How 3 states are managing the costs of employee health care.

California, North Carolina, and Ohio rely on a combination of wellness programs and cost containment to rein in cost increases, according to a new issue brief from the Center for State and Local Government Excellence. The brief, titled "Health Insurance for Active and Retired State Employees: California, North Carolina, and, Ohio,' analyzes the cost of providing health insurance and looks at changes the states have adopted to slow cost increases in their health plans.

Starting in 2004, the California Public Employees Retirement System (CalPERS) took measures to contain costs and improve health outcomes. These included promoting transparency of hospitals' performance and managing hospital costs; eliminating high-cost hospitals from their network; adjusting premiums for regional markets; encouraging plan members to use generic drugs; adding lower-cost health plans; and adopting a series of wellness programs. The California WorksWell Health Promotion Program also promotes wellness among state employees by providing reduced membership rates at more than 2,200 health clubs throughout the state; discounts for weight loss programs; and online resources for disease prevention and creating a healthy lifestyle.

The State Health Plan of North Carolina (SHP), which offered a traditional fee-for-service or indemnity plan, now provides a choice of several kinds of HMO and PPO managed care plans. In addition, recent legislation authorizes the SHP to impose employee premiums for the first time and moves the administration of the SHP from a General Assembly committee to the Office of the State Treasurer. In an effort to slow the SHP's cost increases, the...

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