Los Angeles: Thriving or Surviving in a Fragmented Market

Mathematica Policy Research


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.

The complete 2016 issue brief, as well as previous years’ editions, is available below.

CHCF has updated a series of issue briefs that examine the health care markets in seven regions of California: Fresno, Los Angeles, Orange County, Riverside/San Bernardino, Sacramento, San Diego, and the San Francisco Bay Area. These issue briefs highlight the state’s changing health care systems following implementation of the Affordable Care Act. They are published as part of the CHCF California Health Care Almanac, an online clearinghouse for key data and analysis examining California’s health care system.