Issues and Trends from a Six-Region Study of California Health Systems

Researchers from the Center for Studying Health System Change (HSC) conducted site visits in the fall of 2008 to six large California communities to study local healthcare systems and to gain insights into regional characteristics in healthcare affordability, access, and quality. The six markets — Fresno, Los Angeles, Oakland/San Francisco, Riverside/San Bernardino, Sacramento, and San Diego — reflect a range of economic, demographic, healthcare delivery, and financing conditions. Approximately 300 interviews were conducted with representatives of hospitals, physician organizations, health plans, major employers, benefit consultants, insurance brokers, community health centers, state and local policymakers, and other stakeholder organizations.

In July 2009, the California HealthCare Foundation (CHCF) published six issue briefs that provided a detailed picture of each local healthcare system and identified common themes and emerging issues that influence how Californians receive their healthcare.

As a follow up to these regional reports, CHCF has produced a series of four issue briefs that examine specific health system issues that were illuminated by this six-market study. The issue briefs are:

Shifting Ground: Erosion of the Delegated Model in California
California's delegated model may have significantly contributed to the relative success in containing health care costs. However, the delegated model is threatened by three emerging market developments: an enrollment shift from HMOs to PPOs; the move of two large California insurers to out-of-state management; and a sharp increase in provider leverage over health plans, making fee-for-service payment more attractive to physician groups. Erosion of the delegated model may have important implications for the state's healthcare spending trends, and for federal efforts to develop new provider payment mechanisms that include capitation.

California's Safety Net: The Role of Counties in Overseeing Care
California counties are responsible for assuring safety net healthcare services for their lowest-income residents. But how these services are financed and delivered differs significantly among the counties. This issue brief explores the factors that shape the roles counties assume, including: state and local funding levels; degree of financial control desired; extent to which a county is urban or rural; political environment; and the extent to which county facilities serve as major employers.

A Tighter Bond: California Hospitals Seek Stronger Ties with Physicians
Traditionally, California hospitals have relied on the voluntary medical staff model to align with physicians. This model is eroding, however, as services shift to ambulatory care facilities, often physician-owned, and competition between hospitals and physicians intensifies. This issue brief examines hospital-physician alignment in California and strategies used to work around legal constraints, and discusses implications for policymakers and other stakeholders.

Managed Care in California: Cost Concerns Influence Product Design
HMOs have long had a large role in the California health insurance market. But this role is changing in response to pressures from employers to control their healthcare spending by raising their employees' share of costs. This issue brief examines the blurring of traditional distinctions among types of health insurance carriers and products. It also discusses the efficacy of the dual regulatory structure for health insurance in California, which was based upon the previously clear dichotomy between HMOs and other health insurance products.

San Diego: Retreat from Capitation Raises Cost Concerns
Center for Studying Health System Change (July 2009)

Approximately three million people reside in San Diego County, an area with steady population growth over the past decade. On average, San Diegans enjoy higher income levels and similar rates of health insurance compared with residents of the state overall. However, the economic downturn is taking a toll as the unemployment rate in San Diego County reached 8.6% in January 2009.

To provide more perspective on the unique challenges facing San Diego and other large healthcare markets in California, CHCF asked the Center for Studying Health System Change to produce a regional market study in six areas: Fresno, Los Angeles, Riverside/San Bernardino, Sacramento, San Diego, and San Francisco Bay Area.

Key findings of the San Diego report include:

• The hospital market has well-defined geographic boundaries and is dominated by four large hospital systems: Sharp HealthCare, Scripps Health, Kaiser Permanente, and the University of California San Diego Medical Center;
• The physician market is dominated by large multi-specialty groups, with a number of single-specialty groups also present;
• Kaiser, UnitedHealthcare, and Anthem Blue Cross are the leading health plans in terms of enrollment; and
• The safety net is fragmented, and the county government is widely perceived as having a weak commitment to health care for low-income and uninsured residents.

The complete issue brief and an executive summary are available under Document Downloads below.

Read a blog article, "San Diego Region: Is Health Reform the Answer for the Taxed Safety Net?" by Kamal Muilenburg and join the discussion about the challenges of providing care in the San Diego area.

Document Downloads

• San Diego: Retreat from Capitation Raises Cost Concerns, Issue Brief (637K)
• San Diego: Retreat from Capitation Raises Cost Concerns, Executive Summary (576K)

Related CHCF Pages

• Demographic and Health System Characteristics: Six Selected Regions vs. California