Exploring Six California Health Economies

New regional reports highlight variation in health care affordability, access, and quality

California’s sprawling size and the diversity of its regional health care systems result in care that is organized, delivered, and financed differently throughout the state.

As part of its continuing effort to explore this variation, the California HealthCare Foundation (CHCF) today published six regional market reports, providing a first-time, in-depth analysis of six distinct California health care economies. The goal is to better understand the market dynamics for each region studied (the San Francisco Bay Area, Sacramento, Fresno, Los Angeles, Riverside/San Bernardino, and San Diego). Topics include the supply and organization of hospitals, physicians, and other providers; and the accessibility of services for low-income residents — of particular importance during the economic downturn.

“This project provides a detailed picture of each local health care system and identifies common themes and emerging issues that influence how Californians receive health care now and in the future,” said Marian Mulkey, MPH, MPP, CHCF senior program officer.

The reports are the result of a 15-month partnership with the Center for Studying Health System Change (HSC). HSC research teams conducted site visits and interviewed nearly 50 health care leaders in each region, including health plan, hospital, and medical group representatives, major employers, benefit consultants, insurance brokers, community clinic administrators, consumer advocates, and state and local policymakers.

“The contrasts in how local health systems are organized and their responses to challenges, especially caring for uninsured people, are quite striking,” said Debra A. Draper, PhD, an HSC senior fellow who coordinated the project.

Some of the regional findings are highlighted below.

San Francisco Bay Area

  • The health care safety net in the Bay Area is relatively strong but faces growing challenges from the economic downturn. Safety-net providers see increasing demand for services, yet some face eroding funding support.
  • Pressured by low reimbursement and recruitment difficulties, Bay Area physicians are increasingly finding independent practice untenable and are moving into medical groups or affiliating with hospital systems.


  • Sacramento is dominated by powerful hospital systems with significant bargaining leverage over health plans. While they compete vigorously, the degree to which they also cooperate — in areas such as community benefits and research funding — contrasts sharply with many other communities. Most of Sacramento’s physicians practice in large groups that are exclusively aligned with one of the hospital systems.
  • Sacramento’s stable delivery system for insured residents is in stark contrast to its weak and fragmented health care safety net. Sacramento County clinics and private nonprofit clinics are relatively small and financially fragile. Most area clinics have gone without direct federal funding because they lack federally qualified status. There is no designated county hospital.


  • Greater Fresno’s population has grown rapidly in the past decade. Area residents have lower income, education, and health insurance levels, and worse health status than average for California. The economic downturn is intensifying an already bleak situation.
  • Fresno’s physician workforce is aging and there aren’t enough physicians to meet demand. Access to care for the low-income population is hampered by the shortages of health care professionals — nurses and dentists are also in short supply.
  • HMOs have a limited and shrinking market presence. As in many other parts of California, PPO enrollment is growing.

Los Angeles

  • Among the Los Angeles market’s hospitals, the gap is growing between the financially advantaged “haves” and the disadvantaged “have-nots.” The “haves” serve a predominantly affluent and insured population and enjoy leverage with health plans, while the “have-nots” serve largely Medi-Cal and uninsured patients. Some hospitals are operating in the red and their continued viability is uncertain.
  • The Los Angeles health care safety net is well developed and relatively stable. The county operates three acute-care hospitals and many more health centers and clinics. The network of 42 independent community health centers plays a key role in providing care to lower-income residents.

Riverside/San Bernardino

  • The Riverside/San Bernardino region encompasses a vast geographic area, creating significant health care access challenges for residents. Most of the region’s hospitals are concentrated near the major population centers. Hospitals in Riverside and San Bernardino are viewed as competitive, but some collaborate in an effort to keep patients from seeking their care in neighboring Los Angeles, Orange, and San Diego Counties.
  • The region’s health care safety net is anchored by two county hospitals. Both counties maintain their own hospitals, which are major tertiary care centers as well as mainstays for the safety net, but differ in the way outpatient care is provided. In Riverside, the county is the key provider of primary care for low-income residents, but in San Bernardino primary care is mostly delivered by private organizations.

San Diego

  • San Diego’s market is dominated by four large hospital systems. The area’s hospitals are moving to tighten affiliations with physicians — a move that strengthens already significant negotiating leverage with health plans. Historically, capitation — or fixed per-patient, per-month payments — has been the dominant payment method in San Diego, but some hospital systems have pushed to shift from capitation to fee-for-service payment.
  • San Diego’s safety net is fragmented, and the county is widely perceived as having a weak commitment to health care for the low-income and uninsured. San Diego County operates the County Medical Services Program as part of its state-mandated responsibilities to provide indigent care, but restrictive eligibility requirements have held down enrollment.

The regional market reports are published as part of the CHCF California Health Care Almanac, an online clearinghouse for key data and analysis examining California’s medical system. In the fall, the Foundation will release five analyses to identify cross-regional trends in health care delivery and finance and analyze the implications of regional variation.

Contact Information:
Sally Mudd
Director of Engagement

About the California Health Care Foundation

The California Health Care Foundation is dedicated to advancing meaningful, measurable improvements in the way the health care delivery system provides care to the people of California, particularly those with low incomes and those whose needs are not well served by the status quo. We work to ensure that people have access to the care they need, when they need it, at a price they can afford.