The California Public Employees Retirement System, one of the nation's largest purchasers of healthcare services, is considering direct contracting with providers.
Margaret Stanley, a CalPERS assistant executive officer in charge of health benefits, said last week that her organization may bypass the various health plans it does business with, as part of an initiative to improve quality and cut costs.
However, the system has no immediate plans, Stanley said. "It's something we're moving on very cautiously. There are no dates or anything like that," she said.
Stanley confirmed that CalPERS' attorneys have researched how the system could pursue such arrangements in compliance with state and federal laws. The system would have to contract with providers that have full or limited state HMO licenses.
Stanley's remarks came at a symposium on managed care conducted in San Francisco earlier this month by the Palo Alto Medical Foundation.
CalPERS, which is based in Sacramento, provides healthcare and other benefits to more than 1 million state government employees, retirees and dependents. It has contracts with 10 HMOs and six PPOs. Some 80% of CalPERS' enrollees are in HMOs, and 20% are in PPOs. It spends about $1.5 billion annually on health insurance premiums.