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Keenan's California Public Employers Program (CAPEP) Provides Key Long Term Health Cost Management Benefit to Public Agencies

Posted on: Wednesday, 5 October 2005, 15:00 CDT

Keenan, the largest privately held brokerage firm in California and the state's largest supplier of insurance programs to public agencies, reported today that features of their California Public Employers Program (CAPEP) will be the key to long term cost management and control of health care inflation. By gaining the participation of some of the best, most trusted health plans in the state, including Blue Cross, Kaiser and PacifiCare, CAPEP will have the capability to moderate health care cost trends for school districts, cities, counties, community colleges and other local agencies throughout California. There are currently about 3,000 CAPEP participants.

According to Alain C. Enthoven, Ph.D, a nationally recognized expert on health care managed competition, "CAPEP offers employers choice among three strong health plan competitors and a good balance between simplicity and flexibility in plan design." Dr. Enthoven, Emeritus Professor at the Stanford University Graduate School of Business in Palo Alto, explains, "The post-enrollment risk adjustment methodology gives the health plans greater predictability and reduces their need to price for an extra margin of reserves against adverse selection. This is leading edge technology."

Enthoven is Chairman of Keenan's Advisory Board, and has played an instrumental role in shaping the CAPEP program. The post-enrollment risk adjustment methodology provides greater cost predictability for health plans. It allows health plans to obtain a truer picture of expected claims experience and eliminate the need to build in excess premium amounts to account for the uncertainty of the group risk characteristics they are covering.

Tom Williams, Executive Director of the Integrated Healthcare Association (IHA), said, "IHA has a policy position which states that the primary goal of risk adjustment is to encourage health plans to compete on the basis of quality and efficiency, not risk selection. This program appears to be designed with this perspective in mind." IHA pioneered the Pay For Performance Program (P4P), a statewide initiative to provide incentives for enhancing health care quality and improve outcomes.

Steven Scott, General Manager of Large Group Public Entities for Blue Cross of California, says, "The financial structure of the CAPEP program offers participants the benefit of large group resource pooling, in a structure that allows Blue Cross to support high quality medical service that is cost effective to the employer groups."

PacifiCare Vice President - Middle Market Sales, Michael Mallory, says, "CAPEP's unique approach to mitigate the selection risk allows PacifiCare to focus on delivering on our value proposition, which includes managing healthcare cost and quality, providing data and tools for making informed decisions, developing industry leading products and providing customer service to our members and employers."

Henry Loubet, Chief Strategy Officer for Keenan, states, "Our innovative program design, coupled with the strength of PacifiCare, Blue Cross and Kaiser, makes it possible for public agencies to achieve a great deal of flexibility in their health plan offerings while maintaining long-term control over medical cost increases."

CAPEP is a fully insured, fully pooled group purchase of health care insurance designed specifically for California public agencies and public schools. This managed competition program includes a total of 12 HMO and eight PPO health plan options. The program is maintained, serviced, and administered by Keenan.

About Keenan

Founded in 1972, Keenan is the 17th largest insurance brokerage firm in the United States, and the largest independent broker in California. Keenan is dedicated to providing superior insurance products and services to schools, community colleges, municipalities, and healthcare organizations that include employee benefits, third-party claims administration, workers' compensation, integrated disability, risk management, and property and liability. Keenan has a network of offices located throughout California and a staff of more than 600 insurance specialists. For more information, call 1-800-654-8102, 1-310-212-3344 or email info@keenan.com. Visit our web site at www.keenan.com.

Source: Business Wire

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