INDIANAPOLIS--(BUSINESS WIRE)--Jun. 23, 2013--
A pilot program for the California Public Employees’ Retirement System
lowered the price of members’ hip and knee replacement surgeries by 19
percent in one year while also demonstrating similar to better outcomes
at lower-cost hospitals.
The analysis, conducted by HealthCore, WellPoint’s outcomes research
company, will be presented at the AcademyHealth Annual Research Meeting
today in Baltimore. The study is based on findings for the
referenced-based purchasing design program for CalPERS members developed
by CalPERS and WellPoint’s affiliated health plan in California.
In May, the Centers for Medicaid and Medicare Services released a
database of 2011 hospital charges for Medicare services showing a wide
disparity in charges for some services by hospitals in the same areas.
California hospital charges for total knee replacement and total hip
replacement surgeries ranged from $15,000 to $110,000 without evidence
of difference in outcome or quality, according to WellPoint’s California
affiliated health plan analysis conducted in 2009.
“We are pleased to see this program resulted in both substantial savings
for CalPERS, and on several measures, with higher quality outcomes for
its members,” said Dr. Sam Nussbaum, WellPoint chief medical officer.
“Our programs demonstrate the power of innovative product design,
aligned financial incentives and better informed decision-making.”
As part of the CalPERS intervention program, members of the California
Public Employees’ Retirement System were given a list of designated
facilities that charged less than $30,000 for in-patient costs
associated with each knee and hip replacement surgery.
To qualify for the list, hospitals had to have already contracted with
the network of WellPoint’s California affiliated health plan, which
manages a robust credentialing process. Participation includes requiring
all participating hospitals maintain accreditation by at least one of
several nationally renowned accreditation organizations. In addition,
hospitals had to perform enough procedures to ensure results could
represent credible measurement that positively demonstrated the
hospital’s skill in the surgeries.
Members were able to either choose from 46 facilities on the list that
would result in them paying little to no out-of-pocket costs beyond
deductible or co-insurance or pay the difference if they used another
facility that charged more than $30,000.
The result was that CalPERS health plan costs dropped significantly – by
19 percent from $35,408 to $28,695, per surgical-related admission.
“This program was an effective tool in managing costs as we all know
that current spending levels are not sustainable if we’re going to
provide benefits that are affordable now and into the future,” said Ann
Boynton, deputy executive officer for Benefit Programs Policy and
Planning for the California Public Employees’ Retirement System, which
has 356,543 PPO members in California served by WellPoint’s affiliated
“We believe that innovative benefit design is an important component of
controlling health care costs and increasing access to quality care,”
said Ken Goulet, WellPoint executive vice president for Commercial and
Specialty Business. “As we continue developing benefits that have a
positive impact on cost and quality for employers and consumers,
HealthCore’s research findings offer validation that we are not only
making progress, we are actually moving the needle.”
The analysis also found:
Use of designated facilities increased by 21 percent by CalPERS members
Member out-of-pocket costs remained relatively flat from 2011 to 2012
Outcomes were either equivalent or better in the group using the
CalPERS members had significantly lower 30-day general infection
rates than non-CalPERS members
CalPERS members had significantly lower general complication rates
in 30 days than non-CalPERS members
The study compared utilization of CalPERS PPO members of WellPoint’s
affiliated health plan in California. The analysis used administrative
medical claims for patients who had elective, non-emergency total knee
replacement or total hip replacement surgeries from Jan. 1, 2010 and
Dec. 31, 2011.
At WellPoint (NYSE: WLP), we believe there is an important connection
between our members’ health and well-being—and the value we bring our
customers and shareholders. So each day we work to improve the health of
our members and their communities. And, we can make a real difference
since we have nearly 36 million people in our affiliated health plans,
and nearly 68 million people served through our subsidiaries. As an
independent licensee of the Blue Cross and Blue Shield Association,
WellPoint serves members as the Blue Cross licensee for California; and
as the Blue Cross and Blue Shield licensee for Colorado, Connecticut,
Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in
the Kansas City area), Nevada, New Hampshire, New York (as the Blue
Cross Blue Shield licensee in 10 New York City metropolitan and
surrounding counties and as the Blue Cross or Blue Cross Blue Shield
licensee in selected upstate counties only), Ohio, Virginia (excluding
the Northern Virginia suburbs of Washington, D.C.), and Wisconsin. In a
majority of these service areas, WellPoint’s plans do business as Anthem
Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue
Shield of Georgia and Empire Blue Cross Blue Shield, or Empire Blue
Cross (in the New York service areas). We also serve customers in
several additional states through our Amerigroup subsidiary and in
certain markets through our CareMore subsidiary. Our 1-800 CONTACTS,
Inc. subsidiary offers customers online sales of contact lenses,
eyeglasses and other ocular products. Additional information about
WellPoint is available at www.wellpoint.com.
Kristin Binns, 917-697-7802