A study of six large and diverse California regional markets produced reports outlining details about the local health care systems, and identifying common themes and emerging issues that influence how Californians receive their health care. The regions studied were Fresno, Los Angeles, Riverside/San Bernardino, Sacramento, San Diego, and the San Francisco Bay Area. This presentation explored the findings of the study, highlighting issues raised about the safety net, provider organizations, health plans, and payers.

The speaker was Paul Ginsburg, PhD, president, Center for Studying Health System Change.

Highlights of the presentation were:

• Dr. Ginsburg described characteristics of California that stood out when compared to other parts of the country, such as the role of HMOs; the high percentage of the uninsured; a high unemployment rate; a higher-than-average percentage of people who say they are in fair to poor health; and Medi-Cal managed care delivered by counties.
• It was noted that Fresno's health care market was more like other parts of the country, particularly in its low HMO penetration. Dr. Ginsburg attributed this to the late arrival of Kaiser.
• Counties were grouped into those with large roles in the health system (i.e., those that own and operate hospitals, clinics, and Medi-Cal managed care plans) and those with small roles (i.e., those that contract with UC and private hospitals, community health centers, and private health plans). Key factors in the role the county plays were identified as state and local funding levels, desired level of financial control, and the political environment and existence of champions.
• In terms of private sector trends, Ginsburg indicated that there were growing differences between "must-have" hospitals and others. Must-have hospitals are those that employers and payers judge to be essential in an HMO network.
• Low Medi-Cal rates magnify importance of payer mix. All providers were found to be experiencing economic pressures, and hospitals were focusing on tighter alignment with physicians.
• The study indicated Fresno, Los Angeles, and Riverside/San Diego were more fragmented markets, and Sacramento, San Diego, and the San Francisco Bay Area were less fragmented.
• Dr. Ginsburg noted that seismic safety requirements were contributing to capacity constraints because hospitals were retrofitting and replacing instead of expanding. Dr. Ginsburg predicted growing provider leverage because of capacity constraints, provider consolidations, consumer preference for broad choice, and Department of Managed Health Care regulations.
• Trends in private health insurance indicated a shift to national management strategies with the mergers and acquisitions of PacifiCare/UnitedHealth and Blue Cross of California/Anthem. Kaiser remained popular, and HMOs were still strong in California, but there was a gradual shift to PPOs.
• Dr. Ginsburg discussed the erosion of the delegated model due to enrollment shifts from HMOs to PPOs, health plan management shifts outside California, and diminished enthusiasm by some physicians — potentially reflecting changes in provider leverage.

The presentation slides are available under Document Downloads. The six market studies are available under Related CHCF Pages.