California’s biggest healthcare buyer isn’t happy about its $7-billion annual medical bill climbing almost 10% next year, and the state’s big insurers may be feeling the heat.
The California Public Employees’ Retirement System is preparing to rebid its health insurance business this fall for 1.3 million members, and two of its current plans, Anthem Blue Cross and Blue Shield of California, are likely to face intense competition as the giant pension fund considers its options.
Perhaps the boldest move under consideration for 2014 would be to bypass insurers altogether in some areas of the state and begin contracting for medical services directly with large physician groups.
The Los Angeles Times notes the move could put large medical groups in direct competition with their contracted insurers. A key motivation for the CalPERS strategy is to better manage its risk pool and control costs associated with chronic conditions such as diabetes and congestive heart failure.
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