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Extended Interview: William Crist on Health Care Costs

William Crist is president of the board of the California Public Employees Retirement System (CalPERS). One of the nation's largest public pension systems, CalPERS also provides health insurance for more than one million people. Below are excerpts of his interview with Susan Dentzer.

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    When the CalPERS rate increases for 2003 were announced, back in April, many people wrote that this is a harbinger of things to come nationally. Are you a national weather vane of this crisis?


    Well, each state–and even within a great state like California–each region has different cost standards, different experiences, different age groups–but as we study across the entire nation, yes, indeed, this is a national crisis. And it's one in which–has moved us, actually, to take part in national coalitions. We became a member this year of the National Coalition in Health Care. It is my desire, and the desire of CalPERS, that while we're trying to protect our own beneficiaries our own members and do the best we can to build a good system internally, we have to take part in the national debate to raise the awareness of all the people that health care must be dealt with by the politicians, actually, in public policy debates.

    There's nothing going to happen much right away in this area because Congress is distracted by another crisis–the crisis of the stock markets and the lack of disclosure and transparency and the resulting bankruptcies that are just mind blowing and no one would have guessed some of these would have happened.

    But I think over the next year or two as we find more and more of these situations where defined contribution kinds of systems are put into place, that there will be a greater awareness.


    As a consequence of the changes made in terms of the numbers of plans participating, 300,000 workers, more or less, are going to have to switch plans. How difficult is that going to be for them?


    Well, it's very difficult. Over the last several years, as this consolidation has taken place, you know, in smaller pieces–actually last year there was a very large consolidation, as well. Changing a health plan is a difficult thing for any family, any individual. But we have a very good professional staff at CalPERS to give them the assistance they need and we have an overlap of the doctor and provider hospital–the provider network in California, so that not–this doesn't mean that all of them have to change doctors, for example. There's a paperwork requirement that's irksome but can be handled. Some of them will have to change physicians even. We don't like that at all but, again, when these HMOs simply pull themselves out of the race and say we don't want your business, because you can't pay us enough so that we can make the profit we need to use your business, what are you going to do?

    And it's like so much of what the situation in America's health care, now. You end up with this expression: What are you going to do? And, you know, it always–brings me always back to you just try to emphasize quality, you try to emphasize building your own best internal plan, you don't rely on any magic bullets anymore, any silver bullets. The new HMO business isn't going to come and competition isn't going to generate it anymore.

    This is why we have to go to the public debate and try to protect our people as General Electric tries to protect its people, the Safeway tries to protect it's people, the Teamsters try to protect their people, make sure that they have some coverage that they can afford. And every other union and every other business in America could be mentioned.

    Until the Congresswoman's daughter calls the Congressman and says, I've got this problem, I've got some health care bills I can't pay. And he said, well, why didn't your health insurance cover it? And she says, well, I don't have any health insurance. And the parent says why? I thought your employer provided it. Said, well, the employer did, and still does provide an amount but I had to take the amount of money that was available there and use it, you know, to pay the rent and I didn't think I would get sick. I'm a young person, I shouldn't be sick, Dad, but I am, and I have a problem. When that starts to happen more and more to the middle-class families–and it is–in this country, I think we'll get smart and turn our attention to a meaningful public policy debate.


    In spite of the great concern that you show and others show on behalf of the CalPERS workers, there are others who say that the CalPERS enrollees have it really good, even now, even as of 2003, a family–a large family would pay just about $1,000 a year for it's own health coverage through Kaiser and there are many parts of the country where people would view that as a steal. Do CalPERS enrollees have it good? Are benefits too generous and do they use health care too much?


    Our benefits and our access to them at CalPERS for our members are among the best in the country. Relative to the rest of the country and, certainly to certain large groups in place, they are very good.

    Relative to what our members were accustomed to, in recent years, they are diminished. Our co-pays are higher. Year-before-last we made a determination to raise co-pays, our deductibles are higher, the premiums are higher–the out-of-pocket is higher and we have really, really stressed the importance of maintaining of quality. So we haven't gone in and slashed the benefits. We haven't cut the benefits and we don't want to do that and that's why we're about trying to reorganize.

    Are the benefits too good? No. They're not too good–there as good as every citizen in America should have, but they are diminished from what they were, we want to keep them from being diminished anymore.