California’s Inland Empire region of Riverside and San Bernardino Counties sprawls over 27,000 square miles, and is a study in geographic contrasts — with urban population centers in the west and rural, sparsely populated areas to the east. The region has enjoyed continued population and employment growth, although it continues to be poorer and less healthy than other parts of California.

In recent years, the Affordable Care Act (ACA) continued to play a large role in shaping the Inland Empire’s health care sector, with increased Medi-Cal coverage decreasing the share of uninsured people and spurring growth of Federally Qualified Health Centers (FQHCs). Small group or solo physician practices remain common in the region; however, the landscape is shifting. Throughout the region, provider shortages remain a pressing concern, although new medical schools may increase physician supply.

Summary of Findings

Key factors affecting the local health care market include:

• The numbers of FQHCs and patient visits continue to grow, bolstering the safety net. As new FQHCs opened in the region, the number of FQHC patient visits more than doubled, from just under 500,000 in 2014 to more than 1.2 million in 2018. Nonetheless, the number of visits per capita in the region is still only half the statewide average.
• Many physicians practice independently in solo or small practices. Throughout the region, a large share of care is delivered by these physicians. However, the physician practice landscape is shifting as financial pressures, market conditions, and demographics all combine to make independent practice less attractive. Additionally, many younger physicians increasingly prefer the stability of an employment relationship and are drawn to the region’s larger providers, including Kaiser, FQHCs, and larger medical groups.
• The region’s hospital market remains unconsolidated. San Bernardino and Riverside Counties have among the lowest levels of hospital market concentration in California, although countywide measures can mask the extent of hospital concentration, as some hospitals are dominant in their local submarkets. There have been no mergers or significant changes to hospital market shares over the past several years, although several hospitals have closed pediatric units. Kaiser Permanente, with about a quarter of the region’s covered patients, operates an integrated delivery system with a health plan, hospitals, and its own network of physicians, and continues to be a major player in the market.
• Inland Empire Health Plan (IEHP), the region’s largest Medi-Cal managed care plan, drives pay-for-performance (P4P) initiatives for Medi-Cal providers. IEHP provides coverage to nearly 9 in 10 Medi-Cal enrollees in the region — equivalent to more than a quarter of the region’s total population — and contracts with more than half of the region’s primary care physicians and roughly 40% of specialists. The plan’s dominant role in the Medi-Cal market provides significant leverage to engage hospitals and physicians in incentive programs using data to drive performance improvement.
• Efforts are still being developed to embrace technology and data analytics to improve outcomes and lower costs. Interoperability challenges stemming from the use of multiple electronic health record (EHR) systems, as well as staffing and financial constraints, especially among the region’s many smaller practices, hinder adoption of quality improvement efforts. The relative lack of data sharing among the region’s hospitals and physicians may slow efforts to improve care and increase efficiency.
• Much of the innovation surrounding integration of behavioral and physical health care in the region has occurred in the Medi-Cal program and among safety-net providers. IEHP has supported several behavioral health integration efforts, many FQHCs in the region offer integrated behavioral health care, and both county departments of behavioral health are pursuing integration efforts. Nevertheless, access to behavioral health services remains an important issue in the region.
• The region continues to struggle with recruiting primary care clinicians and specialists. Compared with other California regions, the Inland Empire has fewer primary care and specialty physicians per person, with even greater disparities in the Inland Empire’s eastern areas compared to the more densely populated communities to the west. New medical schools in the region, coupled with incentives to encourage newly minted physicians to practice in the area, may help mitigate this challenge in the future.

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.

About the Authors

Matthew Newman, MPP, is principal and cofounder, and James Paci, MPP, is a policy analyst with Blue Sky Consulting Group, a firm that helps government agencies, nonprofit organizations, foundations, and private-sector clients tackle complex policy issues with nonpartisan analytical tools and methods.