California could save $4.4B in care costs annually by reducing variation

Billions of dollars could be saved annually if healthcare cost variation was reduced across California, according to findings from the new online California Regional Health Care Cost & Quality Atlas.

The atlas, developed by the nonprofit Integrated Healthcare Association, in partnership with the California Health Care Foundation and California Health and Human Services Agency, includes information about care provided in 2013 to nearly two-thirds of the state’s total population, or 24 million people. Spanning commercial insurance, Medicare Advantage and fee-for-service, and Medi-Cal managed care and fee-for-service, the atlas tracks six clinical measures for cancer, diabetes, and asthma; three hospital utilization measures; and average annual total cost of care per enrollee, according to a news release.

The Atlas data show that nearly 200,000 more people would have been screened for colorectal cancer and 50,000 more women would have been screened for breast cancer in 2013 if care for all commercially insured Californians represented by the atlas were provided at the same quality as top-performing regions, according to a news release.

The data also show that overall cost of care would decrease by an estimated $4.4 billion annually, or about 10 percent of the $44 billion total cost of care for the commercially insured people represented in the atlas in 2013, if care for all commercially insured Californians represented by the atlas were provided at the same cost as observed in San Diego—a relatively high-quality, low-cost region.

IHA is scheduled to give a briefing Wednesday to demonstrate the online atlas and highlight findings published in an issue brief —Benchmarking California Health Care Quality and Cost Performance —that analyzes atlas data for 14.5 million of the 19.4 million commercially insured Californians enrolled in health maintenance organization and preferred provider organization products. Among other things, the issue brief found dramatic geographic variation in cost of care. For instance, the average annual per-enrollee total cost of care was $1,800 higher in San Francisco County compared to Kern County.


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