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Issues and Trends from a Six-Region Study of California Health Systems

The Center for Studying Health System Change

Researchers visited California communities to gain insights into regional characteristics in health care affordability, access, and quality. These issue briefs profile each market and identify common themes and emerging issues.

December 2009

Researchers from the Center for Studying Health System Change (HSC) conducted site visits in the fall of 2008 to six large California communities to study local health care systems and to gain insights into regional characteristics in health care affordability, access, and quality. The six markets — Fresno, Los Angeles, Oakland/San Francisco, Riverside/San Bernardino, Sacramento, and San Diego — reflect a range of economic, demographic, health care delivery, and financing conditions. Approximately 300 interviews were conducted with representatives of hospitals, physician organizations, health plans, major employers, benefit consultants, insurance brokers, community health centers, state and local policymakers, and other stakeholder organizations.

In July 2009, CHCF published six issue briefs that provided a detailed picture of each health care system and identified common themes and emerging issues that influence how Californians receive their health care.

As a follow-up to these regional reports, CHCF has produced a series of four issue briefs that examine specific health system issues that were illuminated by this six-market study. The issue briefs, published as part of CHCF's California Health Care Almanac, include:

Shifting Ground: Erosion of the Delegated Model in California. California's delegated model may have significantly contributed to the relative success in containing health care costs. However, the delegated model is threatened by three emerging market developments: an enrollment shift from HMOs to PPOs, the move of two large California insurers to out-of-state management, and a sharp increase in provider leverage over health plans, making fee-for-service payment more attractive to physician groups. Erosion of the delegated model may have important implications for the state's health care spending trends, and for federal efforts to develop new provider payment mechanisms that include capitation.

California's Safety Net: The Role of Counties in Overseeing Care. California counties are responsible for assuring safety-net health care services for their lowest-income residents. But how these services are financed and delivered differs significantly among the counties. This issue brief explores the factors that shape the roles counties assume, including state and local funding levels, degree of financial control desired, extent to which a county is urban or rural, the political environment, and the extent to which county facilities serve as major employers.

A Tighter Bond: California Hospitals Seek Stronger Ties with Physicians. Traditionally, California hospitals have relied on the voluntary medical staff model to align with physicians. This model is eroding, however, as services shift to ambulatory care facilities, often physician-owned, and as competition between hospitals and physicians intensifies. This issue brief examines hospital-physician alignment in California and strategies used to work around legal constraints, and discusses implications for policymakers and other stakeholders.

Managed Care in California: Cost Concerns Influence Product Design. HMOs have long had a large role in the California health insurance market. But this role is changing in response to pressure from employers to control their health care spending by raising their employees' share of costs. This issue brief examines the blurring of traditional distinctions among types of health insurance carriers and products. It also discusses the efficacy of the dual regulatory structure for health insurance in California, which was based upon the previously clear dichotomy between HMOs and other health insurance products.

The four complete issue briefs are available under Document Downloads. The six regional markets issue briefs (Fresno, Los Angeles, Oakland/San Francisco, Riverside/San Bernardino, Sacramento, and San Diego) are available under Related CHCF Pages below. In addition, a February 2010 Health Affairs article, "Unchecked Provider Clout in California Foreshadows Challenges to Health Reform," provides further analysis of the site studies and is available under External Links.