbursement to the hospitals themselves,and it's -- we've talked about it with some of thehospital groups and the physician groups.
it wouldn't bean easy thing to do, but we do think we can get toessentially a blended rate that's, as doug mentioned,lower than a c-section rate, higher than a vaginaldelivery rate that would begin to provide for thosehospitals who aren't already progressing themselves thatdirection and additional incentive to allow the moms to gothrough the -- a vaginal delivery, if at all possible.doug, did you have anything you want to add? health policy research division chief mckeever:no.
deputy executive officer boynton: happy toanswer questions. chairperson mathur: well, as someone who'sbeen pregnant twice in two years -- the past twoyears, i remember very well the education and informationi received around my pregnancy and delivery.and i feel very fortunate, because i was actually partof something called a centering program. i don't know ifyou have that at kaiser, but it's where a group of womengo through their pregnancy together. and what it hasdemonstrated is
also a marked decrease in complications, etcetera, but also in cesareans and other interventions.so i think that is something we ought to be encouragingmore broadly across hospitals and medical plans.i also find it very perplexing that women wouldwant to deliver their child earlier. as hard as it is tobe pregnant, and it can be hard, particularly in the lastfew months, it is much harder to be a mom of a newborn.and i tell you, you might be carrying a lot of weight whenyou're pregnant, but you're caring that kid
all the timeafter it comes out. so it is just -- it's hard work beinga parent of a newborn. all right. well, we have other members ofthe committee who wish to speak, but i just thoughti'd share those personal stories.(laughter.) chairperson mathur: mr. slaton.board member slaton: thank you, madam chair. first of all, i've never had a baby.(laughter.) board member slaton: but my wife has. we havea year old and a 29 year old. so that's -- youknow, go
back to those years. and, you know, the firstone was by c-section. and by wife really wanted to havea vbac. and there was such pressure to have another c-sectionthat she literally stayed home till the last moment,and luckily, successfully we had a vbac. but i think weprobably took more risk than we probably should have, butshe was 41 and she believed that had she gone into the hospitalearly, she would have ended up with a c-section,because she might not have progressed as fast as the standardswould
have permitted or would have indicated.i'm intrigued by the figures. and, to me, thetwo numbers that are -- that really stand out in yourpresentation, first of all, the one percent for early.and i think that should be a standard that we should tryto get to for calpers members. you've proved that thatcan work and that you have successful outcomes by gettingthere. so i think that's a measurement. the other one is the 25 percent. that's the2011 number for c-sections. i still find that numberto be
high. and do you have any data going backbefore modern insurance policies and the issues we've hadwith doctor's liability coverage, so forth, that would indicatemaybe that 25 percent number is still high eventhough you're lower than the california average? would youcomment on that, please?dr. soo hoo: yeah. where it ought to set, whereshould the standard be for vaginal delivery versusc-section no one really knows. you know they tried to setit at, i think it was, 17, 15 percent in 2010,
and thatcame and went. and so now people are talking 24 percent,somewhere around there. and then you have to be careful how you measureit and all, because it's -- you know, it's complicated.but it's driven by a lot of factors, a lot of factors,like i said, twins, older moms, that sort of thing. but alot of it also is this gray zone where you're watchingsomebody in labor and, you know, do i call it and do thesection? do i keep going? board member slaton: but you feel the numberbeing at 25 percent that you are from a -- obviously
as aprofessional, as a medical doctor, you know, that, fromyour viewpoint, kaiser is kind of where it needs to be.dr. soo hoo: yeah, i think we're 25, 28 percent. and i think that better care floats all boats,so that if it gets out there that the way to go isn'tc-section after c-section after c-section and patients areeducated around that, then they pressure doctors. they'renot saying, oh, let me just do another c-section, becauseit turns out if you keep doing all these c-sections, the chancesthat the
placenta then grows into the scar, and youhave this postpartum hemorrhage, that's a disaster andthat's the leading cause of death in california rightnow. and that's increasing over the years.and see, that's the stuff that people don't knowwhen they're thinking, okay, i'll just come in for asection. i'll get two more weeks off of work. i couldschedule when it is. i just go in, have the baby, and outof there. i don't have to labor. but you don't hear theother side of it. if you're going to have
more kids, thenthese other things. board member slaton: so outside of kaiser,if we reached a 25 percent number, you'd feel we'vegotten to where we need to be.dr. soo hoo: yeah, i'd feel pretty good about 25percent. board member slaton: okay. great.dr. soo hoo: i don't like this 33 higher, higher, higher. i don't like that trend.board member slaton: okay. thank you very much.thank you, madam chair. chairperson mathur: i do think women in theu.s.
are really scared about delivery. you know,we are told horrific stories. i tell you when i was pregnant,every other person told me a terrible story abouteither delivery or babies. it was just -- it wasremarkable how all of a sudden i became a target for thesestories. but i think that might be part of what's drivingwomen to c-sections is they are just terrified of the painof delivery. and it's not comfortable, but anyway thereare other ways to handle pain, too. ms. holton-hodson.acting committee member holton-hodson: at
themoment, is there any performance guarantees that we haverelated to this or is this when you come back -- when youcome back in january and february when we're having thesediscussions will that be the first time we're reallythinking about sending the message to our providers thatwe really want to see the needle moved on this?health policy research division chief mckeever: ms. holton-hodson, we currently have performanceguarantees in the contracts for this area. acting committee member holton-hodson: andwhat
are those guarantees?health policy research division chief mckeever: i don't have them at my --acting committee member holton-hodson: i mean what sort of benchmarks are we asking peopleto meet? health policy research division chief mckeever:i don't have them at my ready, but we'll be happyto share those with you. acting committee member holton-hodson: okay.great. thank you. chairperson mathur: thank you.mr. cobb. acting committee member cobb: it's interestingthat dynamic between the incentives that the sdi benefitpresents and -- you know, and then the push
towardc-sections. before i came to calpers, i worked in thepolicy area at edd in the sdi program, and we looked atpregnancy, duration. and back then in 1995 dollars, oneweek of additional benefit for a normal pregnancy wasabout $150 million a year. so their motivation is thecost impact to their program significant. so i think that the solution to -- the solutionwe'll have to find it on our side of the equation, butcertainly kaiser is proving that it can be done.chairperson mathur: thank you.
mr. boyken.acting committee member boyken: thank you forthe presentation. something you said kind of piqued myinterest. i've heard it before that in addition toconvenience, one reason for increased c-sections is fearof medical malpractice, but it seems like -- that seemscounterintuitive, based on what you're laying out in yourpresentation about the increased likelihood ofcomplications. but could you explain that, what's therationale that doctors have that --
dr. soo hoo: so i think it's driven by onething, electronic fetal monitoring. so we have this newtechnology -- well, it's not so new anymore, but thistechnology that comes out where you can watch a baby'sheartbeat every minute that she's in labor. and we putthat on, and it's become universal, even though we've seenno increase -- decrease in cerebral palsy or any realimprovement in baby's health. but you watch the heartrate, and when the heart rate drops, sometimes it meanssomething, sometimes it doesn't.
but if you're sitting there as the physician,you're thinking, okay, i'm going to read this as a badheart rate. let's go ahead and do the c-section. i'llnever get sued for doing a c-section too often, but i willbe if i don't. and so that's where i think the med malcomes from. acting committee member boyken: thank you.chairperson mathur: well, i think you've seen this has generated a lot of interest fromthe committee. i think there are some opportunities here.i know you all have already been thinking about them forvalue based
purchasing or other options around maternity.so are you planning to bring something back to the committeeat some point?deputy executive officer boynton: yeah. we will -- based on your interest, we will furtherdevelop some concepts that we will begin to discussrelative to how that might be implemented in a benefit,so that we can incorporate that into our rate conversationsthat are coming up incredibly quickly.chairperson mathur: very quickly. deputy executive officer boynton: in a merefour
months.chairperson mathur: good. well, we will look forward to hearing more about that.deputy executive officer boynton: thank you. chairperson mathur: all right. i see notfurther requests to speak, so we will move on -- we arenow at the end of our open session agenda. agenda item number 11 is public comment. ihave no requests to speak. does anyone from thepublic wish to comment at this time?seeing none, the open session is adjourned.
