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Innovation
Partnerships
Pharmaceuticals
Best Practices
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We serve those
who serve California
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1.4 Million
1.4 million total
covered lives in the
CalPERS health care
system
$9.3 Billion
$9.3 billion spent in
2017 to purchase
health benefits
1,200 Employers
1,200 public agencies
and schools contract
with us for health
benefits
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26%
2.2%
Lowest increase in 20 years
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Their choice
• Reduce benefits
• Shift to high deductible plans
• Lower the benefit package for
new employees
• Shift more costs and
responsibility to employees
Our choice
• Innovate with benefit design
• Improve transparency in
pharmacy contracts
• Partner for better programs
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Increased productivity
Reduced absenteeism
Improved morale
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Where our Health Care
dollars go
Inpatient and Hospital
Outpatient Services …………… 43%
Professional Services …………… 21%
Pharmacy …………………………. 17%
Lab and X-ray ………………..……. 8%
ER ……………………..……………. 7%
All Other ………………………….… 4%
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Value-Based Purchasing
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Reference Pricing
$15,000 $30,000 $110,000
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Sites of Care
Hospital Ambulatory Surgery Center
Home
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Pharmacy Benefit Contract
$10 co-pay $2 actual
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$5.5 millionJoint replacement of the knee or hipJan 2011-Dec 2012
$1.3 millionCataract surgery in first two years
$7 millionColonoscopy in first two years
$2.3 millionKnee or shoulder orthopedic proceduresin first two years$16.1 million
Total savings
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Value-Based Insurance Design
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High-Quality Coordinated Care
Opportunity for
disease prevention
Builds bridges
between patients and
health care providers
Provides a place
where health problems
can be treated
Guides patients through
the health system
Facilitates ongoing
relationship
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High deductible plans Value-based design
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Value and Affordability for Pharmaceuticals
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From 2011-2016
prescription drug
costs increased
12.07%
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The Challenges We Face to Value and Affordability
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TiersNumerical tiers
FormularyOpen-customized-
closed-excluded
Medical RxNo common codes, wide
variation in cost by site
PipelineNew drugs to market and
direct to consumer ads
PricingComplicated
pricing models
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Ways to Make Prescription Drugs More Affordable
Educate prescribers
on costs
Direct value-based
contracting
Unified purchasing More numerical tiersNegotiate superior
specialty drug pricing
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Health Care
Affordability
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Partnerships
Board of
Administration
Plan Providers
National & Local
Policy Coalitions
Statewide
Collaborations
Stakeholders
Employers
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Best Practices
Require transparencySupport employees in
improving their health
Be proactive at
Open Enrollment
Measure plan outcomes Data-driven decisions Leverage partnerships in
your communities
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Provide superior service in
the delivery of affordable
quality health care.