“Hot Spots” Face Scrutiny in Next Cost & Quality Atlas

Detailed performance measures of the California health care system are fragmented and scattered across payers, hospitals, physicians, and other providers. Last July, the Integrated Healthcare Association (IHA) created the California Regional Health Care Cost & Quality Atlas, an online tool that provides side-by-side comparisons of clinical quality, hospital utilization, and total cost of care by payer type for 19 California regions. The atlas, which spans commercial insurance, Medicare Advantage and fee-for-service (FFS), and Medi-Cal managed care and FFS, set an important benchmark to measure California’s progress toward achieving high-quality, affordable care. The atlas reveals significant geographic variation in both cost and quality. For example, in Southern California, commercial enrollees receive relatively high-quality care at a lower cost, while those in Northern California receive higher-quality care but at a much higher cost.

While we at IHA are proud of the information provided by this tool, almost as soon as it was unveiled, health care stakeholders said they needed deeper, more granular performance measurements to better understand the wide geographic variation in costs and quality and to help identify “hot spots” for targeted improvement efforts.

Next Atlas to Add 6 Million Californians

Working with our health plan and state government partners, the next edition of the atlas will include information on about 6 million more people, bringing the total to 30 million Californians, or three-quarters of the state’s population. The updated atlas also will offer more detailed commercial insurance information, moving beyond health maintenance organization (HMO) and preferred provider organization (PPO) categories to include comparative performance information by insurance market segment: large group, small group, individual, Covered California, and self-insured groups.

As our country continues to grapple with the challenge of providing affordable, quality health care to all Americans, performance data by market segment can help answer critical questions, including these: How does the quality and cost of care through Covered California, the state’s health insurance exchange, compare with care provided through other market segments? Are Covered California plans more affordable, and if so, why?

In California’s commercial market, there has been a steady shift of enrollment from HMO to PPO products, despite evidence that HMOs provide superior quality. At the same time, accountable care organizations (ACOs) have become more prevalent, mostly using PPO products. ACOs are designed to incorporate some of the care integration and coordination generally found in HMO products. The atlas data show that the quality of care in HMOs is on average 48% higher than in PPOs, while average total cost per HMO member is 5% lower. Will PPO ACOs help close this performance gap? The atlas will let us look at this over time.

Adding More Measures

The second edition of the atlas, due out before the end of the year, will include information about enrollees’ clinical conditions — diabetes, asthma, low back pain, and childbirth — as well as their level of cost-sharing or out-of-pocket costs. Instead of providing just the overall total cost of care, the atlas will examine cost by service categories: inpatient and outpatient facilities, pharmacy, and physician professional services. In fact, the revised edition of the atlas will more than double the number of performance measures available, as shown in the table below. We’ve added new clinical quality measures; overuse measures; procedure rates for utilization of common cardiac, orthopedic, and surgical procedures; and separate reporting for maternity, surgery and medical inpatient stays, bed days, and average length of stay.

Comparing Cost & Quality Atlas 1 and 2

With new performance measures and more granular cost information, our goal is to create more actionable information. For example, health care stakeholders will be able to understand which service categories are driving their total cost of care, allowing them to focus regional improvement efforts. Within service categories, they will have additional regional and statewide information on utilization and clinical quality to describe outlier performance.

Reducing performance variation across the state could not only improve care for hundreds of thousands of people, it can save billions of dollars annually. You can read more about this in the IHA issue brief Benchmarking California Health Care Quality and Cost Performance (PDF).

Our plan is to routinely update the Cost & Quality Atlas, with each edition diving deeper. The goal is a simple one: to help everyone involved in California’s health care delivery system understand where they stand and how they can improve.