Big customers may drop managed care coverage

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Tuesday, Dec. 14, 1999 | 10:48 a.m.

THE ASSOCIATED PRESS

LOS ANGELES -- Two of California's largest pension funds are considering dropping the managed health care coverage for their members and contracting directly with doctors and hospitals, the Los Angeles Times reported today.

The organizations considering the action, the California State Teachers Retirement System and the California Public Employees' Retirement System, together represent about 1.5 million people.

Supporters of such a move say it would likely give employers better control of premium costs and make it easier for them to monitor services.

Success would in part require a solid network of doctors and hospitals willing to take part in the contracting plan.

"We have to look at how we can shift the marketplace. And with direct contracting, we can provide services in a more economical fashion," said state Treasurer Phil Angelides, a board member at both pension funds who chairs the health benefits committee of CalPERS.