California: Healthcare Reform's Golden State?

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California is generally seen as a state ahead of the times, and it is trying to be a vanguard in the realm of healthcare as well.

The California HealthCare Foundation (pdf) commissioned studies to examine healthcare trends and issues in six of the state's largest markets — Fresno, Los Angeles, Riverside/San Bernardino, Sacramento, San Diego and the San Francisco Bay Area.

Paul Ginsburg, PhD, president of the Center for Studying Health System Change, broke down the studies and explained several hospital and healthcare themes in California that are inevitably tied to the rest of the country.   

1. Aggressive growth from Kaiser Permanente (and other major integrated delivery systems). The Oakland, Calif.-based behemoth, which has long been considered a model healthcare delivery system, continues to gain market share and is offering an attractive practice model for new physicians. Many other hospitals and health systems are using Kaiser's strategy to grow in size, through acquisitions of hospitals and/or physician practices, and to enter the market as both provider and insurer.  

2. Physician alignment is the most focused theme for hospitals. Dr. Ginsburg said in the report that physician alignment — more than any other nuanced trend embedded within healthcare reform — is the most important strategy of California providers. They are continuing to focus on strengthening relationships for referrals and care management due to future payment models, and providers are also placing a bigger emphasis on hospital medical foundations and independent practice associations.

3. The proliferation of new contracting arrangements and benefit designs. California hospitals are among the most active when it comes to accountable care organizations, bundled payments and commercial contracts with public employers. In addition, the state's healthcare system is providing disincentives to use high-cost providers (e.g., Scripps Health in San Diego is excluded from some health plans in favor of Sharp HealthCare), and health insurers are limiting their coverage networks to specific hospitals and health systems in exchange for lower rates.  

4. Demands on safety-nets growing. Californians on Medi-Cal, the state Medicaid program, are rising, and the uninsured population also continues to swell. These challenges for safety-net providers are spurring the focus toward the medical home model and primary care in order to prevent bigger, more expensive health problems down the road.

More Articles on Healthcare Reform:

PPACA Won't Disappear If Romney is Elected: 5 Ways to Prepare

Bridging the Gap: 5 Resources on the Transition to Value-Based Care

AHRQ: Bundled Payments May Lead to Lower Healthcare Costs

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