San Diego has long been a geographically well-defined health care market with high managed care penetration and a consolidated provider sector. In recent years, hospital systems have faced increasing cost pressures as commercial health plans have responded to employer demands for more affordable premiums. Safety-net providers expanded capacity to deal with the large Medi-Cal expansion that began in 2014, but continue to grapple with how to provide adequate care for a new enrollee population that is far sicker, with more complex medical and social service needs, than the providers’ previous patient base.

Key developments include:

• While the hospital market remained largely stable in recent years, most of the smaller hospitals have been losing volume and struggling financially.
• Major systems are pursuing population health strategies and increasingly using provider-sponsored health plans to take full risk for more patients.
• The challenges of independent practice are leading many primary care physicians to choose employment at system-affiliated groups.
• In the two years since Medicaid eligibility was first expanded under the ACA, San Diego’s Medi-Cal managed care enrollment almost doubled to 700,000. Many Medi-Cal enrollees without a regular primary care provider sought care at hospital emergency departments, and access gaps for many kinds of specialty care and behavioral health care were even more severe.
• San Diego County’s commitment to providing health care for residents with low incomes continues to be limited, although the county Health and Human Services Agency has become more active in fostering collaborations between health and other social services.

Since 2009, CHCF has published a series of regional market studies that examine the health care markets in specific regions across California. These studies highlight the range of economic, demographic, and health care delivery and financing conditions in California. They are published as part of the CHCF California Health Care Almanac, an online clearinghouse for key data and analyses examining California’s health care system.