Riverside/San Bernardino: Vast Region, Market Fragmentation Add to Access Woes
With no dominant health system operating across this vast region, hospitals and physicians in the Riverside/San Bernardino market remain relatively fragmented. There are distinct submarkets serving diverse populations. The economic downturn hit the area particularly hard, with many people losing employer-sponsored coverage. These two factors led to reported barriers to care for both lower-income people and those living in remote areas.
The region has experienced a number of other changes and challenges since the last study was conducted in 2008. Key developments include:
- Improved overall hospital financial performance. Many hospitals maintain bargaining clout on payment rates because health plans must ensure access in each of the region’s many submarkets, some of which are underserved. This has helped maintain and even improve financial performance at the same time that hospitals have struggled with a declining payer mix as people lost private health coverage. Other factors protecting hospitals’ bottom lines include efforts to improve efficiency and contain costs, and more recently, funds from a new state hospital fee program.
- Increased presence of Kaiser. Kaiser Permanente’s presence has expanded, with other providers — both hospitals and physicians — viewing the integrated delivery system as their biggest competitive threat.
- Growing concerns about physician supply. The Riverside/San Bernardino physician market faces particular challenges given its sprawling geography and weak economy. The per capita physician supply in the region is low compared with other California markets, and some observers reported that demand for physicians continues to outpace supply.
- Growing efforts by hospitals to align with physicians. Physicians remain largely independent in solo or small practices, although some are joining larger physician-owned organizations. Hospitals are seeking to align more closely with physicians — both to gain patient referrals and inpatient admissions and to prepare for new payment arrangements under national health reform. At the same time, as more people get coverage under health reform, physician shortages are expected to intensify.
- Increased pressures on safety nets. County-run safety-net organizations face capacity and financial pressures to care for the growing numbers of Medi-Cal and uninsured patients. Both Riverside and San Bernardino Counties are trying to work more with federally qualified health centers (FQHCs) and other private community clinics and health centers, especially as they prepare for reform.
- Slow development of FQHCs. Market observers note that health centers in this region have been slower to receive federal status and grants than health centers in many other parts of California. State data indicate that the region has fewer than half the FQHCs per capita than the state average, even with the area’s population more likely to be low income and uninsured or covered by Medi-Cal.
- Transitioning low-income people to coverage. Given limited funding in Riverside and San Bernardino Counties, both expect to enroll about 20,000 people in the county’s Low Income Health Program under the state’s Medicaid waiver. This represents a fraction of those potentially eligible.
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.