CalSTRS: Board Votes to Consider Direct Provider Contracting
The California State Teachers' Retirement System board unanimously voted yesterday to develop a health coverage plan that would allow the pension fund to contract directly with providers, rather than going through a traditional health plan, perhaps paving the way for a health care revolution in the state, the Los Angeles Times reports. The vote was part of a more expansive motion by the board to formally investigate options for providing health care coverage to its 500,000 members, many of whom are not eligible for Medicare due to a loophole in Social Security laws. Under the proposed plan, the organization would bypass health plans and pay physicians and hospitals directly for health care services. CalSTRS also will look into the possibility of allowing teachers to participate in health care benefit plans offered by the California Public Employees' Retirement System. CalSTRS CEO James Mosman cautioned that the direct contracting plan was not a "done deal." He said, "The board has agreed to go ahead and let us take the next step, which is to study the concept in more detail." Some applauded the decision, but cautioned that setting up such a system would prove costly. While the step "moves absolutely in the right direction," Nancy Oswald, executive director of the National Independent Practice Association Coalition, warned that "physician organizations ... are not set up to take a tremendous amount of financial risk. What they are set up to do is provide care." The direct contracting model will be presented at the CalSTRS board meeting in March (Bernstein, 1/7).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.