in 2011, the health service system looked at what calpers was doing. is the second-largest provider in the country and they successfully implemented and accountable care organization in sacramento. that is a collaboration between hospital systems and physician groups where they try to work together to bring costs down. it is counterintuitive for the hospitals are paid fee-for- service. hospitals are grappling across the country with how they going to have a revenue stream if they're keeping people out of a hospital? they try to eliminate duplication and better coordinate care. our goal in creating to organizations was to create competition between the two. if you look at this slide, you can see blue shield and accountable care organization one and accountable care organization no. 2. in terms of how we negotiate rates, and this was true for 2013, it negotiates a single rate for both. if you are in the group, you play u.k. pay the same premium. their rate is negotiated with physician groups and they negotiate their rates with the hospitals. since it is

the accountable care organization had a head start because they were working with calpers and they hit the ground running and they have seen remarkable improvements in their emergency department rates and generic drug utilization rates. commends have been made in their working toward bringing those same metrics down. they are not quite as significant, but the really important takeaway number is when you look at the trend line, and had been 16%. we were going to see continued trend that 16% and we have lowered them to 9%. that's largely due to accountable care organizations. how's that translated to our rates was the first year, 2011, blue shield and groups and hospitals of france said we are counting on you being a successful and we will give you a $15 million rate increase production. that was the rate commitment from physicians and their collaborating hospitals. this year, our trend was down to 9%, but because we had subsidize premiums last year, our rates were going up dramatically. we will be writing checks to hospitals and physician groups and we also paid down the premiums and we

supervisor farrell: we had some talk of this about how -- what it means for retirement, calpers, health care -- >> we were given quite a task by the governor lays let -- late last year when the courts decided the agencies would be abolished and the work would be integrated into the city workforce. we have been required to absorb a certain number of employees and figure out how to mesh the classification position rubric of the redevelopment agency and to our rather byzantine civil service rules. we have in doing our best to create a crosswalk between those classis. there are a number of benefits that do not line up. the retirement system, the retiree health care is contrary to the rules most of us live with. we have done our best to integrate them and some of the benefits the employees received above and beyond what employees have been addressed by this very amendment and the unions have agreed to drop the employer pick up of the retirement contributions so they will be harmonized where almost every employee and this round -- there were only one or two that are not paid the full rate. >>

calpers did an analysis some years ago of claims data provided by blue shield. the prices were 80% higher on average than hospitals across northern california. about 10 years ago, when sutter health saw to acquire summit medical center, a judge allowed the acquisition to go through. several years ago, the federal trade commission conducted an analysis of that acquisition to determine whether it had anticompetitive a facts. they got claim status from five insurance companies and found that sutter health had boosted prices by as much as 72%. our own organization did analysis of adjusted claims data and found that in the central valley, sutter's hospitals charge prices for simple pneumonia that work 106% higher than its competitors. in the attorney general's antitrust lawsuits, document emerged discovery process to provide insight into the business strategies. i would caution the board that this is a very aggressive organization. they will use their market power to boost prices on consumers. >> i am working -- supervisor mar: please pull the microphone closer to yo

calpers, the local 1245, and what we have found is that 40% is about right. that is to say, within a large population, the range of error or inappropriate care is going to probably account for about 40% of cost. that presents a special opportunity as well as a problem for all of us. it means that regardless of knowing that, without knowing exactly where these cost occur, where this waste exist, it is impossible to focus the health plans or the providers on remedies. our history boils down to this strategy. we have recommended that we begin the development of a voluntary, multiple-pear data set capable of recording in great detail the actual financial transactions, the claims and other transactions that are the structure of

calpers has data because they are a public entity, it shows their prices are higher than other hospitals. but there is a real this advantage, as long as prices go up, hospitals come in and out shout a price below them. you can still be competitive as long as you are just a little bit below them until you don't exist. >> is that helpful? in closing, how would we and force this cap? cpmc agreed to having an independent actuary validate if we had the same people and same claims year over year, they would look at the numbers and the cost and they would not increase their cost over 5% for the first three years. if they violate that provision, they are required to refund that amount to the city of any amount that was impermissibly charged. questions? supervisor chiu: i have a number of questions. from your perspective, do you think what is proposed in this agreement meets the city's objective is to keep costs down? >> i think it is a modest beginning. i think having a cat at a time when there is so much unpredictability is really valuable. having the cap at 5% is a beginning. the challenge for

. >> we have doug hill joining us from calpers. >> good morning. no rain this morning. that was a crazy slow moving downpour last evening. today, any storm chance will be well west of the metro. west of the mountains. it is a beautiful morning. a few high clouds. lots of sunshine. temperatures will warm up your humidity levels will creep up. satellite and radar shows heavy rain well to the south and southeast of the mid-atlantic coast line. we will have sunshine and periods of cloudiness. a few 70's closer to the metro area. they temperatures are pretty warm. 80 degrees or warmer for water temperatures. 66 in manassas right now. 69 in hagerstown. 74 in the capitol. we will go to the 80's today. we will check the seven-day coming up. back to you. >> thank you. coming up, some boys cooling off thought they saw a doll. >> turns out it was a toddler swept away by the current. ♪ our machines help identify early stages of cancer and it's something that we're extremely proud of. you see someone who is saved because of this technology you know that the things that you do in you

calpers on the 7,000 child psychiatrist and the countries of people outside of areas like new york or washington it's pretty hard to get access to a child psychiatrist. a guest with enormous pressure on pediatricians to have a very short visit where they don't have the time really to accurately diagnose the child or to follow up with the medication. but, if parents can do a little looking into reading around for pediatricians who maybe doesn't have it packed schedule of patients and is willing to consult with the child psychiatrist or consult with a therapist who did the connection between the doctors they are not reimbursed with that unfortunately by the insurance company. certainly they are under pressure, too. we're starting to need to kind of wrap up and i want to ask you we have a nice phrase in the book the legacy of medication. what do you see as the legacy of the medication may be for yourself for some of these kids and young adults that you interviewed and for us as a society. >> guest: i think for both myself and many of the young people we interviewed the legacy is that mad

this fund the far less money than expected the calpers fund got only 1% return on its investment. this covers the pension of more than 1.5 million state employees, school employees and local government workers. state workers will may--state workers may be pressured to contribute more money to their pension. >> reporter: the open waters west of san francisco from the coast of the fair lawn island shows of migrating blue humpback and large fin whales. they come here to feed. this is one of the biggest ports in the world. when the to collide, the boats in the welles, the wheels are often killed. the shipping lanes west of the bay area are shown on this map than black boxes. under the new plan, and lanes would be narrowed and shifted. >> reporter: the idea is to have ships using more areas where the whales are not feeding. >> the wells cannot here at the approach of the vessel. if it all to the shipping lanes that may help the welles ovoid ships and vice versa. >> reporter: the offer to train crew members aboard the ship to spot welles and then change what they see. this still needs t

didn't get well for calpers. they were down 11% on that. if wha can you do at home? >> wi.just a vast depository of land. plum creek timber. very nice. most of these are reits now. when you hear these things, look, there's nothing new under the sun. i always say, you want to go buy timber? why don't you buy a company that knows timber better than anybody in the world? wi. you want to own water? the only guy i've ever seen make money in water is in chinatown. it has been one of the biggest loser investors ever. simply impossible to make money in water. >> what if you want to make money in grains? people are super bullish on corn and wheat. >> agrium, unbelievable quarter. mo somedayic conference call last night. they're talking about the growth thesis. remember, the fertilizer companies, i've never seen them bearish in my whole life. >> jim, thank you. we'll be seeing you, of course, coming up. kate's going to continue to monitor that important hallway conversation for us. she's going to be back with more as well. by the way, a lot more of chairman bernanke's live q and a in

officers will immediately stare paying 2 and a half percent into calpers. pay 5% starting in march but also in march they'll get a 2% pay hike. city council approved the deal last night. the police union had given its okay. pension changes approved by voters in san diego probably won't change even if state law lawmakers approve pension reform. voters have already okayed one other factor is both cities have their own pension system separate from the california public employee's retirement system. >>> it is 7:54. we're going to check in with sal. keeping an eye on traffic out there. slow spots? >> it hasn't been all that bad because even when we have crashes on a day like today once they clear the traffic recovers completely which is nice. 80 westbound, the traffic looks good, so we've had some crashes on a normal day that would really mess things up but right now it's looking good. this is looking at the toll plaza. traffic looks good and it's lighter than usual. let's talk about mountain view, northbound 101 from sunnyvale to mountain view. still a little s

i don't know if you guys saw this yesterday, calpers, 1% was the gain.gs me back to our stock market. when you have a ten year at 149, it's up today in terms of the yield and people are reaching for yield and you have pes that are fairly low. you wonder why there isn't more to the stock market. 7.5% boeg gis. talk about a crisis awaiting us. >> wow. terrible. >> yahoo! will be one to watch. up 1 1/3% and whether or not we'll hear from marissa mayer. did you see the story on delta airlines where they found some sewing needles. >> i didn't know they provided sandwich sandwiches. >> you had to pay for those. >> one more reason they should cut back on the food that they offer. >> fbi's investigating that, by the way. let's get to bob pisani. >> good morning and forget about stocks. the street is completely obsessed with ben bernanke and the idea that mr. bernanke must, must tip his hand to what he's going to do on qe3 and i ask, why? because, bob, he's got to do it at the july 31st meeting because if he waits until the september meeting, that's going to be t