California is often celebrated for its rich diversity. Geographic, cultural, and population differences are embraced as key ingredients that make our state successful. But when it comes to health care services, differences are neither expected nor valued.

Study after study indicates that where you live has a direct impact on your health and well-being. In fact, as Dr. Tony Iton of The California Endowment has said about determinants of health status, your zip code is probably more important than your genetic code. One look at the results from an Integrated Healthcare Association online tool, the California Regional Health Care Cost & Quality Atlas, confirms wide geographic variation in health care measures across the state — and the tremendous opportunities to improve quality and contain costs.

What drives this variation? More importantly, what can be done to minimize it? While some of the variation in care delivery may reflect differences in patient populations and needs, other differences are unexplained and likely unwarranted.

Benchmarking and tracking performance on key health care quality and cost measures is a critical first step in reducing unwarranted variation.

Dramatic Variations Across the State

As shown in the table below, quality gaps for people enrolled in commercial insurance products are common across the state’s 19 geographic regions, and the atlas data pinpoint significant opportunities to improve care for hundreds of thousands of people.

Among those who live in Imperial, Inyo, or Mono Counties, are commercially insured and have diabetes, three-quarters have blood sugar levels that are poorly controlled. That increases risks of serious complications like heart disease and kidney failure. In contrast, in Alameda County only one-third of diabetics have poorly controlled blood sugar levels.

In the case of cancer screening, if care for all commercially insured Californians represented by the atlas were provided at the same quality as top-performing regions, nearly 200,000 more people would have been screened for colorectal cancer in 2013, and 50,000 more women would have been screened for breast cancer.

Just as health care quality performance varies widely across California, so does cost. The annual average risk-adjusted total cost of care for commercial enrollees ranges from a high of $5,400 per person in San Francisco to a low of $3,600 in Kern County. These cost differences drive dramatic variations in health plan premiums. For those with high-deductible plans, it also means significant differences in patient costs based on where they live.

Combining Cost and Quality Performance

The atlas reveals significant geographic variation in both cost and quality. Is there a relationship between cost and quality? One way to answer this is by consolidating individual clinical quality measures using a composite quality measure that combines performance for cancer, diabetes, and asthma, and comparing it to total cost of care data.

As shown in the chart below, in Southern California (Regions 15-19), commercial enrollees receive relatively high-quality care at a lower cost (top-left quadrant), while those in Northern California (Regions 2-8) receive higher-quality care but at a much higher cost (top-right quadrant). Northern Counties (Region 1) is the only region that does not conform with other Northern California regions, landing in the lower-quality, higher-cost quadrant. In Central California (Regions 9-14), commercial enrollees generally receive lower-quality care with significant cost variation across geographic regions. Clearly, there does not seem to be a relationship between cost and quality.

If care across the state 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 ― the overall cost of care would decrease by an estimated $4.4 billion annually, or about 10% of the $44 billion total cost of care for the commercially enrolled people represented in the atlas in 2013.

Atlas Benchmarking Guides Improvement

The first edition of the atlas sets an important benchmark to measure our progress in achieving the triple aim of better care, better health, and smarter spending. When the next edition of the atlas is released later this year, we’ll have an updated map with new data to help guide our path to higher-value care.

The wide variation in quality, especially for screening measures, is unacceptable. All the people counted in the atlas have insurance. While income, education, and other socioeconomic factors can affect access to care, health plans and providers must take responsibility for improving performance and closing clear quality gaps. The health of thousands of Californians depends on it.

Learn more about the California Regional Health Care Cost & Quality Atlas.

Jeffrey Rideout

Jeffrey Rideout is president and CEO of the Integrated Healthcare Association (IHA), a California leadership group that convenes diverse stakeholders committed to high-value, integrated care that improves quality and affordability for patients. Before joining IHA, he was senior medical advisor for Covered California, supporting clinical quality, network management, and delivery system reform related to the more than one million Californians enrolled through the state health insurance exchange. Jeffrey graduated from Harvard Medical School and completed his residency in internal medicine at the University of California, San Francisco.

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