Pacific Business Group on Health Wins Bid to Manage Small Group Health Insurance Purchasing Pool
Small businesses offered more at reasonable prices for 1999-2000

San Francisco, CA, April 6, 1999 – The Pacific Business Group on Health (PBGH) won a competitive bidding process to manage Pacific Health Advantage (PacAdvantage), also known by its state-given name, the Health Insurance Plan of California, or HIPC. This purchasing pool of 7,700 small firms ($200 million in premiums), representing 150,000 workers and dependents, was established by the State of California in 1993 to provide small businesses with many of the advantages afforded to their larger counterparts. The pool's management under the State's Managed Risk Medical Insurance Board will end as of July 1st, when PBGH will assume full responsibility. The State and PBGH have been working together since December 1998 to ensure a smooth transition.

As the new Administrator of PacAdvantage, PBGH offers its energy and commitment to build upon the State's successful foundation in starting up the pool. "PBGH is renowned for its value based purchasing focusing on both cost and quality of care. Their administration of PacAdvantage will benefit large and small businesses alike by leveraging purchasing power to offer employees choice, simplicity, and affordable health care," said Sandra Shewry, Executive Director of the Managed Risk Medical Insurance Board. PacAdvantage allows workers in firms with 2-50 employees to each select from a menu of health and other benefit offerings. Small businesses outside of the pool typically offer only one health plan to their workforce.

1999-2000 Trend Kept in line with Large Purchasers
For the fifteen health plans participating in Pacific Health Advantage, PBGH negotiated a rate trend of 4.6% exclusive of financially troubled Kaiser; 8% with Kaiser, effective July, 1999. This is consistent with the PBGH large employer trend for 1999. Prices are good for one year from the time an employer signs up with the pool. "We agreed to part ways with several health plans that were not competitive for small firms," noted Patricia E. Powers, President of PBGH and PacAdvantage. "Several were added, however, and there are many health plans from which to choose. We also added a new dental PPO product and offer vision coverage for the first time. We know that busy business owners and their brokers enjoy one-stop shopping when it comes to benefits, " said Powers. Another new feature to the pool is the offering of a health plan with a $10 copayment, in addition to the $5 and $15 copayment options. PBGH also negotiated performance guarantees for the first time, meaning that health plans agree to continuously improve their service and quality for small firms, just as they do for their very large customers.

Electronic and Other Innovations to Assist Brokers
PBGH is enthusiastic about offering newly streamlined services to the brokerage community to facilitate their sales and administration for PacAdvantage customers. A new interactive website will provide information on benefits, price modeling, and marketing support for brokers (www.pacadvantage.org). In addition, small employers and their employees can access an online directory of medical, dental, and vision providers, including information on quality of care (www.pbgh.thehealthpages.com).

About PBGH
This year marks the tenth anniversary of PBGH, the nation's preeminent nonprofit business health coalition dedicated to improving the quality of health care and moderating costs. PBGH represents thirty-two large private and public sector purchasers, twenty-one of which participate in the Negotiating Alliance. The coalition's four strategic initiatives focus on quality, cost, data, and partnering.

To learn more about PacAdvantage:

• Call your broker
• Call 1-877-4PACADV
• Visit www.pacadvantage.org

Contact:
Clark Miller
Senior Communications Manager
Pacific Business Group on Health
Telephone: (415) 615–6302
E–mail: cmiller@pbgh.org

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