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Health Benefits

Ann Boynton
Deputy Executive Officer,
Benefit Programs Policy and

Kim Malm
Health Benefits Branch Interim
Assistant Executive Officer
April 12, 2010

Kathy Donneson
Chief of Health Plan

Sandy Santiago
Supervisor of Appeal Unit
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Senior Appeals Analyst
She wouldn't tell me if I can
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after the 30-day due date.

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Deputy Executive Officer,
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Larry Jensen
Assistant Executive Officer of
the pension fund’s
Administrative Services
Branch April 12, 2010

Alan Milligan
CalPERS Interim Chief Actuary
April 12, 2010

Danny Brown
Chief of the Office of
Governmental Affairs April 12,

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Robert Udall Glazier
Deputy Executive Officer,
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(916) 795-3991

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Contact: Bill Madison,
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Vacant, Elected Official of
Local Government

Dated: 12-14-2011
Press Release
September 1, 2010

CalPERS Veteran Promoted to Chief of Health Plan Administration
SACRAMENTO, CA – The California Public Employees’ Retirement System
(CalPERS) announced the appointment of
Kathy Donneson as Chief of the Office
of Health Plan Administration. Donneson is responsible for overseeing contract
management and plan development for CalPERS Health Maintenance Organization
plans, its three self-funded health plans, the three law enforcement association
plans and the CalPERS Long-Term Care Program. She will report to Health Benefits
Branch Interim Assistant Executive Officer
Kim Malm.

Donneson joined CalPERS in July 2002 and has served as the Assistant Chief in
Health Policy and Program Development for more than seven years. She was
instrumental in the development of the health plan rate strategy and actively
participated in the contract development for each of CalPERS health plan partners.
Donneson is also Co-Director of the National Health Care Reform Task
Force, which is responsible for ensuring CalPERS complies with the
provisions of the Patient Protection and Affordable Care Act.
Donneson holds
a Doctorate in Public Administration from the University of Southern California, a
Masters of Public Administration degree from the University of San Francisco, and a
Bachelor of Science (Biological Sciences) from U.C. Davis. She also serves as a
Colonel in the U.S. Air Force Reserves Medical Service Component.

“Kathy was the most qualified candidate, and her prior CalPERS experience will help
us maintain internal program stability and demonstrates our commitment to
succession planning,” said Kim Malm, Interim Assistant Executive Officer of the
Health Benefits Branch.

CalPERS is the largest public employee pension fund in the U.S. with assets of
approximately $206 billion. The retirement system administers retirement and health
benefits for 1.6 million active and retired California State, public school, and local
public agency employees and their families on behalf of more than 3,000 public
employers. More information is available at
Executive Officers
Dated: 01-05-2012
Anne Stausboll
Chief Executive Officer

Ann Boynton
Deputy Executive Officer,
Benefit Programs Policy and

Robert Udall Glazier
Deputy Executive Officer,
External Affairs

Joseph A. Dear
Chief Investment Officer

Russell Fong
Acting Chief Financial Officer

Janine Guillot
Chief Operating Investment

Dale Jablonsky
Assistant Executive Officer,
Information Technology
Services Branch

Donna Lum
Deputy Executive Officer,
Customer Services and Support

Alan W. Milligan
Chief Actuary

Peter H. Mixon
General Counsel

Peter H. Mixon has served as
CalPERS General Counsel
since November 2002. Mr.
Mixon, who joined CalPERS in
1996, previously served as
Deputy General Counsel for
CalPERS since February 2001.

His responsibilities include the
management of the CalPERS
Legal Office, including
supervision of attorneys and
support staff. He provides legal
advice to the CalPERS Board,
Committees, executive and
senior management staff, and
various CalPERS divisions on
tax qualification, statutory
interpretation, and other
pension issues. He also
represents CalPERS in litigation.

Prior to coming to CalPERS, Mr.
Mixon was in private practice for
approximately 10 years, where
he represented a wide variety
of public and private sector
clients in predominately
business litigation matters.

Mr. Mixon received his Bachelor’
s degree from the University of
California at Berkeley and his
law degree from
School of Law, University of
He is a member of the
State Bar of California and is
admitted to practice before the
United States Supreme Court.
Ann Boynton

Deputy Executive Officer,
Benefit Programs Policy and Planning

Ann Boynton became Deputy Executive Officer
of Benefit Programs Policy and Planning in
April of 2011 as part of a reorganization of CalPERS internal reporting structure.
Ms. Boynton provides executive leadership for health policy and planning, health
policy research, health plan contracting and administration, retirement research and
planning, and the CalPERS Center for Innovation. She also oversees CalPERS
Information Technology Services Branch.

Ms. Boynton previously served as Deputy Executive Officer of Benefits
Administration. She came to CalPERS in September of 2010 from the legal and
consulting firm Manatt, Phelps and Phillips where, as a managing director, she
worked with health care and health care information technology issues.

Prior to that Ms. Boynton served as Undersecretary at the California Health and
Human Services Agency.  As one of the agency’s top officials she helped oversee
State and federal health care and social services programs, including Medi-Cal and
health information technology exchange. From February 2005 to February 2006,
Ms. Boynton was Governor Arnold Schwarzenegger’s Chief Deputy Cabinet
Secretary where she was responsible for the development and advancement of
major policy initiatives for the Administrative branch of California State government
and the day-to-day running of State government operations.

Her work experience includes almost twenty years as a management consultant in
the private sector, including employment with IBM and PricewaterhouseCoopers and
owning her own management consulting business.

She holds a bachelor’s degree in English and philosophy from California Lutheran
University and a master’s degree from the University of Notre Dame.    
Anne Stausboll
Chief Executive Officer

Anne Stausboll became Chief Executive Officer (CEO)
of the California Public Employees’ Retirement System
in January 2009. She is the eighth CEO and first woman
to head the Pension Fund. Ms. Stausboll oversees 2,300 employees, a budget of
more than $332 million, and programs spanning investments, health and retirement
benefits administration, actuarial and employer services, supplemental retirement
programs, government affairs, stakeholder relations, and numerous support
functions. She served as the CalPERS Chief Operating Investment Officer from
2004-2008, and during that period served twice as the CalPERS Interim Chief
Investment Officer.

Before coming to CalPERS, Ms. Stausboll was Chief Deputy Treasurer to the
California State Treasurer, beginning in July 2000. Prior to serving in the State
Treasurer’s Office,
Ms. Stausboll worked for six years in the CalPERS Legal
Office, including two years as Deputy General Counsel.

Ms. Stausboll received her Bachelor of Arts degree in English from Oberlin
College and her Juris Doctor degree (Order of the Coif) from the University
of California, Davis School of Law.

Ms. Stausboll serves as the co-chair of the Ceres Board, the nation’s largest
coalition of investors, environmental groups, and nonprofit organizations working
with companies to address sustainability challenges such as global climate change.

She also serves on the Toigo Foundation Advisory Board, an organization with a
goal of increasing diversity in the finance industry.  She was a member of the
working group that drafted the United Nations Principles for Responsible Investment
and served on its Governing Board from 2006 – 2009.

In addition, Ms. Stausboll was named one of the Top 25 Nonbank Women in
Finance, part of “U.S. Banker” magazine’s 25 Most Powerful Women in Banking for
2007, 2008, and 2009.

The State of California is second only to the Federal Government as the largest
purchaser of health insurance in the United States. CalPERS purchases health
insurance for State employees, their dependents, and approximately 1,100 local
government and school district subscribers and dependents.  As such, we purchase
all healthcare services on behalf of over 1.3 million people.
When I started with CalPERS in 2002, my job was to supervise the CalPERS team
and actuarial consultants who negotiate the premium rates with our health plans
year on year. Each year the rate team negotiates with very large health plans to
provide insurance for our members. That current purchasing bill is about $6 billion.
Everybody from elected officials to civil servants and their families then have access
to medical and pharmacy services.
Currently, our health plan providers are
Blue Shield of California and
Kaiser Permanente for health maintenance
coverage (HMO) and Anthem Blue Cross for Preferred Provider
Organization (PPO) coverage.
 Each plan provider enrolls approximately 400,000
subscribers and dependents each.

We can cover people for their whole lives as they dedicate themselves to public service until they
retire. Our basic health plan coverage can start for employees from the age of 18 until they are 64,
at which point they go into the Medicare system which is a federal insurance program.

My job requires me to take all of the information and data that we receive from each
health plan for each rate setting year and translate it into what we expect to pay for
health coverage across future years. Every year we send data requests for quotes
from our health plans, how much they are going to charge us and
we then
negotiate with those health plans on how much we are actually going to pay.

Our rate negotiation process is based on actuarial science. The underwriting and actuarial staff
and consultants debate amongst themselves about the assumptions involved in the rate setting
process, we compare forecasts, and then calculate what we expext the next year's health
insurance bill is going to be. Rate negotiations with our health plans is, in part, about arguing the
future costs with our health plans and coming to agreement with our health plans on what we
expect to be the best estimate of that cost. In June we finalize rate negotiations and the CalPERS
Board of Administration sets our rates for the following year. Of the $6 billion, the State pays about
80% for healthcare coverage for its employees and then the member makes up the last 20%.
Local government employer contributions vary so that those employees contribute different

Our aging work force has an impact on our health plan rate negotiations. This is not unique to
CalPERS or other employers, however. Other western industrial countries are facing the same
financial difficulties as their aging workforce and dependent populations consume more
healthcare services. How CalPERS manages the health needs of our population is key to how we
purchase affordable, quality health care through our health plans, and how those health plan
negotiate with their hospital and doctor providers for high quality, reasonable cost health care
services delivered to our CalPERS members.

When I joined CalPERS we didn't have the data warehouse; we were just starting to build our
healthcare decision support system (HCDSS). Prior to implementing the HCDSS, we could only
manipulate underwriting and actuarial data in the form of flat file Excel spreadsheets and Access
databases. These analyses required extensive manual data manipulation, were time-consuming,
and required extensive scrubbing of health plan data to detect error. With the HCDSS, the
CalPERS rate team had the opportunity to view the health plan data independent of what the
health plans were providing during the annual rate setting process. In short, with the HCDSS
implementation we could analyze our costs the same way as the health plans in order to validate
or refute their assumptions for setting future rates. Prior to implementing the HCDSS, my team of
researchers (who are still the same team now) had the capability and expertise, but not the tools.
Because the health plans had this enormous amount of data, they held the cards in terms of the
negotiations so it was imbalanced.

On January 1, 2004, we went live with our HCDSS and immediately started using the data for the
2005 health plan contract negotiations. Suddenly, we had the same information as the health
plans with whom we were negotiating. Before we had the data warehouse, the plans would come
in with very high rates; in 2003 the proposed health plan rate increases ranged from 29% to over
40% and we didn't really have the computing power to argue or contest the rates they were giving
us. Once we were armed with our data from the HCDSS in 2004, the playing field leveled, and we
engaged that enormous computing power and Decision Analysis knowledge base to go back and
have real negotiations with our health plans. In those first years, it gave us great insight into how
we are spending our money.

The first year we went live with the HCDSS, we avoided $37 million in health plan rate increases
that could be traced to use of the HCDSS. Each year since then, we've tracked how much we've
saved in health plan rate negotiations using the HCDSS. We calculate the costs that were
avoided as a result of using the HCDSS were $19 million in 2006, $25 million in 2007, $32
million in 2008.. In the last six years, CalPERS rate staff, in partnership with our health plans,
have collectively analyzed our data to reduce our health plan rate increases year over year.  Our
2010 health plan premium increases have been the lowest in 14 years and CalPERS saved $600
million dollars from what we received in our initial health plan 2010 quotes to what was achieved
for the final 2010 health plan rates.

The data-driven reporting we do is key to understanding our health program cost drivers,
validating member costs, and building performance-based administrative and clinical measures
for compliance. For example, as a result of the data warehouse, not only do we measure health
plan performance, but we have built performance measures and targets right into the health plan
contracts. These guarantees lock in solid data supply requirements, quality and timeliness of the
data, as well as set health plan performance targets for quality and cost. This was all a direct
result of the reporting made possible by Thomson Reuters Health Care Decision Support System.

When you have a $6 billion program and you can squeeze out even a quarter of a
percent in a health plan rate negotiation, that's a lot of money. Thomson Reuters
data gave us a big hand at the table, so much so that we now tell our health plans
what we the purchaser wants, versus our health plans telling us what they will do
and how much it will cost.

We believe that people get a better standard of care as a result of our efforts.
Because quality measurement capabilities are built into our decision system,
we can actually measure the quality for our members to determine the value
receive for dollars spent. So members are paying less and getting a better
standard of care as a result. Moving forward will involve the new generation
HCDSS to give us greater ability to manipulate data and the ability to do more
comprehensive deep dives into the data

When we began building the data warehouse we were pioneers. We just said 'this is our charge'
and we are going to do it. And we did. We had a sense of what it could do for us, but it actually met
our wildest dreams.

It took a long time, but we are there now. It's the lessons that you'll read about in text books:
introducing the technology, improving the decision-making process and then imbedding change
management around that technology.