Los Angeles: Thriving or Surviving in a Fragmented Market
Los Angeles is a large, densely populated, racially and ethnically diverse county with considerable income variation among its 10 million residents. These characteristics have contributed to a fragmented health care market, with many hospital systems, physician organizations, and community clinic organizations that tend to serve distinct areas, rather than a few provider organizations serving the whole market.
Key developments in the region include:
- “Super group” physician organizations, such as HealthCare Partners and Heritage Physician Network, are on the rise. These large organizations dominate the physician market by offering physicians the option to remain independent through IPA models or to join a medical group. Kaiser Permanente continues to attract physicians due to its stability, while prominent hospitals Cedars-Sinai and UCLA are expanding their range of services and geographic reach through ramped-up physician acquisition.
- Gaps between “have” and “have-not” hospitals increase. While leading systems continue to fare well given their relatively large base of affluent, commercially insured patients and strong reputations, many community hospitals struggle.
- The market remains over-bedded. Los Angeles County stands out among other regions of the state for its large supply of hospital beds relative to the size of the population, even despite hospital closures over the last few years. The county has approximately 12% more beds than average for its population size.
- In the wake of the Affordable Care Act (ACA) coverage expansion, the uninsured rate dropped for people of all ages from 17% in 2011 to 13% in 2014, providing increased financial support to traditional safety-net providers.
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.