State seeks bids for health care

Savings of $1.3 billion forecasted

 

The state’s Group Insurance Commission issued a request for proposals on Wednesday that is expected to change the way its 400,000 members are insured and to cut expenses by nearly $1.3 billion over the life of the five-year contract.

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Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

The GIC said it is adopting a new purchasing model that will shift more risk on to insurance carriers and health providers, requiring them to stay within budget targets on a per-member per-year basis. Carriers who stay below those targets will be able to pocket the savings, while those who exceed the targets will pay penalties. The agency said it expects care to improve and benefits to remain the same under the new system.

While such an approach would have been challenging to implement in the recent past, it is now not only a viable strategy, but one whose time has come,” the commission said in its RFP. “It is the single strategy with the best chance of bending the GIC’s cost curve for the long haul.”

The $6.5 billion contract will start in fiscal year 2014. The RFP said carriers will be required to guarantee that the commission’s per-member per-year costs will not rise in FY16 compared to FY15 and will start decreasing in each of the remaining years of the contract.