Payment & Delivery System Reform

Lower Costs and Better Health Through Transformation of Care Delivery Systems

Health care costs are growing at an unsustainable pace—at least 2-3 times the rate of inflation. According to the Dartmouth Institute for Health Policy and Clinical Practice, about one third of our health care spending is wasteful. Too much of the health care dollar is spent on care that is ineffective, inefficient, or even unsafe to the point of causing harm to patients. But how much of this can we really control? The first place to look is in the way we organize and pay for care. California is fairly active on this front, and this area (“payment and delivery system reform”) promises to grow in the coming years.

As consumer advocates we need to ensure that efforts to transform health care delivery systems translate to better care and better outcomes for consumers while reducing disparities. Reforms at the national and state level seek to transform care on multiple fronts:

  • Prevention: Changing the delivery system to promote primary and preventative care; offering no cost-sharing (and thus no financial barrier) for preventative care to encourage utilization; encouraging healthy choices outside the health system, like menu labeling.
  • Bulk Purchasing: Using the “purchasing power” of the government or of purchasing pools, group coverage, and a new “active purchaser” exchange, to bargain for better rates and prices for medical products and services.
  • Abolishing Underwriting (where sicker or older individuals or small groups are made to pay higher premiums) and minimizing the administrative expenses and perverse incentives associated with it; getting insurers to compete on the right things, like keeping us healthy, rather than avoiding risk.
  • Information Technology: encouraging adoption and meaningful use of electronic records to reduce bureaucracy and making meaningful use of the data on cost and quality.
  • Better Research from Transparency Efforts on prices and health outcomes; and on comparative effectiveness of key treatments.
  • Patient Safety measures to reduce costly hospital-acquired infections and to minimize preventable re-admissions.
  • Payment Reforms to reward quality & better health outcomes, including better care coordination and disease management;
  • Quality coverage for all: by by reducing the cost-shifting that results from delivery of uncompensated care in emergency rooms, reduces costs and makes the health care system work better for all.  

Some venues where such changes are being discussed include:

  • Delivery System Reforms:  In payment and delivery system reforms currently underway at the state level, Health Access looks for every opportunity to improve health, health care, and equity for all Californians, including the remaining uninsured. These groups and the dual eligibles (low-income seniors and people with disabilities enrolled in both Medicare and Medi-Cal) stand to benefit the most from reforms based on the expanded use of team-based care and care coordination, consideration of best practices, engagement of lower-cost  providers, and prevention and population health strategies.  Click here to learn more about the state’s vision for this work.
  • Medi-Cal Waiver Renewal: Another opportunity for reducing wasteful spending while improving quality of care for low-income Californians served by Medi-Cal is the state’s Medi-Cal waiver, the Bridge to Reform.  This five-year Section 1115 “Research and Demonstration waiver  is up for renewal in February, and stakeholder groups are meeting now.  Learn more here.  Get our issue brief, a discussion draft, here. Also see Health Access’ Medi-Cal page